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Widely celebrated as a pioneering piece of legislation that would help stop the worldwide crisis of forest loss.

But, the revised version of the European Union's anti-deforestation law, previously heralded as the crown jewel 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 key obligations for downstream traders to check the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that fewer obligated actors, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

Political Dismantling

Green party vice-president Marie Toussaint went further, labeling the delays, loopholes and exemptions – such as 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 signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

When launched in 2021, the EU's climate chief the European commissioner called it "the toughest law ever put forward to fight deforestation."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its environmental promises. The proposal encountered significant delays, ostensibly over IT issues, which drew condemnation.

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

In its first draft, the regulation required companies to trace commodities back to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally said. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

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

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

"The other pressure has come from big trading partners outside the EU," said expert Andreas Rasche, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it rolled them back," lamented Schally. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"It is very frustrating because we invested significant resources into preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

A commission spokesperson supported the final law, saying: "The commission has responded to feedback and taken action to ensure a simple, fair and cost-efficient implementation."

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