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Widely celebrated as a groundbreaking piece of legislation that would curb the global crisis of deforestation.

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

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

Schally cautioned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Green party vice-president a leading green politician went further, labeling the postponements, exceptions and new loopholes – such as one for printed products – as the "systematic weakening" of the law.

This final text stands in stark contrast to the hopes of more than a million EU citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner the European commissioner called it "the most ambitious legislation ever put forward to combat deforestation."

From Ambition to Compromise

The law's unravelling has been interpreted as the EU walking back its green talk. It faced two major postponements, ostensibly over IT issues, which drew condemnation.

"By revisiting the legislation rather than fixing a technical issue, the commission opened Pandora’s box," commented Toussaint.

In its first draft, the regulation mandated that firms to track commodities to their exact plot of land using GPS coordinates, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy 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

However, the rigorous checks triggered a backlash in the EU capital from large companies, producer countries, conservative political groups and EU logging states.

Analysts point to last year's EU elections as a turning point, creating a new political majority less favorable toward 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 demands in trade talks.

Key Loopholes Introduced

In the final legislation features key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new “low risk” category was created.
• A option for more reductions was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it rolled them back," lamented Schally. "Moving obligations 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 complying," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

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

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