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It was a groundbreaking law that would help stop the worldwide crisis of deforestation.

But, the final version of the European Union's anti-deforestation law, once touted as the flagship policy of the European Green Deal, has emerged in a severely weakened state, leading to criticism from its initial author and green lawmakers.

"The regulation was hollowed out," said Hugo Schally, pointing to the removal of key obligations for downstream traders to check the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would hinder monitoring and legal action.

Political Dismantling

Environmental vice-president a leading green politician was more blunt, describing the delays, loopholes and exemptions – including one for printed products – as the "systematic weakening" of the law.

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

At its launch in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the toughest legislation proposed to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its environmental promises. The proposal encountered two major postponements, ostensibly over IT issues, which sparked criticism.

"By reopening this file rather than fixing a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

Originally, the regulation required companies to trace goods back to their specific geographic origin 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," the former official said. "These rules were the tool that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

Yet, the strict due diligence provoked opposition in Brussels from large companies, exporting nations, conservative political groups and member states with forestry industries.

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power 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 requests during negotiations.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Downstream operators were largely freed 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 stripped them back," said the law's author. "Moving obligations to producers, it reduced accountability."

Business Frustration

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

"It is very frustrating because we put a lot of effort into complying," said Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

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

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