Deforestation and Forest Degradation

Deforestation and forest degradation are advancing at an alarming rate. The Food and Agriculture Organization of the United Nations (FAO) estimated that between 1990 and 2020, 420 million hectares of forest were lost worldwide (about 10% of the world’s remaining forests, equivalent to an area larger than the European Union).

Deforestation and forest degradation are significant contributors to global warming and biodiversity loss, and two of the most critical environmental challenges of our time.

The world is continuing to lose 10 million hectares of forest each year, and are severely affected by climate change. We are at the critical point where action is needed.

EUDR Regulation (EU) 2023/1115

In 2019 the Commission adopted several initiatives to address the global environmental crisis. To combat deforestation and forest degradation, and impement necessary measures to prevent biodiversity loss.

This regulation regulates the introduction and placing on the European Union market and the export outside the European Union of certain so-called relevant products, which contain or have been produced using the relevant raw materials, namely: Cattle, Cocoa, Coffee, Oil Palm, Soybean, Wood and Rubber through their derived products.

Therefore, this regulation impacts both customs-related commercial operations and operations within the internal market.

The specified products cannot be introduced, marketed, or exported unless they meet three conditions:

• They are free from deforestation.

• They have been produced in accordance with the relevant legislation of the country of production.

• They are covered by a Due Diligence Declaration (DDD)

They are covered by a Due Diligence Declaration (DDD)

One of the key requirements is the obligation for Operators (those involved in the implementation) to avoid supplying raw materials or products that are not free from deforestation or that have not been produced in accordance with the relevant legislation of the country of production.

Companies introducing into (or exporting from) the EU products, (Operator according to the regulation) are obliged to implement a Due Diligence system, performing risk assessments and mitigating any risks that are not considered negligible, before introducing into (or exporting from) the EU market.

Operators are also obliged to publicly report annually, as widely as possible, and include online their Due Diligence system and the measures they have taken to ensure compliance with their obligations.

Companies classified as Traders in the regulation (those trading products already introduced into the EU market) are responsible for storing and sharing information (with competent national authorities upon request) related to their supply chains.

Large traders, *those that are not small or medium-sized enterprises (SMEs) are also required to conduct due diligence. This is because of the level of influence they exert over supply chains.

EUDR Regulation on Coffee

The coffee supply chain is subject to this Regulation, both green coffee and processed products – roasted or decaffeinated coffee, husks, hulls or coffee substitutes.
However, soluble coffee is not currently included.

What happens if the coffee being marketed or exported is not compliant?

If competent authorities confirm that coffee being introduced into the EU is not compliant, they will notify the customs authorities, who will then not authorize the release for free circulation or the export of the product.

Action Plan in the EUDR Regulation

Implementation of the new regulation will begin on December 30, 2024, for large companies and by June 30 for micro-enterprises and small businesses.

Our deadline will commence in June 2025.

Objectives regarding Data Transmission

The European Commission is tasked with developing and publishing an electronic interface for Customs to facilitate data transmission and have the Due Diligence Declaration before import or export. The interface must be operational no later than June 30, 2028, and will enable:

• Operators and traders to fulfill the obligation of submitting the Due Diligence Declaration.

• Transmission of this Due Diligence Declaration in the information system.

Our Goals

We are in contact with our suppliers and will begin collecting necessary information from all of them as soon as possible. We will classify this information so that by the end of 2024, when the information system containing Due Diligence Declarations is established, we can register it.

We are waiting for the European Commission to launch the electronic interface to start asking suppliers for the requirements of the regulation and to add to them.