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Originally hailed as a landmark regulation that would combat the worldwide scourge of deforestation.

But, the final version of the EU's anti-deforestation law, previously heralded as the crown jewel of the European Green Deal, has emerged in a significantly diluted state, prompting alarm from its initial author and green lawmakers.

"It has been hollowed out," said the law's original author, citing the removal of key obligations for later-stage companies to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

Political Dismantling

Environmental MEP a leading green politician was more blunt, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "systematic weakening" of the law.

This outcome is a far cry from the demands of over 1.2 million European citizens who signed a petition in 2020 demanding a ban on deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious law proposed to fight forest loss."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its green talk. The proposal encountered two major postponements, ostensibly over technical problems, which sparked criticism.

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

Originally, the law mandated that firms to track goods to their specific geographic origin using GPS coordinates, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

"This was not red tape for its own sake," Schally said. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

Yet, the rigorous checks triggered a backlash in Brussels from large companies, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power more skeptical of environmental rules.

"Additional intense pressure has come from major export markets outside the EU," noted expert Andreas Rasche, implying the commission gave in to some demands in trade talks.

The Weakened Final Text

The passed law features several critical weakenings:

• 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 a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it rolled them back," lamented the law's author. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

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," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

An EU representative supported the final law, stating: "We have listened 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 effectively enforce this very important law."