Major Coffee Companies May Be More Prepared For The EUDR Than They Claim To Be – CoffeeTalk

The European Union Deforestation Regulation (EUDR) was a significant battleground in 2024, with major coffee companies and industry groups attempting to weaken its implementation until 2025. The EUDR, the first of its kind globally, aimed to tackle the impacts of seven commodities on forests and peoples’ rights. It was approved with an overwhelming democratic mandate in 2023, sending a clear signal about the EU’s determination to drastically reduce its contribution to clearing land for agriculture.

The law was initially greeted as a breakthrough in the global battle against forest loss, and seen as a template for others to follow around the world. However, after the breakthrough came the “greenlash,” lobbyists, politicians, and industry forces like coffee companies tried to sabotage Europe’s efforts to end deforestation in its supply chains. Lobbyists, politicians, and industry forces like coffee companies tried to disregard democratic principles, threaten the EU’s credibility with its trading partners, and undermining those companies that had already spent tens of millions of euros preparing for EUDR implementation.

Major coffee companies and EU coffee industry lobby groups were at the forefront of some of the most bitter, groundless attacks on the EUDR. Letters shared by insider sources reveal the hostile lobbying that the coffee industry organized against the EUDR, which helped bamboozle Germany and Austria into attacking the EUDR. This lobbying was carried out by the German Coffee Federation, which includes 4C, Dallmayr, Fairtrade Deutschland, Melitta, Rainforest Alliance, and Segafredo; and by the European Coffee Federation, which represents 700 companies including titans such as ECOM, Illycaffè, Lavazza, Nestlé, Starbucks, and Tchibo. Multiple leading European associations for food, drinks, and commodities, including coffee, have written to the EU Commission, deploring the challenges in implementing the EUDR.

However, at the eleventh hour, on Dec. 3, 2024, the EUDR was salvaged by courageous MPs and EU member states, who rejected amendments that would have fatally weakened the EUDR. The law, however, has been delayed by a year, and will only come into application at the end of 2025.

Coffee is the sixth-biggest driver of global deforestation, with farmers in Brazil, Vietnam, and Indonesia clearing ancient rainforests to make way for plantations. As the world’s biggest coffee consumer, the EU is deeply complicit in these harms. In 2018, EU coffee imports were responsible for an estimated 14,750 hectares of deforestation, an area equivalent to almost 21,000 football pitches, and 17.2 million metric tons of CO2e emissions from land-use change. Coffee was the third-highest deforestation risk of any of the agricultural commodities imported by the EU, behind soy and beef, and higher than palm oil, cocoa, and natural rubber.

Coffee production is also linked to human rights abuses, with hundreds of thousands of children thought to be in child labor for coffee. Between 1996 and 2023, the Brazilian Labor Inspection Department found 3,700 workers in slavery-like conditions in coffee plantations throughout Brazil, including in areas that directly supplied Starbucks and Nestlé. Many more enslaved people are suffering unheard and unseen.

The European Union’s (EUDR) coffee supply chain regulation has been a topic of debate among the coffee industry. While the EUDR was recently rescued, it is not safe for the industry to continue attacking it. The EUDR compliance costs for a large EU coffee company are estimated to be between 0.03-0.07% of annual company revenue, with a potential impact on the consumer price of coffee being a shockingly low 0.018%.

The coffee industry and lobbyists often complain about the difficulty in tracing the commodity from the plot of land where it is produced, a key requirement for proving products are deforestation-free and EUDR-compliant. However, the EU’s coffee supply chains are actually less complex than other commodities that fall under the EUDR’s scope. If the palm oil, cocoa, and rubber industries can comply with the EUDR, then coffee should be ready as well.

The range of countries producing most of the world’s coffee is not particularly diverse, meaning that the bases of the global supply chains are not more complex than those of most of the other products targeted by the legislation. Most coffee comes from Brazil, Vietnam, and Colombia. 21% of the world’s coffee is produced on estates and farms larger than 50 hectares, 19% come from estates and farms of 5-50 hectares, and the remaining 60% comes from 12.5 million smallholder coffee farmers with less than 5 hectares.

Unlike many other commodities, coffee does not have much structural complexity to contend with: most coffee imports are just beans. In contrast, processing commodities such as palm oil, soy, and natural rubber results in a multitude of separate products, making it easier for coffee to comply with the EUDR.

Provenance helps coffee sales. Coffee behaves less like a “pure commodity” than palm oil, soy, beef, leather, wood, or rubber, and there is a significant portion of the coffee market where supply chain traceability is part of real market advantage.

Many coffee companies have the building blocks in place to comply with the EUDR, even if the blocks are a bit broken and need some fixing. For example, many major coffee companies such as Nestlé, JDE Peet’s, and Starbucks have existing commitments to exclude deforestation and slavery from their supply chains. However, few of the certification schemes they rely on truly guarantee deforestation-free coffee.

The so-called “territorial” approach embraced by JDE and other coffee companies does not allow for full supply chain traceability, as the EUDR requires. As a result, only an insufficient subset of companies are working toward full compliance with the EUDR.

Coffee companies must not make the most vulnerable suffer by shifting the burden of compliance onto vulnerable smallholders and workers like pickers or sprayers. Instead, coffee companies must pay workers and farmers a living income, provide them with long-term contracts, targeted investments, and technical and financial support.

Coffee consumption in the EU has long carried within it a dark secret of embedded deforestation. Many coffee companies have been complicit in vast quantities of forest destruction and rights abuses for decades. In 2025, they must wake up, smell the deforestation, and fix it.

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