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It was a groundbreaking law that would curb the global scourge of deforestation.

However, the final version of the EU's anti-deforestation law, once heralded as the crown jewel of the European Green Deal, has emerged in a significantly diluted state, leading to alarm from its initial author and green lawmakers.

"The regulation was stripped," said the law's original author, pointing to the exclusion of key obligations for downstream traders to check the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

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

Political Dismantling

Green party MEP Marie Toussaint went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This outcome is a far cry from the demands of over 1.2 million European citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.

When launched in 2021, the EU's climate chief the European commissioner called it "the most ambitious legislation ever put forward to fight deforestation."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its green talk. The proposal encountered significant delays, reportedly over technical problems, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, authorities invited political interference," commented the Green MEP.

In its first draft, the law mandated that firms to track goods back 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.

"It wasn't bureaucracy for its own sake," Schally said. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, conservative political groups and member states with forestry industries.

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 came from major export markets like the United States," noted corporate sustainability professor, suggesting the commission gave in to some demands in trade talks.

The Weakened Final Text

The passed law features several critical weakenings:

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

"Rather than strengthening downstream obligations, it rolled them back," said the law's author. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

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," stated a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

A commission spokesperson defended the outcome, saying: "The commission has responded 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 vitally important law."