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Widely celebrated as a landmark law that would combat the worldwide crisis of deforestation.

But, the final version of the EU's anti-deforestation law, previously heralded as the crown jewel of the Green Deal, has been passed in a severely weakened state, prompting alarm from its original architect and green lawmakers.

"It has been hollowed out," said Hugo Schally, pointing to the exclusion of key obligations for later-stage companies to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned 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 vice-president Marie Toussaint went further, labeling the delays, loopholes and exemptions – including one for paper goods – as the "systematic weakening" of the law.

This final text is a far cry from the hopes of over 1.2 million European citizens who signed a petition in 2020 calling for a prohibition of deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious legislation proposed to combat deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its environmental promises. The proposal encountered two major postponements, ostensibly over IT issues, which drew condemnation.

"By reopening this file instead of solving a simple IT problem, authorities invited political interference," remarked Toussaint.

In its first draft, the law mandated that firms to track commodities to their exact plot of land using GPS coordinates, holding them accountable for forest loss along their supply lines with penalties and large financial penalties.

"This was not red tape for its own sake," the former official explained. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence provoked opposition in the EU capital from large companies, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's EU elections as a turning point, shifting the balance of power less favorable toward environmental rules.

"The other pressure came from major export markets like the United States," said corporate sustainability professor, implying the EU yielded to some demands in trade talks.

The Weakened Final Text

In the final legislation includes key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A option for more reductions was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it stripped them back," lamented Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also created annoyance for businesses that complied early.

"It is very frustrating because we put a lot of effort into preparing," stated 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

A commission spokesperson defended the outcome, stating: "We have listened to concerns and acted to ensure a pragmatic and balanced application."

"The new text ensures stability, which is key for business and national regulators to effectively enforce this vitally important regulation."