The European Union Deforestation Regulation (EUDR) is reshaping the global coffee trade. Enacted to reduce the EU's contribution to global deforestation, this regulation requires that raw materials entering or leaving the EU market be deforestation-free, meaning they cannot come from lands that were deforested after December 31, 2020. However, the regulation's stringent requirements, including detailed traceability and geolocation, are posing significant technological challenges for developing countries, where smallholder farmers dominate production.
Many smallholder farmers lack the necessary technological infrastructure and resources to comply with the EU's traceability requirements. In some coffee-producing areas in Ethiopia and Burundi, for example, there is little to no internet access, putting them at risk of exclusion from one of the world's largest markets. Additionally, importers are stockpiling coffee to avoid disruptions, which could drive up prices and overwhelm global supply chains as the regulation approaches full implementation in December 2025.
A new risk tier system established by the EUDR classifies countries as low, standard, or high risk, which determines the level of scrutiny applied to their exports. The European Commission is responsible for publishing the risk list by June 30, 2025. Preliminary discussions suggest that high-risk countries may include those with significant deforestation issues, such as Brazil, Indonesia, or Nigeria, while countries like Thailand may be classified as low risk due to stable forest cover. This classification will dictate the level of due diligence required: high-risk countries will face scrutiny on 9% of controlled commodities, standard-risk countries 3%, and low-risk countries 1%.
Despite facing criticism, the EU has postponed the implementation of the regulation until December 2025, providing a limited timeframe for preparation. Smallholder farmers must act quickly to avoid potential losses that could negatively impact their jobs and living standards.
We will keep you updated.
Despite facing criticism, the EU has postponed the implementation of the regulation until December 2025, providing a limited timeframe for preparation. Smallholder farmers must act quickly to avoid potential losses that could negatively impact their jobs and living standards.
We will keep you updated.
RSS Feed