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Widely celebrated as a groundbreaking piece of legislation that would combat the global crisis of deforestation.

However, the final version of the European Union's anti-deforestation law, once touted as the flagship policy of the European Green Deal, has emerged in a significantly diluted state, prompting alarm from its initial author and green lawmakers.

"The regulation was hollowed out," stated Hugo Schally, citing the removal of crucial requirements for later-stage companies to check the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

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

Political Dismantling

Environmental MEP Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – including one for printed products – as the "political dismantling" of the law.

This final text is a far cry from the demands of more than a million European citizens who supported an initiative in 2020 demanding a prohibition of deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious law proposed to combat deforestation."

From Ambition to Compromise

The law's unravelling has been interpreted as the EU walking back its green talk. The proposal encountered significant delays, ostensibly over IT issues, which drew condemnation.

"By revisiting the legislation rather than fixing a simple IT problem, authorities invited political interference," commented Toussaint.

Originally, the regulation mandated that firms to trace commodities 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.

"This was not red tape for its own sake," Schally said. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

However, the rigorous checks triggered a backlash in the EU capital from large companies, producer countries, conservative political groups and member states with forestry industries.

Experts cite last year's EU elections as a decisive moment, creating a new political majority more skeptical of environmental rules.

"Additional intense pressure came from major export markets like the United States," noted corporate sustainability professor, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A option for more reductions was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it stripped them back," said the law's author. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Uncertainty for Companies

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

"It is very frustrating because we put a lot of effort into preparing," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

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

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