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Originally hailed as a pioneering regulation that would combat the global scourge of deforestation.

But, the revised version of the EU's anti-deforestation law, once touted as the flagship policy of the Green Deal, has emerged in a severely weakened state, leading to alarm from its initial author and environmental politicians.

"The regulation was stripped," said Hugo Schally, citing the exclusion of key obligations for downstream traders to verify the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would hinder monitoring and legal action.

A Watered-Down Law

Environmental vice-president Marie Toussaint went further, describing the delays, loopholes and exemptions – including one for printed products – as the "systematic weakening" of the law.

This outcome is a far cry from the demands of over 1.2 million European citizens who signed a petition in 2020 calling for a ban on deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner called it "the toughest law proposed to fight deforestation."

From Ambition to Compromise

The regulation's dilution has been interpreted as the European Union retreating from its green talk. It faced two major postponements, ostensibly over IT issues, which drew condemnation.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

In its first draft, the law required companies to trace goods back to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally said. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence provoked opposition in Brussels from large companies, exporting nations, rightwing parties and EU logging states.

Experts cite last year's European Parliament elections as a turning point, creating a new political majority less favorable toward green regulations.

"Additional intense pressure has come from major export markets outside the EU," noted corporate sustainability professor, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A option for more reductions was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it rolled them back," said Schally. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"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 big frustration."

The Commission's Stance

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

"The new text provides for predictability, which is crucial for companies and competent authorities to effectively enforce this very important law."