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It was a groundbreaking regulation that would help stop the global scourge of deforestation.

However, the revised version of the EU's anti-deforestation law, previously touted as the crown jewel of the European Green Deal, has emerged in a severely weakened state, prompting criticism from its original architect and green lawmakers.

"The regulation was gutted," said Hugo Schally, citing the exclusion of crucial requirements for later-stage companies to verify the provenance of products 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.

A Watered-Down Law

Green party MEP a leading green politician was more blunt, labeling the delays, loopholes and exemptions – 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 EU citizens who supported an initiative in 2020 calling for a ban on goods linked to forest destruction.

At its launch in 2021, the EU's climate chief the European commissioner called it "the most ambitious law ever put forward to combat deforestation."

From Ambition to Compromise

The regulation's dilution has been interpreted as the European Union retreating from its environmental promises. The proposal encountered two major postponements, reportedly over technical problems, which sparked criticism.

"By revisiting the legislation rather than fixing a technical issue, authorities invited political interference," commented Toussaint.

In its first draft, the law mandated that firms to track commodities back to their specific geographic origin using geolocation data, making them liable 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 prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

However, the strict due diligence 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.

"The other pressure has come from big trading partners outside the EU," said corporate sustainability professor, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

The passed law includes several critical weakenings:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was created.
• A option for more reductions was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it rolled them back," lamented 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.

"It is very frustrating 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 major letdown."

The Commission's Stance

An EU representative supported the final law, stating: "We have listened to concerns and acted to ensure a pragmatic and balanced application."

"The revised regulation provides for predictability, which is crucial for companies and competent authorities to effectively enforce this very important law."