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Widely celebrated as a groundbreaking law that would help stop the worldwide crisis of deforestation.

However, the revised version of the EU's anti-deforestation law, once touted as the flagship policy of the Green Deal, has been passed in a significantly diluted state, leading to criticism from its original architect and environmental politicians.

"It has been hollowed out," said Hugo Schally, pointing to the removal of key obligations for later-stage companies to verify the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, fewer data points, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

Environmental MEP Marie Toussaint went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This final text stands in stark contrast to the hopes of more than a million European citizens who supported an initiative in 2020 calling for a ban on deforestation-linked products.

At its launch in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious legislation ever put forward to combat deforestation."

From Ambition to Compromise

The regulation's dilution has been interpreted as the European Union retreating from its green talk. It faced two major postponements, reportedly over technical problems, which drew condemnation.

"By reopening this file instead of solving a technical issue, authorities invited political interference," remarked Toussaint.

Originally, the regulation mandated that firms to trace commodities back to their specific geographic origin using GPS coordinates, holding them accountable for deforestation in their supply chains with penalties and hefty fines.

"This was not red tape for its own sake," Schally said. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in Brussels from multinational corporations, exporting nations, rightwing parties and EU logging states.

Analysts point to last year's EU elections as a turning point, shifting the balance of power less favorable toward green regulations.

"The other pressure came from big trading partners like the United States," said corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it stripped them back," said the law's author. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"It is very frustrating because we invested significant resources into preparing," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a major letdown."

Official Defense

A commission spokesperson defended the outcome, saying: "We have listened to concerns and acted to ensure a pragmatic and balanced application."

"The revised regulation provides for predictability, which is key for business and national regulators to effectively enforce this very important regulation."