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Widely celebrated as a landmark regulation that would curb the worldwide scourge of deforestation.

But, the revised version of the EU's anti-deforestation law, previously touted as the flagship policy of the European Green Deal, has emerged in a significantly diluted state, leading to criticism from its initial author and green lawmakers.

"The regulation was hollowed out," said Hugo Schally, citing the removal 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, fewer data points, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Green party MEP Marie Toussaint went further, describing the delays, loopholes and exemptions – including one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the demands of over 1.2 million European citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

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

From Ambition to Compromise

The regulation's dilution has been interpreted as the EU walking back its environmental promises. The proposal encountered two major postponements, ostensibly over technical problems, which sparked criticism.

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

In its first draft, the law required companies to trace commodities to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," the former official explained. "It was the mechanism that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

However, the rigorous checks provoked opposition 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 turning point, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure has come from major export markets like the United States," said expert Andreas Rasche, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A option for more reductions was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening rules for companies, it stripped them back," said the law's author. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

The delays and changes have also created annoyance for companies that prepared in advance.

"It is very frustrating because we invested significant resources into preparing," stated a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

Official Defense

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

"The revised regulation provides for predictability, which is key for business and national regulators to successfully implement this very important law."