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It was a groundbreaking piece of legislation that would help stop the global scourge of forest loss.

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 criticism from its original architect and green lawmakers.

"The regulation was stripped," stated Hugo Schally, citing the removal of key obligations 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, less information collected, and less precise origin data would complicate the task of authorities.

Political Dismantling

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

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

At its launch in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the toughest law proposed to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its green talk. It faced 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 the Green MEP.

Originally, the law mandated that firms 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.

"It wasn't bureaucracy for its own sake," Schally explained. "These rules were the tool that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

However, the strict due diligence provoked opposition in Brussels from large companies, exporting nations, conservative political groups and member states with forestry industries.

Analysts point to last year's EU elections as a decisive moment, creating a new political majority less favorable toward environmental rules.

"Additional intense pressure came from big trading partners like the United States," said corporate sustainability professor, implying the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law includes key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was created.
• A option for more reductions was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it stripped them back," said Schally. "Moving obligations 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 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 major letdown."

Official Defense

A commission spokesperson supported the final law, stating: "We have listened to concerns and acted to ensure a pragmatic and balanced implementation."

"The new text provides for predictability, which is crucial for companies and national regulators to successfully implement this vitally important regulation."