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

But, the revised version of the European Union's anti-deforestation law, once touted as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, prompting criticism from its original architect and green lawmakers.

"It has been gutted," stated Hugo Schally, citing the exclusion of crucial requirements for later-stage companies to verify the provenance of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, fewer data points, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Green party MEP Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This final text is a far cry from the hopes of over 1.2 million EU citizens who signed a petition in 2020 demanding a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief the European commissioner called it "the most ambitious law proposed to combat deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the European Union retreating from its environmental promises. The proposal encountered significant delays, ostensibly over IT issues, which sparked criticism.

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

In its first draft, the law required companies to track goods to their specific geographic origin using geolocation data, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

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

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from large companies, exporting nations, 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.

"Additional intense pressure has come from big trading partners outside the EU," noted expert Andreas Rasche, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

The passed law features 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 – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it rolled them back," lamented Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also created annoyance for businesses that complied early.

"We feel very annoyed because we put a lot of effort into preparing," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

An EU representative defended the outcome, stating: "The commission has responded to concerns and taken action to ensure a pragmatic and balanced application."

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