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It was a landmark regulation that would help stop the worldwide crisis of deforestation.

But, the revised version of the European Union's anti-deforestation law, once touted as the crown jewel of the Green Deal, has been passed in a significantly diluted state, leading to alarm from its initial author and environmental politicians.

"It has been gutted," stated Hugo Schally, pointing to the removal of crucial requirements for later-stage companies to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that fewer obligated actors, fewer data points, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

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

This outcome stands in stark contrast to the demands of more than a million EU citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious legislation proposed to combat forest loss."

From Ambition to Compromise

The regulation's dilution has been interpreted as the European Union retreating from its green talk. It faced two major postponements, ostensibly over IT issues, which sparked criticism.

"By revisiting the legislation instead of solving a technical issue, authorities invited political interference," commented Toussaint.

In its first draft, the law mandated that firms to trace goods back to their exact plot of land using geolocation data, holding them accountable for forest loss along their supply lines with criminal charges and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official explained. "It was the mechanism 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 strict due diligence triggered a backlash in the EU capital from large companies, exporting nations, rightwing parties and EU logging states.

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

"Additional intense pressure came from big trading partners outside the EU," said expert Andreas Rasche, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," lamented the law's author. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Business Frustration

The delays and changes have also created annoyance for companies that prepared in advance.

"It is very frustrating because we invested significant resources into complying," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

Official Defense

A commission spokesperson defended the outcome, saying: "We have listened to concerns and acted to ensure a simple, fair and cost-efficient application."

"The revised regulation ensures stability, which is key for business and national regulators to effectively enforce this vitally important regulation."