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It was a pioneering regulation that would combat the worldwide crisis of deforestation.

But, the final version of the EU's anti-deforestation law, once touted as the crown jewel of the Green Deal, has been passed in a severely weakened state, leading to alarm from its initial author and environmental politicians.

"It has been hollowed out," said the law's original author, citing the exclusion of key obligations for downstream traders to verify the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, less information collected, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

Green party MEP a leading green politician was more blunt, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "political dismantling" of the law.

This final text stands in stark contrast to the hopes 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 fight deforestation."

From Ambition to Compromise

The regulation's dilution has been interpreted as the EU walking back its green talk. It faced two major postponements, ostensibly over technical problems, which drew condemnation.

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

In its first draft, the law required companies to track goods back to their specific geographic origin using geolocation data, holding them accountable for forest loss along their supply lines with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally explained. "These rules were the tool that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

Yet, the strict due diligence triggered a backlash in the EU capital from large companies, producer countries, conservative political groups and member states with forestry industries.

Analysts point to last year's European Parliament elections as a turning point, creating a new political majority more skeptical of green regulations.

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

Key Loopholes Introduced

The passed law features several critical weakenings:

• Downstream operators were largely freed from conducting rigorous checks.
• A new “low risk” category was created.
• A option for more reductions was established 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 rolled them back," lamented Schally. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"We feel very annoyed because we invested significant resources into complying," said 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

An EU representative supported the final law, stating: "The commission has responded to concerns and taken action to ensure a simple, fair and cost-efficient implementation."

"The revised regulation ensures stability, which is crucial for companies and competent authorities to successfully implement this very important regulation."