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Originally hailed as a groundbreaking regulation that would combat the global crisis of deforestation.

However, the revised version of the European Union's anti-deforestation law, previously heralded as the flagship policy of the Green Deal, has been passed in a significantly diluted state, leading to alarm from its original architect and environmental politicians.

"It has been hollowed out," said the law's original author, citing the exclusion of key obligations for downstream traders to check the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, less information collected, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Environmental MEP Marie Toussaint went further, describing the delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the demands of more than a million EU citizens who supported an initiative in 2020 demanding a ban on deforestation-linked products.

At its launch in 2021, the EU's climate chief Frans Timmermans called it "the most ambitious law proposed to combat forest loss."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its environmental promises. It faced two major postponements, ostensibly over technical problems, which sparked criticism.

"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," commented the Green MEP.

In its first draft, the law mandated that firms to track commodities back to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," the former official said. "These rules were the tool that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in the EU capital from large companies, producer countries, conservative political groups and EU logging states.

Analysts point to last year's European Parliament elections as a decisive moment, creating a new political majority more skeptical of green regulations.

"The other pressure has come from major export markets like the United States," said corporate sustainability professor, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

The passed law includes key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was created.
• A window for further "simplifications" was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Instead of tightening downstream obligations, it rolled them back," lamented the law's author. "By shifting responsibilities to producers, it reduced accountability."

Uncertainty for Companies

The delays and changes have also created annoyance for companies that prepared in advance.

"It is very frustrating because we put a lot of effort into complying," said a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

Official Defense

An EU representative defended the outcome, saying: "The commission has responded to concerns and acted to ensure a pragmatic and balanced implementation."

"The revised regulation provides for predictability, which is key for business and competent authorities to successfully implement this vitally important regulation."