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

However, the final version of the EU's anti-deforestation law, once touted as the crown jewel of the Green Deal, has emerged in a severely weakened state, leading to alarm from its initial author and green lawmakers.

"The regulation was stripped," said Hugo Schally, citing the removal of key obligations for later-stage companies to check the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, fewer data points, and less precise origin data would complicate the task of authorities.

Political Dismantling

Green party MEP Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "political dismantling" of the law.

This outcome is a far cry from the hopes of more than a million EU citizens who signed a petition in 2020 calling for a ban on deforestation-linked products.

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

From Ambition to Compromise

The law's unravelling has been interpreted as the EU walking back its environmental promises. It faced two major postponements, ostensibly over IT issues, which drew condemnation.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," commented the Green MEP.

In its first draft, the law mandated that firms to track goods back 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," Schally explained. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

However, the strict due diligence provoked opposition in the EU capital from large companies, exporting nations, rightwing parties and member states with forestry industries.

Experts cite last year's EU elections as a turning point, shifting the balance of power less favorable toward green regulations.

"The other pressure has come from major export markets outside the EU," said corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes key dilutions:

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

"Rather than strengthening rules for companies, it rolled them back," said the law's author. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for businesses that complied early.

"It is very frustrating because we invested significant resources into preparing," stated a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

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

"The new text provides for predictability, which is key for business and competent authorities to effectively enforce this vitally important regulation."