The European Union deforestation regulation (EUDR) came into force on 29 June 2023 to ensure that imported commodities, like cacao, are deforestation-free. To qualify as 'deforestation-free,' cacao must have been produced on land that has not been subject to deforestation after 31 December 2020.
Europe stands as the main importer of cacao beans globally, accounting for over half of the world’s imports. Over the past four decades, cacao production has been steadily increasing, and the EU's demand for cocoa is on the rise. This, however, raises critical questions about the implications for the cocoa sector.
Companies supplying cocoa beans or chocolate bars to the EU market bear the primary responsibility. Key requirements include:
Ensuring that products are deforestation-free,
Produced on land not converted from forest to agricultural use after 31 December 2020.
Production must also comply with the relevant legislation of the country of production, including social and environmental laws.
Rigorous due diligence is necessary to demonstrate compliance, involving traceability systems, data collection, verification from producers, deforestation risk assessments, and monitoring systems for deforestation.
These regulations will impose additional burdens on suppliers and producers, both in terms of cost and bureaucratic hurdles. The impacts may vary across the supply chain, but it is crucial that the burden does not disproportionately fall on producers who are already grappling with high poverty levels, increasing production costs, and numerous other challenges.
To add to this issue, the government in cacao producing countries is not capable of resolving this within the timelines demanded by the EU.
Navigating these complexities will require collaboration, understanding, and a commitment to sustainable practices throughout the cocoa supply chain. For now, we work alongside our producers to comply.