Europe is the largest consumer of coffee in the world. From a tiny cup of espresso in a local Italian cafe to an expensive pour-over in a hip Swedish neighborhood, Europe undeniably loves coffee. It imports around 33% of the world’s coffee, and according to the USDA, it is responsible for 25% of coffee consumption.
So what? Well, coffee farming is a significant contributor to deforestation.
Deforestation is the second-largest source of carbon emissions, with 90% of deforestation caused by agricultural expansion. Annually, ten million hectares of forest, or an area the size of Portugal, are cut down worldwide to make room for farming or urban expansion. Focusing on that little brown bean, coffee farming is linked to about 6% of Europe-led deforestation across the coffee-producing world.
To help end deforestation, the European Union (EU) created the European Union Deforestation Regulation (EUDR), which came into effect in June 2023. The regulation aims to increase transparency in supply chains and ensure that key EU products do not contribute to further deforestation.
Starting Dec. 30, 2025, large companies will be required to specify the exact location of coffee bean production. Smaller companies will be subject to the same requirements beginning in June next year. Other industries affected by this regulation include cocoa, soy, rubber, and wood, among others.
The regulation, which has been delayed from its planned start date of Dec. 30, 2024, is putting pressure on the supply chains of coffee and other agricultural industries. If a company cannot specify the exact production location, it will lose access to the European market.
The EUDR’s Effect on the Coffee Industry
Brazil, Vietnam, Colombia, Indonesia, and Ethiopia are among the world’s largest coffee-producing countries, with Brazil exporting over 60 million bags of coffee a year. Thousands of small farms contribute to each country’s coffee exports, with Vietnam having over 1.4 million small farms. For most of these countries, the coffee industry is a significant part of the economy.
Many small farmers are finding themselves under a lot of pressure with the enforcement of this regulation. A large majority of coffee production happens in developing countries. Many small-time farmers don’t have access to the geolocation technology required per the EUDR, which is putting a strain on the supply chain.
The cost of complying with the EUDR could be significant for many small, family-run farms. Several requirements, such as the cost of geolocation technology, certifications, and additional data collection, could cause a financial burden on many small farmers who rely heavily on the European market.
In a recent interview with The New York Times, ODI Global, an international think tank dedicated to positive change, economist Jodie Keane said:
“We all want to prevent deforestation, but if you’re going to apply that standard to rural producers, you’re going to have to provide a lot of outreach, sensitization, you’re going to have to invest in learning how to do things differently so that they don’t just get dropped from the supply chain.”
The New York Times also interviewed some of the farmers this new regulation would affect, including Dejene Dadi, head of the Oromia Coffee Farmers Cooperative Union in Ethiopia. “Of course, data is very important to us, but what we are just saying is we need support. It’s very challenging and costly, and we don’t have any help,” said Dejene Dadi.
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The European Commission announced on April 14 that it is taking steps to simplify the regulations’ guidelines while also aiming to reduce unnecessary costs for economic operators and authorities by about 30%. These revisions also include a decrease in due diligence statements, with the goal of guaranteeing easier and more efficient data entry.
A lack of information on specific implementation strategies and minimal decision-making power are huge concerns for these small farmers. The revision of the guidelines last month will hopefully ease these uncertainties and offer support to these small-time producers.
Jessika Roswall, Commissioner for Environment, Water Resilience and a Competitive Circular Economy, stated:
“We are committed to implementing EU rules on deforestation in a spirit of close partnership, transparency, and open dialogue. Our aim is to reduce administrative burden for companies while preserving the goals of the regulation. We will continue to work very closely with all stakeholders to ensure that our rules deliver on reducing global deforestation and forest degradation in the least burdensome way for companies.”
Additionally, according to the recent press release, the Commission has allocated 86 million euros to aiding partner countries in their compliance efforts.
The true impact of this regulation will not be fully realized until December. Until then, we can only hope that our favorite coffee beans will continue gracing our local cafes and supermarkets.
So next time you savor a sip of that dark brown energy juice, be mindful of its journey and the people who brought it to you.
Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — Cover Photo Credit: Wojciech Pacześ.
