In recent months, the EUDR Regulation has been the main topic of the coffee sector.

Many questions have been raised by all actors in the supply chain with its publication and many are still being questioned.

Deadlines, tools, responsibilities... compliance with the regulation is a challenge for the whole chain, but it is indisputable that compliance will be positive for curbing deforestation and its consequences in the medium/long term.

The EUDR arises from the European Union's determination to contribute to the eradication of global deforestation by promoting responsible practices in the trade of raw materials that may cause deforestation.

The Regulation sets out guidelines to ensure that products imported into and exported from Europe do not contribute to deforestation and forest degradation, greenhouse gas emissions and global biodiversity loss.
 

 
 
 Therefore, the regulation establishes that only products that meet the following conditions may be introduced, placed on the market or exported to the European Union market:

1. They are deforestation-free, establishing 31 December 2020 as the deadline for this deforestation.
For these purposes, deforestation is considered to be ‘the conversion of forests for agricultural use’ and forest degradation is considered to be ‘structural changes in forest cover consisting of a conversion of primary forests or forests of natural regeneration to forest plantations or other wooded areas, as well as the conversion of primary forests to afforestation’.

2. They comply with relevant legislation in the country of production on ‘land use rights, environmental protection, forestry regulations (including forest management, but also biodiversity conservation when related to forest harvesting), third party rights, labour rights, human rights protected under international law, the principle of free, prior and informed consent (FPIC) as set out in the UN Declaration on the Rights of Indigenous Peoples, and tax, anti-corruption, trade and customs regulations’. 

3. They are covered by a Due Diligence Declaration.
Before placing them on the market, operators shall submit a Due Diligence Declaration through an information system to be set up by the Commission. The Due Diligence shall cover three aspects:
a) data and document collection
b) risk assessment measures
c) risk mitigation measures, if identified.

Studies show that deforestation is advancing at a worrying rate. In 2022, the Food and Agriculture Organisation of the United Nations (FAO) published a report which found that agricultural expansion is the main cause of deforestation and the resulting loss of forest biodiversity and that between 2000 and 2018, 90% of deforestation was related to agricultural activity, either through the expansion of cropland or the expansion of grazing land.

Due to the magnitude of these data and the fact that Europe is one of the main consumers of raw materials associated with deforestation, the European Commission and the European Parliament adopted different measures that led in 2021 to a proposal for a Regulation that, after the relevant negotiations, was published in the Official Journal of the European Union on 9 May 2023, entering into force on 29 June 2023.

With the measures taken, the EUDR aims to:

- Contribute to safeguarding natural ecosystems and preserving biodiversity, whose loss are directly responsible for exacerbating climate change.

- Promote responsible production and cultivation practices that do not lead to deforestation.

- To ensure that products traded in the European Union are deforestation-free.

- Promote sustainable and responsible trade of raw materials.

9 June 2023		Publication of the EUDR Regulation
29 June 2023		Entry into force of the EUDR Regulation
30 December 2023		Designation of Member State´s competent authorities
30 December 2024		Entry into force of obligations for Member Estates and large and medium-sized companies
30 June 2025		Entry into force of obligations for micro and small companies

On 2 October, the European Commission published a press release proposing a 12-month postponement of the entry into force of the regulation due to the multitude of issues raised by all stakeholders worldwide that could affect the correct implementation of the regulation. The proposal will be voted on in the coming days, so news on whether the postponement will become effective is expected soon.

How have we worked during these months to ensure that our supply chain is deforestation free?

1. Creation of a multidisciplinary team, which began with the collection of data from our suppliers at different stages, providing them with guidelines and support on the information necessary to certify that their product complies with the regulations.

2. Contact and collaboration with different external companies that will provide us with support in this compilation and verification of the information provided by the producers to validate its veracity through specialised tools.

3. Development of a Due Diligence system to provide the EU platform the required information and obtain the necessary registration number for each import.

4. Participation in the EU GeoTest testing programme to assess that the GeoJSON geo-reference files provided as part of our Due Diligence are valid, obtaining approval from the EUDR team of the European Commission.

We are closely monitoring the practical implementation of the regulation in order to be able to process all the necessary data and comply with the regulation for imports starting from the date of implementation of the regulation.

The implementation of the EUDR poses numerous challenges for all actors involved in its implementation.

While it is true that the legal responsibility lies with the operator in charge of placing the raw material on the European market, producers bear a large part of the data collection work and it is a reality that many of them do not have the knowledge or the means (technical or economic) to carry out this task. This could result in many of them being excluded from the market not because they do not comply with the regulations but they cannot prove that they comply with it. Poorest countries probably will experience will experience the major complications in this regard.

Moreover, the EU's forthcoming classification of low-, medium- and high-risk countries could put countries classified as high-risk at a disadvantage if the market shifts towards those that are ‘less complicated’, with all that this would imply for their domestic economies.

Other issues such as the volume of data to be requested from producers and how to handle it so as not to expose their privacy, the costs of adapting to the regulation that supply chains must assume or the regulations on deforestation that exist in some of the producer countries are also key to its successful implementation.

All in all, the implementation of the EUDR will be very positive in terms of mitigating deforestation and forest degradation, creating traceable and transparent supply chains and calling for responsible, ethical and sustainable consumption with the least possible negative impact on the conservation of our planet.

Sources:

- REGULATION (EU) 2023/1115 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL, of 31 May 2023 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010.
- Ministry for Ecological Transition and the Demographic Challenge. Summary of the European Regulation on Combating Deforestation.