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Originally hailed as a landmark regulation that would help stop the worldwide scourge of deforestation.

But, the final version of the EU's anti-deforestation law, once heralded as the flagship policy of the European Green Deal, has emerged in a significantly diluted state, leading to alarm from its original architect and green lawmakers.

"The regulation was hollowed out," said the law's original author, pointing to the exclusion of key obligations for downstream traders to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, fewer data points, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Environmental vice-president 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 over 1.2 million EU citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

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

From Ambition to Compromise

The law's unravelling is seen by critics as the European Union retreating from its environmental promises. The proposal encountered significant delays, ostensibly over technical problems, which drew condemnation.

"By revisiting the legislation rather than fixing a simple IT problem, the commission opened Pandora’s box," remarked the Green MEP.

Originally, the law required companies to track goods to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," Schally explained. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

Yet, the strict due diligence provoked opposition in the EU capital from multinational corporations, exporting nations, conservative political groups and member states with forestry industries.

Analysts point to last year's European Parliament elections as a turning point, creating a new political majority less favorable toward environmental rules.

"The other pressure came from major export markets like the United States," noted corporate sustainability professor, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was created.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it stripped them back," lamented Schally. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"We feel very annoyed because we put a lot of effort into complying," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

Official Defense

An EU representative supported the final law, saying: "The commission has responded to feedback and acted to ensure a pragmatic and balanced application."

"The new text ensures stability, which is key for business and national regulators to effectively enforce this vitally important law."