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It was a pioneering regulation that would combat the worldwide crisis of forest loss.

But, the final version of the EU's anti-deforestation law, previously heralded 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 stripped," said the law's original author, citing the exclusion 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 fewer obligated actors, less information collected, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Green party vice-president Marie Toussaint went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This outcome stands in stark contrast to the hopes of over 1.2 million EU citizens who supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner the European commissioner called it "the toughest legislation proposed to combat deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the European Union retreating from its environmental promises. It faced two major postponements, ostensibly over IT issues, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, authorities invited political interference," commented the Green MEP.

In its first draft, the law required companies to track commodities to their exact plot of land using geolocation data, making them liable for deforestation in their supply chains with criminal charges and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

However, the strict due diligence triggered a backlash in Brussels 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 more skeptical of environmental rules.

"The other pressure has come from big trading partners outside the EU," noted corporate sustainability professor, suggesting the commission gave in to some requests during negotiations.

The Weakened Final Text

The passed law includes key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it stripped them back," lamented the law's author. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also caused frustration for businesses that complied early.

"We feel very annoyed because we invested significant resources into preparing," said a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

A commission spokesperson supported the final law, stating: "The commission has responded to concerns and taken action to ensure a simple, fair and cost-efficient application."

"The new text provides for predictability, which is crucial for companies and national regulators to successfully implement this very important law."