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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 EU's anti-deforestation law, once 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 crucial requirements for later-stage companies to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

Environmental MEP a leading green politician was more blunt, describing the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This outcome stands in stark contrast to the demands of over 1.2 million EU citizens who signed a petition in 2020 demanding a ban on deforestation-linked products.

When launched in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the toughest legislation ever put forward to combat forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its green talk. The proposal encountered significant delays, reportedly over technical problems, which drew condemnation.

"By revisiting the legislation instead of solving a technical issue, the commission opened Pandora’s box," commented Toussaint.

In its first draft, the regulation required companies to track goods back to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains with penalties and hefty fines.

"This was not red tape for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

However, the rigorous checks triggered a backlash in the EU capital from multinational corporations, exporting nations, conservative political groups and member states with forestry industries.

Experts cite last year's EU elections as a decisive moment, creating a new political majority more skeptical of green regulations.

"The other pressure came from major export markets outside the EU," said expert Andreas Rasche, implying the commission gave in to some requests during negotiations.

Key Loopholes Introduced

The passed law features key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

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

Uncertainty for Companies

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

"We feel very annoyed because we put a lot of effort into complying," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a major letdown."

Official Defense

An EU representative defended the outcome, stating: "We have listened to concerns and acted to ensure a simple, fair and cost-efficient implementation."

"The revised regulation ensures stability, which is key for business and national regulators to successfully implement this vitally important law."