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Widely celebrated as a pioneering law that would combat the worldwide scourge of deforestation.

But, the revised version of the European Union's anti-deforestation law, previously touted as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, leading to alarm from its initial author and environmental politicians.

"It has been stripped," said Hugo Schally, citing the removal of crucial requirements for downstream traders to verify the origin of commodities 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

Environmental MEP Marie Toussaint was more blunt, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "systematic weakening" of the law.

This final text is a far cry from the demands of more than a million EU citizens who supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

When launched in 2021, the EU's climate chief the European commissioner called it "the most ambitious legislation proposed to fight deforestation."

A Story of Dilution

The law's unravelling is seen by critics as the European Union retreating from its green talk. The proposal encountered significant delays, reportedly over IT issues, which sparked criticism.

"By reopening this file rather than fixing a simple IT problem, authorities invited political interference," commented the Green MEP.

In its first draft, the law mandated that firms to track commodities to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," the former official explained. "These rules were the tool that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

However, the strict due diligence triggered a backlash in Brussels from multinational corporations, exporting nations, conservative political groups and member states with forestry industries.

Analysts point to last year's European Parliament elections as a turning point, creating a new political majority less favorable toward environmental rules.

"Additional intense pressure has come from big trading partners like the United States," noted corporate sustainability professor, implying the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law includes key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A window for further "simplifications" was established 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. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also caused frustration for businesses that complied early.

"We feel very annoyed because we put a lot of effort into complying," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

A commission spokesperson defended the outcome, stating: "The commission has responded to concerns and acted to ensure a pragmatic and balanced implementation."

"The new text provides for predictability, which is key for business and national regulators to successfully implement this vitally important law."