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It was a groundbreaking regulation that would curb the global scourge of forest loss.

But, the final version of the European Union's anti-deforestation law, once touted as the flagship policy of the Green Deal, has emerged in a significantly diluted state, prompting alarm from its initial author and environmental politicians.

"The regulation was gutted," said the law's original author, pointing to the removal of key obligations for downstream traders to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, less information collected, and less precise origin data would complicate the task of authorities.

Political Dismantling

Green party vice-president Marie Toussaint was more blunt, labeling the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

This outcome stands in stark contrast to the demands of more than a million EU citizens who supported an initiative in 2020 demanding a prohibition of deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner called it "the most ambitious legislation ever put forward to fight deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its green talk. The proposal encountered significant delays, reportedly over technical problems, which drew condemnation.

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

Originally, the regulation mandated that firms to track commodities to their specific geographic origin 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," Schally said. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

However, the strict due diligence triggered a backlash in Brussels from large companies, producer countries, conservative political groups and EU logging states.

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

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

Key Loopholes Introduced

The passed law includes key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A option for more reductions was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it rolled them back," said Schally. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

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

"We feel very annoyed because we put a lot of effort into complying," said Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a major letdown."

Official Defense

An EU representative supported the final law, saying: "We have listened to concerns and acted to ensure a simple, fair and cost-efficient application."

"The new text provides for predictability, which is crucial for companies and competent authorities to effectively enforce this vitally important regulation."