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

But, the final version of the European Union's anti-deforestation law, once heralded as the flagship policy of the European Green Deal, has been passed in a significantly diluted state, leading to criticism from its original architect and green lawmakers.

"It has been gutted," said Hugo Schally, pointing to the removal of crucial requirements for downstream traders to verify the provenance 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 MEP Marie Toussaint went further, 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 demands of more than a million European citizens who signed a petition in 2020 demanding a ban on goods linked to forest destruction.

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

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its green talk. It faced two major postponements, reportedly over technical problems, which drew condemnation.

"By revisiting the legislation instead of solving a technical issue, the commission opened Pandora’s box," commented Toussaint.

In its first draft, the law mandated that firms to track commodities to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," Schally said. "These rules were the tool that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

Yet, the rigorous checks triggered a backlash in the EU capital from large companies, producer countries, rightwing parties and EU logging states.

Analysts point to last year's EU elections as a decisive moment, shifting the balance of power less favorable toward green regulations.

"Additional intense pressure came from major export markets like the United States," noted corporate sustainability professor, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

In the final legislation features key dilutions:

• Retailers and traders 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 a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

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

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 complying," said a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

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

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