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

But, the final version of the European Union's anti-deforestation law, previously heralded as the flagship policy of the European Green Deal, has been passed in a significantly diluted state, leading to criticism from its original architect and environmental politicians.

"The regulation was stripped," said the law's original author, pointing to the removal of crucial requirements for later-stage companies to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, less information collected, and less precise origin data would make enforcement and prosecution more difficult.

Political Dismantling

Green party vice-president Marie Toussaint was more blunt, describing the delays, loopholes and exemptions – including one for paper goods – as the "systematic weakening" of the law.

This outcome is a far cry from the demands of more than a million European citizens who supported an initiative in 2020 calling for a prohibition of deforestation-linked products.

When launched in 2021, then-Green Deal commissioner Frans Timmermans called it "the toughest law proposed to combat forest loss."

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, reportedly over technical problems, which drew condemnation.

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

Originally, the regulation mandated that firms to trace commodities back to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with criminal charges and hefty fines.

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

Mounting Pressure

However, the strict due diligence provoked opposition in the EU capital from large companies, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's EU elections as a decisive moment, shifting the balance of power more skeptical of environmental rules.

"Additional intense pressure came from big trading partners outside the EU," said expert Andreas Rasche, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

The passed law features key dilutions:

• Downstream operators were largely freed from conducting rigorous checks.
• 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 “high risk” scrutiny.

"Rather than strengthening downstream obligations, it rolled them back," lamented 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 invested significant resources into preparing," said a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

A commission spokesperson defended the outcome, saying: "The commission has responded to concerns and taken action to ensure a simple, fair and cost-efficient application."

"The new text provides for predictability, which is crucial for companies and national regulators to effectively enforce this vitally important law."