The European Union Deforestation Regulation (or EUDR) has been a hot, and even controversial topic, in the coffee industry for some time now. While the overall aim of the new legislation is undoubtedly positive, it has still received a fair share of criticism related to its implementation.
Regardless, producers, traders, and roasters will need to fully comply with the regulations by 30 December 2024, and prove that their EU coffee shipments are part of deforestation-free supply chains. If not, they risk losing access to one of the most important coffee markets in the world.
In a recent Reuters article, the International Coffee Organisation said importers have started to accelerate shipments to Europe ahead of the EUDR compliance deadline. In addition to creating a number of issues, such as low coffee stocks in producing countries, this could be a sign that the coffee industry still isn’t prepared for the roll out of these strict regulations.
I spoke to Bruno Domínguez García, CEO of Coolx, Harry Marshall, founder of OpenAtlas, and Vanúsia Nogueira, Executive Director of the International Coffee Organisation, to find out why it’s so important that roasters and traders are ready to comply with the EUDR.
You may also likeour article on how roasters can successfully comply with EUDR.
Unpacking the EUDR
Deforestation is a huge issue in the global agricultural sector, including the coffee industry. According to a 2022 United Nations Food and Agriculture Organisation study, EU imports of commodities (such as coffee) produced on deforested land accounted for up to 11% of global deforestation levels.
To directly address these issues, in June 2023, the European Parliament and the European Council announced the EU Deforestation Regulation. This new law prohibits European companies – including coffee traders and roasters – from importing commodities from supply chains that include deforestation.
As of December 2024, medium and large-sized companies which import goods into the EU must comply with new standards to prove their supply chains are deforestation free. Smaller-sized companies, meanwhile, must comply by June 2025.
Traders push for faster green coffee shipments: A sign of uncertainty?
Ahead of these deadlines, there have been reports claiming traders have accelerated green coffee shipments to Europe to avoid any issues once EUDR comes into force. This could indicate that the coffee industry still isn’t ready to adopt the new legislation – an issue that many continue to discuss.
Harry Marshall is the founder of OpenAtlas, a deforestation monitoring company that uses satellite imagery and AI to map areas of land.
“There is still so much uncertainty around the EUDR, and the speeding up of coffee shipments ahead of the end-of-year deadline is evidence of this,” he tells me. “Wishful thinking could be that EU competent authorities will be too preoccupied to enforce the EUDR at borders and ports, so they could miss fines or penalties for non-compliance, but that’s a question of risk appetite more than regulatory loopholes.
“If products land on the EU market prior to the enforcement period then they are not in scope of the EUDR,” he adds. “However, if roasters ‘transform’ green coffee after the enforcement date (i.e. they roast it in the EU after 30 December 2024) then roasters will have to prove they imported the coffee into the EU before 30 December 2024.”
But Harry also emphasises that more could have been done to prepare businesses for the EUDR.
“These misconceptions, among others, are evidence that the market is in a state of EUDR-induced confusion (and perhaps panic),” he says. “While EU regulators should have massaged the nuances of the EUDR better ahead of enforcement, businesses should also have made efforts across the last ±12 months to better inform themselves of their obligations.”
Addressing concerns about EUDR
It’s clear that there are still many questions about what full EUDR compliance actually means.
Vanúsia Nogueira is the Executive Director of the International Coffee Organisation.
“The coffee sector is still waiting for some clarifications from the EU Commission about the new legislation,” she says. “Based on assumptions, some traders and roasters have already imported shipments to Europe to check their compliance.”
So with so much uncertainty, what exactly do roasters and traders need to know, and how can they take the first steps to comply?
Bruno Domínguez García is the CEO of Coolx, a company that supports coffee importers to meet EUDR standards. He explains some of the biggest challenges that roasters need to address.
“They need to ensure the deforestation-free operation of all lots in their supply chains and make sure their coffee complies with legal laws in the country of production,” he tells me. These laws include:
- Land use rights
- Third party rights
- Labour rights
- Environmental protection
- Human rights
- Free consent (i.e. no coercion or forced labour)
- Tax, anti-corruption, and trade regulations
“Roasters also need to know the legal obligations that apply to them in order to comply with the EUDR,” he adds. “They also need to establish a Due Diligence system and manage it correctly (e.g. collect information, assess risks, and reduce them).
“As part of this, roasters and traders have to establish honest and transparent relationships with suppliers and customers to ensure proper EUDR compliance and enhance collaboration,” he adds.
Bruno also mentions the initial steps that roasters can take for EUDR compliance:
- Appoint an internal EUDR manager and work with an external advisory company
- Collect geolocation data for all supply chains
- Reduce deforestation or non-compliance risks associated with each supply chain
- Retain and share information with any necessary stakeholders
Compliance is a necessity
Understanding the EUDR may be overwhelming, but non-compliance means losing access to one of the most important coffee markets in the world. According to CBI, Europe accounted for 31% of global coffee consumption in 2022, and this number is expected to increase.
“Complete or partial compliance with the EUDR is a risk appetite question,” Harry says. “Ultimately, though, where this regulation differs from others (like the EUTR that preceded it) is that products won’t be audited randomly from within the EU market, but rather shipments simply won’t be allowed off ships at ports of entry – representing not just a regulatory risk of fines and other penalties, but also a supply risk: no verifiable EUDR compliance, no product to sell.”
Changing the perspective
Simply put, the consequences for roasters and traders are severe if appropriate measures aren’t taken. Bruno, however, emphasises that coffee businesses need to see this as an opportunity to improve their sustainable practices.
“The EUDR is a commitment to sustainability, transparency, and traceability, which are increasingly valued in the European market,” he tells me. “You can have a competitive advantage over companies that take longer to set up their due diligence systems, and establish stronger and closer relationships with producers.
“Moreover, you can innovate in your supply chains with traceability technologies and create a business that is more resilient to future environmental and social regulations,” he adds.
For traders and roasters operating in the European market, the EUDR is inescapable. Despite the significant challenges the legislation presents, businesses need to be prepared to comply.
“The EUDR sets a new standard in the coffee industry (among others). The fact that your coffee complies with the EUDR means that it’s in line with the highest environmental and social requirements worldwide,” Bruno concludes. “In the coming years, those who see the EUDR as an opportunity and adapt their supply chains to this standard will have a competitive advantage.”
Enjoyed this? Then readour article on what EUDR delays could mean for the coffee industry.
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