Combating deforestation – the new EU Regulation

In late 2024, the new EU Regulation 2023/1115 for a deforestation-free supply chain (EUDR) for large and medium-sized enterprises enters into force, and as of June 2025, it is also to apply for all small and micro enterprises. From the perspective of all sustainability aspects, the Regulation represents a global milestone regarding deforestation-free supply chains which initially applies to soy, cattle, palm oil, timber, coffee, cocoa and India rubber. 

Thus raw materials and produce may only be put into circulation, provided on the market or exported if they are free of deforestation and forest damage. This means that they may not have been produced in areas in which deforestation or damage to forests has occurred since the 31.12.2020. In addition, the raw materials and produce have to comply with the country of origin’s legislation and with the elementary human rights specified in the Regulation. 

The European parliamentarians have spent several years negotiating the Regulation and are now committing entrepreneurs to collect data and documents and conduct a systematic risk analysis with risk minimisation targets and to report on the supply chain to create general transparency. The EU Member States audit the business reports and may impose sanctions ranging from fines of up to four per cent of total turnover within the European Union to exclusion from public tendering. 

Myths about the deforestation-free supply chain

In the run-up to the new Regulation entering into force, international businesses warn not only of the additional documentation effort and the lack of technical prerequisites at local level but also of rising commodity prices and interruptions in supply chains if the new requirements cannot be met. The Federation of German Food and Drink Industries points to the already existing supplier surveys and local checks on compliance with standards. So the topic already has market relevance. The preconditions for implementation differ considerably among the countries, so that neither criticism of the EUDR nor positive examples allow for any generalising.

In the forests, the need for conservation and global trade interests clash with one another. This is why a global alliance of environmental organisations performed a fact check on the implementation of the deforestation-free supply chain in August 2024.  

Its report states that the GPS data on agricultural and forest areas are already available and do not yet have to be established. Thus due diligence can already be implemented without much red tape. The EU has already even provided an input screen for this purpose. Hence it is also clear that a GPS location has to be given for every tree, as opposed to what critics are spreading regarding logging. 

The EU Regulation does not replace any existing certificates, but can even be mounted on them and integrate them in blockchain solutions for documentation. And last but not least, the EU initiative signals other competitors to face fair competition. While the environmental organisations cannot deny that deforestation products will be ousted to non-EU countries, they point out that other economic regions are addressing the topic and that the scope for circumvention is getting narrower. For example, Chinese agro-importers Cofco have been importing their first deforestation-free soy from Brazil since this summer. And Cofco have shipped the first deforestation-free soy from Argentina to Ireland, in the EU.

Local case studies

The overseas service of the Netherlands Ministry of Agriculture has analysed implementation at local level in three case studies. 

Since 1990, Côte d’Ivoire has lost around 90 per cent of its natural rainforests, and its government is hoping for new impulses via the EU Regulation. Wim Simonse of the consultancy Away4Africa underscores the significance of the Netherlands above all in the cocoa sector, for that is where Côte d’Ivoire ships its most important agricultural product to. Côte d’Ivoire’s government has already met the legal framework conditions with agroforestry programmes and certificates of its own. With a “Strategy for Zero Deforestation” and an “Initiative for Cocoa and Forestry”, the government is offering industry and smallholders a wide range of options to work the EU Regulation into their activities. As buyers, major corporations like Barry-Callebaut and Cargill play an important role in the implementation of the EU Regulation for the integration of the smallholders. Existing pilot projects are to take the topic of rainforest conservation to scale. 

Nevertheless, a number of challenges still have to be mastered. Often, smallholders still need to be familiarised with the EU Regulation via training and information events. Links between the local initiatives and the EU’s objective are lacking. At the end of the day, the smallholders also have to document their activities and make an additional effort, which raises cocoa production costs. What the additional gain is compared to the greater effort required yet needs explaining. 

In Colombia, deforestation-free coffee is being developed in various ways depending on the farmers concerned. In cooperation with the University of Wageningen in the Netherlands, traceability strategies are being worked out for each individual farm. The new coffee is being integrated in a local sustainability concept and is to strengthen the individual communities within the value chain. The focus is on the indigenous cultivation methods in the region of Magdalena in the Sierra Nevada mountains, which is also a biodiversity hotspot. In principle, the indigenous objective of sustainable land management coincides with the EU Deforestation Regulation. One special topic is the issue of land titles and the establishment of a land registry. 

In Vietnam, there are around 1.4 million individual coffee plantations, which are to ensure livelihoods and food sovereignty for 600,000 smallholders. The Deforestation-free Supply Chain can build on the predecessor of the “Sustainable Trade Initiative” between this Asian country and the Netherlands, within which smallholders enjoy links reaching up to various government ministries. This strategy already established initiatives for deforestation-free coffee aimed at growing the valuable raw material cost-efficiently in the sense of sustainability in 2023. The country’s twelve largest coffee enterprises, which account for 70 per cent of Vietnam’s coffee growing, are part of the initiative. To complement the latter, Vietnam’s Ministry of Agriculture has adopted an action plan for the implementation of the deforestation-free supply chain in which areas are accurately located, e.g. via GPS. Dutch importers are cooperating more closely with the Vietnamese producers in implementing the new Regulation. 

International cooperation is also important in implementing international supply chain obligations to ensure that the producers are not left out on a limb. 

Roland Krieg, journalist, Esens, Germany