What does the new EU regulation on deforestation provide?

Η νέα νομοθεσία της Ευρωπαϊκής Ένωσης αλλάζει για πάντα τη βιομηχανία του καφέ.

Recently, there has been a lot of talk in the daily news about the upcoming "Regulation against Deforestation" passed by the European Union and expected to be fully implemented for all its member states within the coming year. This is environmental legislation, which comes to correct long-term distortions that affect the natural environment in a catalytic way, through the imposition of restrictions on a series of products whose cultivation endangers the forests of tropical regions, the protection of which has become more important than never, in the context of climate change.

As we can easily imagine, coffee is included among the products to which the new regulation places restrictions! The world's most important product after oil, and the most popular drink around the planet after water, has a significant environmental footprint, and the European Union seems determined to take a decisive step towards solving the problem. Let's get to know better what it is about and how the regulation affects us as consumers.



Brief points on the European Regulation against Deforestation

The regulation covers a range of seven products (beef, cocoa, coffee, palm oil, rubber, soybeans and timber) and their derivatives and covers products produced from 6/29/23 onwards. Products that belong to the above categories are not included, but are by-products of recycling.
It is predicted that from the end of 2024 (and for some companies, from the second half of 2025) non-compliance with the regulation will mean the prohibition of traffic within the borders of the European Union, as well as the prohibition of import and export from it.
More specifically, the regulation provides that the above products, in order to be legal, have been produced on land that has not been converted from forestry to agriculture after the end of 2020. Furthermore, in the case of timber, this also includes the conversion of forestry areas in forests intended for logging (forest degradation).
In addition, the production of the specific products should comply with the legislation of the country of production, especially with regard to environmental issues, human rights, labor relations, money laundering, etc.
The adjustment time is given in order to allow the relevant supply chains to adapt to the new data. It is worth noting that in the event of a violation of the regulation, the company that placed the inappropriate products on the European market becomes responsible before the law.

What does the implementation of the regulation mean for the coffee industry and consumers?

The coffee industry has many open environmental issues (waste and waste management, water use, transport environmental footprint, etc.) with deforestation being included among the main ones. As coffee cultivation takes place in countries located between the Tropics of Cancer and Capricorn (the famous "Coffee Belt"), many acres of forest are cleared or degraded each year to make way for coffee cultivation, with corresponding practices to be noted in other products, such as palm oil or cocoa, which are also produced in tropical countries. As the European Union is one of the largest importers of coffee in the world, the adoption of the relevant regulation is considered a decisive step for the next day in the coffee industry, which will have a clearly more neutral environmental footprint than today.

Naturally, the implementation of the regulation is expected to cause serious upheaval at the global level, as it concerns widely traded products, giant companies with strong lobbying and fragile, vulnerable economies in the developing world.

When it comes to coffee, much of it is produced in developing countries, often under environmentally questionable conditions. Rushing into compliance with EU regulation (in order not to lose an important market) is sure to push thousands of people working in this industry into the margins and into destitution, for at least a few years. In countries in Africa, for example, where farmers' wages are already extremely low, the reduction in arable land and the grueling paperwork to obtain the relevant certificates have significant implications, which experts expect could lead to poorer countries even in social explosions.

On the other hand, the implementation of the regulation is more than certain to create an increase in coffee prices in Europe. The conditions (inflation, energy crisis, climate change) create an explosive cocktail that has already created a decrease in the amount of coffee available and a noticeable increase in prices. From 2025 onwards, and until the situation balances out and the coffee industry and the supply chain adapt to the new data, prices are expected to rise even higher, creating significant pressures.

Of course, a number of issues still arise, regarding issues of smuggling, corruption, bureaucracy, etc., but something that is completely expected from a regulation that shakes up the waters by changing the regime of decades in such strong industries.



The coming years are difficult for coffee, but this is perhaps the price for a safer and healthier environment, with more forests.