Study Suggests EUDR Will Force Compliance Even on Non-EU Coffee Supply Chains – CoffeeTalk

The European Union’s (EU) new anti-deforestation law, effective from the end of December, will compel numerous coffee firms to ensure compliance with EU regulations for all their products, not solely those intended for the EU market. A study by the non-profit organization Trase reveals that the EU Deforestation Regulation (EUDR) will require importers to demonstrate that their products are free from raw materials sourced from deforested lands, necessitating tracing back to the specific plots where the materials were cultivated.

For coffee producers that predominantly ship to the EU, extending EUDR compliance across their entire supply chain is likely to be more economically viable than maintaining separate supply chains for EU and non-EU markets. The EU represents about 40% of global coffee imports, with firms supplying the bloc handling nearly 80% of worldwide coffee shipments. Major coffee companies like JDE Peet’s ship 84% of their beans to the EU, while Louis Dreyfus and Neumann Gruppe ship 63% and 53%, respectively. Trase suggests that for these companies, the implementation of traceability requirements across their entire supply chains may prove to be the most cost-effective approach. Hence, the deforestation law could have a broader impact than anticipated due to the size and influence of these companies.

Despite facing criticism regarding the potential for the EUDR to create segregated supply chains—thereby excluding small-scale farmers in remote areas from the EU market due to the complexities of tracing products—Trase challenges this viewpoint. The organization posits that many companies exporting to both the EU and other markets may adopt similar standards beyond the EU more readily, thus mitigating the risk of marginalizing smaller producers. The EUDR aims to combat the 10% of global deforestation attributed to EU imports, positioning itself as a critical component in addressing climate change, as deforestation ranks as the second leading cause after fossil fuel combustion.

Read More @ Reuters