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It was a groundbreaking regulation that would combat the global crisis of deforestation.

However, the final version of the European Union's anti-deforestation law, previously heralded as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, leading to alarm from its original architect and green lawmakers.

"The regulation was gutted," said Hugo Schally, citing the exclusion of crucial requirements for downstream traders to verify the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

A Watered-Down Law

Environmental vice-president Marie Toussaint went further, describing the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This outcome is a far cry from the hopes of more than a million EU citizens who signed a petition in 2020 calling for a ban on goods linked to forest destruction.

When launched in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious legislation 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. The proposal encountered two major postponements, reportedly over IT issues, which drew condemnation.

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

Originally, the law mandated that firms to trace goods back to their exact plot of land using GPS coordinates, making them liable for forest loss along their supply lines with criminal charges and large financial penalties.

"This was not red tape for its own sake," the former official said. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the strict due diligence triggered a backlash in the EU capital from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

Experts cite last year's European Parliament elections as a decisive moment, creating a new political majority more skeptical of green regulations.

"Additional intense pressure has come from big trading partners outside the EU," noted corporate sustainability professor, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation includes several critical weakenings:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it stripped them back," said Schally. "By shifting responsibilities upstream, it reduced accountability."

Business Frustration

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 preparing," stated 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

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

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