Tackling the ‘how’ of EUDR compliance in coffee and cocoa supply chains

As part of the EUDR Unpacked series, Innovation Forum recently hosted a webinar to explored the implications of the newly proposed deadlines for EUDR compliance and how the delay will impact cocoa and coffee supply chains. The panel included perspectives from NGOs, farmers associations, and global traders. Below is a summary of the discussion. 

Panellists included: 

The conversation was moderated by Ian Welsh, publishing director, Innovation Forum. 

The EUDR’s journey has been turbulent, marked by industry pushback and political amendments. Julia Christian from Fern described the recent delay as a relief but criticised the political manoeuvres, which introduced loopholes and jeopardised the regulation’s integrity. “How you regulate makes a difference,” she noted, stressing the importance of robust implementation. Some proposals, such as the “no-risk” country exemptions, could have undermined traceability requirements and allowed circumvention of the law.

Farmers have expressed mixed feelings about the delay. Ismail from Ghana’s Cocoa Abrabopa Association stated, “We’ve already incurred so much cost to prepare for this regulation. Now, we’ll have to spend even more when implementation begins again.” His association, which has mapped over 20,000 farms, faces additional expenses to update and validate data in line with EUDR requirements.

Ismail noted that farmers generally welcome environmental protection initiatives, understanding the growing impact of climate change on their productivity. However, he also highlighted the significant costs cooperatives have incurred in preparing for these efforts, particularly through investments in farm mapping and data collection, which have placed a considerable financial burden on them.

Alongside the financial burden, the key concerns include the burden of repeated compliance assessments, the lack of direct EU support for cooperative organisations, and the uncertainty about handling farmers who expanded farms after 2020 (cocoa that was produced on land deforested after 31 December 2020 or that is not traceable does not comply with the EUDR). 

Ismail emphasised the need for EU-level assessment of collected data and expressed frustration over the delay, which may lead to additional costs for re-verification.

Key challenges include:

Ismail highlighted the specific challenge of farmers who may have expanded into forested areas after the 2020 cut-off date, questioning how to address their situation without compromising livelihoods. Raina Lang from Conservation International echoed this sentiment, highlighting that there is a lack of awareness from farmers as to what the implications of EUDR could mean for them. 

There was a call for clearer guidance and testing opportunities for companies to implement new systems under the EUDR, as delays and uncertainties persist within the European Union's regulatory framework. Panellists expressed hope that clarity would emerge in the coming months, allowing companies to better prepare and adapt. One significant issue raised was land tenure, particularly for farmers in EUDR commodity supply chains who lack formal or recognised land titles. 

 Ismail highlighted that land tenure in Ghana often operates through customary systems. Farmers commonly work land under verbal agreements with chiefs or family representatives, with witnesses providing legitimacy. These traditional arrangements are respected and widely recognised in Ghana, aligning with local laws. Josephine from Association of Women in Coffee explained that land ownership in Kenya typically involves either family agreements or formal legal ownership. Both traditional and formal arrangements are legally recognised in Kenya, meaning that EUDR compliance regarding land tenure is generally not an issue for farmers. Julia added that recent EU guidelines confirm that formal land title documents are not required under the EUDR, as long as national laws recognize customary or traditional arrangements. While some countries may have specific documentary requirements, these are exceptions rather than the norm.

The central question remains: who pays? While the regulation aims to protect forests, it risks shifting financial burdens onto the farmers it seeks to support. “Farmers are being asked to provide data and coordinates—an enormous challenge for smallholders,” said Josephine from the Association of Women in Coffee in Kenya. Many smallholders lack the resources to meet these demands without external support. Ismail stressed that the responsibility for ensuring deforestation-free commodities lies with the off-takers, not the producers. He voiced concern that any additional costs from EUDR compliance should not lead to reduced premiums for farmers. Ismail called for traders to bear the additional costs of EUDR compliance, highlighting the substantial efforts and investments made by firms in mapping and other activities required for certification. A comparison was made with the coffee sector, where an EUDR premium is added separately to the certification premium, with traders handling a significant portion of the compliance process. The discussion underscored the need for fair distribution of the costs and benefits along the value chain.

Olivier Laboulle from Louis Dreyfus Company mentioned paying a premium to cover compliance costs, but there were concerns about whether these premiums reach the farmers. Ismail, clarified that while premiums may be received, the costs of compliance, including mapping and other activities, are the responsibility of the firms and farmer organisations, not the exporters. He emphasised that additional costs should be borne by the traders, and farmers should receive the agreed premiums.

Julia Christian argued that companies must take more responsibility: “We know that companies such as Tony’s Chocolonely are paying sustainability compliance premiums. Practices like this should become widespread to ensure that costs don’t fall on farmers.”

However, public funding also plays a role. Julia noted, “The amount of EU funding available globally for EUDR compliance is insufficient, barely covering one region such as Indonesia. There’s a pressing need for targeted financial support to farmer cooperatives.” Josephine also emphasised the need for greater collaboration between the public and private sectors, both in producing and consuming countries, to share the financial and technical burdens. She also called for a clear roadmap and a phased implementation approach to ensure that smallholders are not left financially exposed.

