Brazil, an agricultural giant, is the world's biggest consumer of pesticides, many of which are classified as highly hazardous.
The Senate approved the law which environmentalists and right activists have dubbed "the poison package" in November after two decades of controversy.
Lula decided to veto 14 sections of a dozen articles of the law aimed at making it easier to approve the use of new pesticides and giving greater decision-making powers to the agriculture ministry.
He did so "to guarantee adequate integration between productive needs, health care and environmental balance," the presidency said in a statement.
However, Greenpeace said in a statement that "the vetoed sections are not enough to ensure that people avoid some of the most harmful aspects" of the law.
The environmental NGO said the bill would "put more toxic agrochemicals in Brazilians' food and pollute the environment even more."
Brazil's agribusiness sector consumed nearly 720,000 metric tons of pesticides in 2021, or 20 percent of the global total, according to the United Nations' Food and Agriculture Organization.
The pesticide bill was first initiated in 1999, before being revived in 2022 by deputies defending the interests of agro-business -- the most influential pressure group in parliament -- with the support of former far-right president Jair Bolsonaro.
Human Rights Watch said earlier this month that the bill would open "the floodgates for dangerous pesticides," fast-tracking the registration of pesticides and removing a ban on pesticides "associated with cancer, endocrine disruption, genetic mutation, or harm to the reproductive system."
Now the ban only covers products that present an "unacceptable risk" to humans or the environment, a criterion considered very vague by critics of the text.
"Now a risk analysis will apply, but we don't know who will do that and how," Suely Araujo, former president of the Brazilian Environmental Protection Agency, told AFP.
The law also has international consequences.
The massive use of pesticides by Brazilian producers gives ammunition to those in Europe who oppose a free trade agreement between the European Union and the South American bloc Mercosur.
"Brazil is a top producer of the world's food, and its lax regulations on hazardous pesticides are a global concern," said Maria Laura Canineu, Brazil director at Human Rights Watch.
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