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It was a landmark regulation that would help stop the worldwide scourge of forest loss.

However, the revised version of the EU's anti-deforestation law, once touted as the crown jewel of the Green Deal, has been passed in a severely weakened state, prompting alarm from its initial author and environmental politicians.

"It has been hollowed out," stated the law's original author, pointing to the exclusion of key obligations for later-stage companies to verify the provenance 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.

Political Dismantling

Green party MEP a leading green politician went further, labeling the delays, loopholes and exemptions – including one for printed products – as the "political dismantling" of the law.

This final text stands in stark contrast to the demands of more than a million EU citizens who supported an initiative in 2020 calling for a ban on goods linked to forest destruction.

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

A Story of Dilution

The law's unravelling is seen by critics as the EU walking back its environmental promises. It faced two major postponements, reportedly over IT issues, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," remarked the Green MEP.

In its first draft, the regulation required companies to track goods back to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and large financial penalties.

"This was not red tape for its own sake," the former official said. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

However, the rigorous checks triggered a backlash in Brussels from large companies, exporting nations, rightwing parties and member states with forestry industries.

Experts cite last year's European Parliament elections as a turning point, creating a new political majority more skeptical of green regulations.

"Additional intense pressure came from major export markets like the United States," noted corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

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

Business Frustration

The delays and changes have also caused frustration for companies that prepared in advance.

"It is very frustrating 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 could be altered again. It’s a major letdown."

The Commission's Stance

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

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