Antonie from the VOICE Network expressed concern over the changing political landscape in the EU and its potential impact on environmental regulations. He emphasised the critical role of old-growth forests in planetary health, carbon capture, and rainfall patterns, noting that voluntary measures have been insufficient to protect these ecosystems. He viewed the new regulation as a crucial step toward stronger environmental protection and sustainable practices, highlighting the troubling shift in EU politics and the long-awaited need for regulatory action. Panellists agreed on the necessity of this long-awaited regulation and expressed frustration over the delays, which they felt have wasted valuable time . Raina stressed the importance of collaborative discussions to address inconsistencies across supply chains, while cautioning against unproductive debates that risk derailing progress. She urged a shift toward practical, sector-specific solutions to tackle challenges and avoid losing valuable time.

The discussion highlighted that the EUDR is not the only regulation impacting commodity sectors. In addition to the EUDR, the CSCCD and CSRD regulations will soon come into force, with a focus on due diligence. Unlike the EUDR's focus on deforestation-free commodities, due diligence emphasises that while problems like child labour or forced labour may exist, companies must acknowledge and address these issues. It requires a shift from voluntary, selective sustainability efforts to a more comprehensive approach where businesses must confront all their challenges and work towards solutions. Antonie stated the concept of "anti-looking away" is gaining traction, particularly in the Netherlands, urging companies to no longer ignore problems but to take responsibility for addressing them. Miguel Gamboa from Rainforest Alliance echoed these thoughts, arguing that regulation remains a valuable tool to support due diligence processes. He noted that Rainforest Alliance has invested in systems to help producers and companies demonstrate compliance, covering key aspects of the regulation, including deforestation and legal standards. He also stressed the importance of expanding tools for non-certified producers, such as deforestation risk maps, to ensure broader compliance.

While the purpose of the EUDR is widely accepted, stakeholders are grappling with the complexities of its implementation. The 12-month delay presents a valuable opportunity to refine these processes. “This delay is a golden opportunity to clarify requirements and provide support,” said Josephine, highlighting the need for simplified guidelines and stronger collaboration among stakeholders. Miguel Gamboa from Rainforest Alliance echoed these concerns, noting the lack of clarity around evaluation: “Producers are ready, but the operational side—how countries and companies validate the data—remains a challenge.”

Olivier Laboulle from Louis Dreyfus Company highlighted the role of supply chain actors in easing the compliance burden: “We’ve invested in compliance systems to ensure smallholders in our supply chains are EUDR-compliant without even realising it. However, for those outside organised networks, the risk of exclusion remains.”

Ensuring equitable participation in supply chains is critical. Antonie Fountain from the Voice Network stated, “smallholder farmers cannot bear these costs alone. Supply chain actors and governments must step up to share the responsibility.” 

A key discussion centred on the differing approaches of the coffee and cocoa sectors regarding the de-commoditization of their products. Coffee has a more established system of premiums for quality, certification, and different varieties, while cocoa tends to have a simpler structure, with little differentiation in payments for certified versus non-certified products. This highlights a potential opportunity for the cocoa sector to adopt more nuanced pricing to reflect the added value of practices like agroforestry or compliance with the EU Deforestation Regulation (EUDR). The conversation emphasised that the challenge lies not just in regulatory compliance but in changing the mindset around how farmers are compensated for additional efforts, suggesting that a more differentiated payment structure could help address concerns like those raised by Ismail.

Raina from Conservation International urged companies to think beyond immediate compliance and adopt long-term sustainability strategies. “What does holistic due diligence look like?” she asked. “Companies need to move past checkboxes and focus on proactive, nature-positive strategies that create lasting impact.” The broader regulatory landscape also plays a role. Antonie pointed out, “The EUDR isn’t the only regulation on the horizon. With frameworks such as the Corporate Sustainability Due Diligence Directive (CSDDD), companies must adopt comprehensive strategies that address multiple regulations.”

Stakeholders agreed on the importance of collaboration to ensure the EUDR’s success. Josephine stressed the need for clear communication: “Farmers need to understand why these measures are necessary and how they benefit the industry and the planet.” She also called for national governments to centralise compliance systems, reducing duplication and inefficiencies.

Meanwhile, Olivier highlighted the potential for innovation in financing mechanisms: “Creating a separate EUDR premium—like those already in place for certifications—could help distribute costs more equitably across the supply chain.”

The 12-month delay provides an opportunity for:

The EUDR is a critical step in safeguarding forests and promoting sustainability, but its success depends on shared responsibility and equitable implementation. As Ismail concluded, “We welcome the regulation because it protects farmers who do things right. But additional costs should not be borne by us alone.”

The next 12 months present a unique opportunity to address gaps in implementation, ensuring that the EUDR supports farmers and fosters sustainable supply chains—while protecting the planet for future generations.

To see the recordings of the other webinars in the series, click here.