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Originally hailed as a pioneering regulation that would help stop the global crisis of deforestation.

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

"It has been hollowed out," stated the law's original author, pointing to the removal of key obligations for downstream traders 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.

Political Dismantling

Environmental vice-president Marie Toussaint 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 is a far cry from the demands of more than a million European citizens who supported an initiative in 2020 demanding a ban on deforestation-linked products.

When launched in 2021, then-Green Deal commissioner Frans Timmermans called it "the most ambitious legislation ever put forward to combat deforestation."

A Story of Dilution

The law's unravelling has been interpreted as the European Union retreating from its environmental promises. It faced two major postponements, reportedly over technical problems, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," remarked the Green MEP.

Originally, the regulation mandated that firms to trace commodities back to their exact plot of land using GPS coordinates, holding them accountable for forest loss along their supply lines with penalties and large financial penalties.

"This was not red tape for its own sake," Schally said. "These rules were the tool that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in Brussels from large companies, producer countries, rightwing parties and EU logging states.

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

"The other pressure came from major export markets outside the EU," said expert Andreas Rasche, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

The passed law features key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A option for more reductions was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

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

Uncertainty for Companies

The delays and changes have also caused frustration for businesses that complied early.

"It is very frustrating because we put a lot of effort into complying," stated a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a major letdown."

Official Defense

An EU representative supported the final law, saying: "We have listened to feedback and taken action to ensure a pragmatic and balanced application."

"The new text ensures stability, which is crucial for companies and national regulators to effectively enforce this very important law."