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It was a groundbreaking piece of legislation that would help stop the global crisis of forest loss.

But, the final version of the EU's anti-deforestation law, once heralded as the flagship policy of the Green Deal, has emerged in a significantly diluted state, prompting alarm from its original architect and green lawmakers.

"It has been gutted," said the law's original author, pointing to the exclusion of crucial requirements for downstream traders to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, less information collected, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Green party MEP Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This outcome stands in stark contrast to the demands of more than a million EU citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

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

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its green talk. The proposal encountered significant delays, ostensibly over technical problems, which sparked criticism.

"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," remarked the Green MEP.

Originally, the law mandated that firms to trace goods to their specific geographic origin 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 made the rules enforceable, established traceability, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

However, the strict due diligence triggered a backlash in the EU capital from large companies, producer countries, rightwing parties and EU logging states.

Experts cite last year's European Parliament elections as a decisive moment, shifting the balance of power more skeptical of green regulations.

"Additional intense pressure has come from big trading partners outside the EU," said corporate sustainability professor, suggesting the EU yielded 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 window for further "simplifications" was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it rolled them back," lamented Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also created annoyance for businesses that complied early.

"It is very frustrating because we invested significant resources into preparing," 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."

The Commission's Stance

An EU representative supported the final law, saying: "We have listened to feedback and taken action to ensure a pragmatic and balanced implementation."

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