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It was a groundbreaking piece of legislation that would curb the worldwide crisis of deforestation.

However, the revised version of the EU's anti-deforestation law, previously touted as the flagship policy of the Green Deal, has emerged in a significantly diluted state, leading to alarm from its original architect and environmental politicians.

"It has been gutted," said Hugo Schally, pointing to the removal of crucial requirements for later-stage companies 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, fewer data points, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Green party MEP Marie Toussaint went further, describing the delays, loopholes and exemptions – including one for printed products – as the "political dismantling" of the law.

This outcome stands in stark contrast to the demands of more than a million European citizens who signed a petition in 2020 calling for a prohibition of deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans called it "the toughest law proposed to combat deforestation."

A Story of Dilution

The law's unravelling is seen by critics as the European Union retreating from its green talk. It faced two major postponements, ostensibly over IT issues, which sparked criticism.

"By reopening this file rather than fixing a technical issue, the commission opened Pandora’s box," commented the Green MEP.

In its first draft, the law required companies to trace commodities back to their specific geographic origin using geolocation data, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

"This was not red tape for its own sake," Schally said. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks provoked opposition in Brussels from large companies, producer countries, rightwing parties and member states with forestry industries.

Experts cite last year's EU elections as a turning point, shifting the balance of power more skeptical of environmental rules.

"The other pressure has come from big trading partners like the United States," noted corporate sustainability professor, implying the commission gave in 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 “low risk” category was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it rolled them back," said Schally. "By shifting responsibilities 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 invested significant resources into preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

A commission spokesperson defended the outcome, saying: "The commission has responded to concerns and acted to ensure a pragmatic and balanced application."

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