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It was a landmark piece of legislation that would curb the worldwide crisis of forest loss.

However, the revised version of the European Union's anti-deforestation law, previously heralded as the crown jewel of the Green Deal, has been passed in a significantly diluted state, leading to alarm from its original architect and green lawmakers.

"It has been stripped," stated Hugo Schally, pointing to the exclusion of key obligations for downstream traders to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that fewer obligated actors, less information collected, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Green party vice-president Marie Toussaint was more blunt, describing the delays, loopholes and exemptions – including one for paper goods – as the "political dismantling" of the law.

This final text is a far cry from the demands of more than a million EU citizens who signed a petition in 2020 demanding a prohibition of deforestation-linked products.

When launched in 2021, then-Green Deal commissioner 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 environmental promises. It faced significant delays, ostensibly over IT issues, which drew condemnation.

"By revisiting the legislation rather than fixing a technical issue, the commission opened Pandora’s box," remarked Toussaint.

Originally, the regulation mandated that firms to track commodities to their exact plot of land using geolocation data, making them liable 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, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the strict due diligence triggered a backlash in Brussels from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's EU elections as a turning point, shifting the balance of power more skeptical of environmental rules.

"The other pressure has come 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

The passed law includes key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

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

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we invested significant resources into complying," 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 big frustration."

The Commission's Stance

An EU representative supported the final law, stating: "We have listened to concerns and acted to ensure a simple, fair and cost-efficient application."

"The revised regulation ensures stability, which is key for business and competent authorities to effectively enforce this vitally important regulation."