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Originally hailed as a groundbreaking law that would help stop the global scourge of deforestation.

But, the revised version of the European Union's deforestation regulation, previously touted as the crown jewel of the European Green Deal, has emerged in a significantly diluted state, leading to criticism from its initial author and environmental politicians.

"It has been gutted," said Hugo Schally, citing the exclusion of key obligations for downstream traders to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, less information collected, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

Green party MEP Marie Toussaint was more blunt, labeling 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 hopes of over 1.2 million EU citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

When launched in 2021, the EU's climate chief the European commissioner trumpeted it as "the toughest law ever put forward to combat forest loss."

A Story of Dilution

The law's unravelling has been interpreted as the EU walking back its environmental promises. It faced two major postponements, reportedly over IT issues, which drew condemnation.

"By revisiting the legislation rather than fixing a technical issue, authorities invited political interference," remarked Toussaint.

In its first draft, the law required companies to track commodities back to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," the former official said. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the rigorous checks provoked opposition in Brussels from multinational corporations, exporting nations, rightwing parties and member states with forestry industries.

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 like the United States," said corporate sustainability professor, implying the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Downstream operators were mostly exempted 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," said the law's author. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

The delays and changes have also created annoyance for businesses that complied early.

"It is very frustrating because we invested significant resources into preparing," stated a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

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

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