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Widely celebrated as a groundbreaking law that would combat the worldwide scourge of forest loss.

But, the final version of the European Union's anti-deforestation law, once heralded as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, leading to alarm from its initial author and environmental politicians.

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

He warned that a reduced number of responsible companies, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party vice-president Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – such as one for printed products – as the "systematic weakening" of the law.

This final text stands in stark contrast to the hopes of over 1.2 million European citizens who signed a petition in 2020 calling for a ban on deforestation-linked products.

When launched in 2021, the EU's climate chief the European commissioner called it "the toughest law ever put forward to combat forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its environmental promises. It faced two major postponements, ostensibly over IT issues, which drew condemnation.

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

In its first draft, the law required companies to trace commodities back to their exact plot of land using geolocation data, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, established traceability, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in Brussels from large companies, producer countries, rightwing parties and EU logging states.

Analysts point to last year's European Parliament elections as a decisive moment, creating a new political majority less favorable toward green regulations.

"The other pressure has come from major export markets outside the EU," noted corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it stripped them back," lamented Schally. "Moving obligations to producers, it reduced accountability."

Business Frustration

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

"We feel very annoyed because we put a lot of effort into complying," stated a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

A commission spokesperson defended the outcome, stating: "We have listened to concerns and taken action to ensure a simple, fair and cost-efficient application."

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