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Widely celebrated as a pioneering law that would help stop the worldwide crisis of forest loss.

However, 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 original architect and environmental politicians.

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

Schally cautioned that a reduced number of responsible companies, less information collected, and less precise origin data would make enforcement and prosecution more difficult.

Political Dismantling

Environmental vice-president a leading green politician went further, labeling 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 EU citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief the European commissioner trumpeted it as "the most ambitious legislation ever put forward to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its green talk. The proposal encountered two major postponements, reportedly over IT issues, which drew condemnation.

"By reopening this file rather than fixing a simple IT problem, the commission opened Pandora’s box," commented the Green MEP.

Originally, the law mandated that firms to trace goods back to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with penalties and large financial penalties.

"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 complex supply chains."

Mounting Pressure

Yet, the rigorous checks provoked opposition in the EU capital from multinational corporations, producer countries, rightwing parties and EU logging states.

Experts cite last year's EU elections as a decisive moment, shifting the balance of power less favorable toward green regulations.

"The other pressure has come from big trading partners outside the EU," said corporate sustainability professor, implying the commission gave in to some requests during negotiations.

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was created.
• A window for further "simplifications" was opened 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 stripped them back," said Schally. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"We feel very annoyed because we invested significant resources into complying," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

A commission spokesperson defended the outcome, stating: "The commission has responded to concerns and taken action to ensure a pragmatic and balanced application."

"The revised regulation provides for predictability, which is key for business and national regulators to successfully implement this very important regulation."