On January 1, 2025, a law will come into force that is set to change the world. The EUDR – the European Union Deforestation Regulation. As a consumer, you won't notice it, but anyone who produces meat, soy, coffee, or cocoa and wants to continue exporting their products to the EU will be affected. As will everyone processing goods further down the supply chain.
What does this mean for coffee producers?
How deeply does the law interfere with the supply chain, and even with privacy?
Is it a neo-colonialist law?
Janina Grabs, Professor at the Esade Business School in Barcelona and, as of July 2024, Professor of Sustainability Research at the University of Basel, provides context.
Janina Grabs in conversation with Philipp Schallberger
When does the EUDR take effect?
The law will come into force on December 30, 2024.
Which products does the new EUDR law apply to?
The law applies to wood, beef, cocoa, palm oil, coffee, soy, and rubber.
What does the new law say?
It is a regulation at the EU level that is treated equally across the entire EU. It affects importers, exporters, or companies trading within the EU region. They must ensure that the respective chains are deforestation-free. They must prove this using GPS coordinates or polygons (area representations) showing exactly where the coffee was produced. They must prove that coffee was not planted on land that was forest after the end of 2020. If forest was converted to agricultural land after the end of 2020, then that is deforestation. Regardless of whether it was permitted in the producing country or not. In doing so, the EU relies on the FAO definition of what constitutes a forest. If coffee were to be imported from there, it would now be illegal.
What must companies do?
Ensure that products do not come from a high-risk area, or prove that their products were not produced on deforested land.
What is the idea behind it?
The EU wants to reduce imported deforestation. As consumer countries, we also have a responsibility. The law is good in principle, but it means a fundamental restructuring of the value chain in all these sectors, because everything must now be proven with GPS points. It is costly and leaves little time for implementation. The EUDR was adopted in June 2023. Companies have until the end of 2024, and SMEs until mid-2025, to implement it. That is relatively little time, especially for industries that for decades have rarely had insight into their supply chains.
What does this mean for producers?
Larger producers (and organizations) are currently well-prepared, smaller ones perhaps a bit less so, and disorganized, scattered producers might not manage to provide data at all. Andrew Hetzel shows this clearly in this article.
Larger buyers and traders might switch to larger, institutional producers (and organizations) for reasons of risk aversion, or increase their work with them. More complex chains might be considered less due to risk factors. That could be a disadvantage in the first few years because many companies cannot make their supply chains traceable that quickly.
And now?
Theoretically, producing countries could sit back, says Janina Grabs. “Hey, what are you offering us?” That remains somewhat theoretical, because roasters can simply switch and buy other coffee.
Who bears the costs for the transition?
That is not defined; in practice, it is the case that most producers and exporters have to pay here, but can hardly offset it against the green coffee price.
What must importers and companies do?
Collect data and submit a due diligence declaration, the exact form of which is not yet clear (as of May 2024).
Who owns the GPS data?
At the moment, it is being kept secret. Very personal data: the outline of a producer's farm. “How would we react here in Europe if we had to disclose everything just to be able to produce something?”
Is the EUDR a form of neo-colonialism?
The EU can do what it wants. But it is clumsy and has unintended consequences, such as producers being brought into the definition of the law so late.
Different realities
Some producers are better prepared, others less so. In the coffee sector: many producers in Brazil and other coffee-growing countries that are institutionally well-positioned are better prepared.
