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Widely celebrated as a landmark piece of legislation that would curb the worldwide scourge of deforestation.

But, the final version of the EU's anti-deforestation law, once touted as the flagship policy of the Green Deal, has been passed in a significantly diluted state, leading to alarm from its initial author and environmental politicians.

"The regulation was hollowed out," stated Hugo Schally, pointing to the removal of key obligations for downstream traders to check the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, less information collected, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

Green party vice-president a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

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

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

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its green talk. The proposal encountered two major postponements, ostensibly over technical problems, which sparked criticism.

"By reopening this file rather than fixing a technical issue, authorities invited political interference," remarked Toussaint.

Originally, the regulation required companies to trace commodities to their specific geographic origin using GPS coordinates, holding them accountable for deforestation in their supply chains with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official said. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks provoked opposition in the EU capital 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, creating a new political majority less favorable toward green regulations.

"The other pressure came from major export markets outside the EU," noted corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new “low risk” category was created.
• A option for more reductions was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it stripped them back," said Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also caused frustration for businesses that complied early.

"We feel very annoyed because we invested significant resources into preparing," 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 supported the final law, saying: "The commission has responded to feedback and taken action to ensure a pragmatic and balanced application."

"The new text ensures stability, which is key for business and national regulators to successfully implement this very important law."