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It was a pioneering regulation that would combat the worldwide crisis of deforestation.

But, the revised version of the EU's anti-deforestation law, previously heralded as the flagship policy of the Green Deal, has emerged in a significantly diluted state, leading to criticism from its initial author and environmental politicians.

"The regulation was hollowed out," stated Hugo Schally, citing the removal of key obligations for downstream traders to verify the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would complicate the task of authorities.

Political Dismantling

Environmental vice-president a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – such as one for paper goods – as the "political dismantling" of the law.

This outcome stands in stark contrast to the demands of over 1.2 million EU citizens who supported an initiative in 2020 calling for a prohibition of deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious legislation proposed to fight deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the European Union retreating from its environmental promises. The proposal encountered two major postponements, ostensibly over technical problems, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, authorities invited political interference," remarked Toussaint.

In its first draft, the regulation required companies to track commodities back to their specific geographic origin using geolocation data, making them liable for deforestation in their supply chains 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 stopped companies from hiding behind complex supply chains."

Intense Lobbying

Yet, the rigorous checks triggered a backlash in the EU capital from multinational corporations, exporting nations, rightwing parties and EU logging states.

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

"The other pressure came from major export markets outside the EU," said expert Andreas Rasche, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Downstream operators were largely freed from conducting rigorous checks.
• A new exemption for small operators was created.
• A option for more reductions was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," said the law's author. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"We feel very annoyed because we put a lot of effort into complying," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

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

"The new text ensures stability, which is crucial for companies and competent authorities to successfully implement this vitally important regulation."