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Widely celebrated as a pioneering law that would curb the global crisis of deforestation.

But, the final version of the EU's anti-deforestation law, previously touted as the crown jewel of the Green Deal, has been passed in a significantly diluted state, leading to criticism from its initial author and green lawmakers.

"The regulation was gutted," stated the law's original author, pointing to the removal of key obligations for later-stage companies to check the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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 vice-president a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This final text stands in stark contrast to the demands of more than a million European citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.

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

From Ambition to Compromise

The regulation's dilution has been interpreted as the European Union retreating from its green talk. It faced significant delays, reportedly over technical problems, which drew condemnation.

"By revisiting the legislation rather than fixing a simple IT problem, the commission opened Pandora’s box," commented the Green MEP.

In its first draft, the law mandated that firms to trace goods back to their specific geographic origin using geolocation data, making them liable for forest loss along their supply lines with penalties and large financial penalties.

"This was not red tape 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 rigorous checks triggered a backlash in Brussels from large companies, exporting nations, conservative political groups and EU logging states.

Analysts point to last year's EU elections as a turning point, creating a new political majority less favorable toward environmental rules.

"Additional intense pressure came from big trading partners like the United States," said corporate sustainability professor, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Retailers and traders 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 – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it rolled them back," said the law's author. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

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

"We feel very annoyed because we invested significant resources into complying," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

An EU representative supported the final law, stating: "We have listened to feedback and taken action to ensure a simple, fair and cost-efficient implementation."

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