EU Deforestation Regulation Sparks Heated Debate Over Coffee Industry’s Future
A newly formed coalition of civil society organizations, VOCAL (Voice of Organizations in Coffee Alliance), is pushing back against demands from developing nations like Ethiopia for an extension on the enforcement of the European Union Deforestation Regulation (EUDR). The regulation, set to take effect on December 30, 2024, aims to reduce deforestation and promote sustainable practices in the global coffee trade.
VOCAL, an affiliate of the Netherlands-based VOICE Network, argues that timely enforcement of the regulation is crucial for ensuring a fair competitive landscape. The coalition’s report, "Coffee’s Regulatory Blend," criticizes the global coffee industry’s response to environmental, economic, and social challenges as being "too little, too late" and marked by "resistance, disengagement, and misinformation."
The report highlights the challenges faced by developing countries like Ethiopia, which have fragmented coffee cultivation systems managed primarily by smallholder farmers. Ethiopian officials have requested an extension for the enforcement of the EUDR, citing the need for more time to prepare and align with compliance measures.
However, VOCAL emphasizes that the coffee industry’s response to the evolving regulatory environment has been insufficient. The report notes that the sector has been slow to engage in key discussions on implementation, resulting in a lack of comprehensive strategies for operating under the new regulation.
A recent study by the Overseas Development Institute (ODI) forecasts that the EUDR will have significant economic repercussions for Ethiopia, including a potential 18.4% decline in total exports, a 5.8% decrease in imports, a 3.3% loss in public revenue, and a 0.6% reduction in GDP.
Industry players also emphasize the potential adverse impacts of the EUDR on the Ethiopian coffee industry. The general manager of the Ethiopian Coffee Exporters Association (ECEA) has cautioned that potential non-compliance could result in a considerable loss, estimated at 35-40% of Ethiopian coffee exports to EU markets.
VOCAL recommends that regulators provide clear guidance, robust support, and reliable compliance tools to ensure the regulation achieves its desired impact. The consortium emphasizes the importance of dialogue with stakeholders, particularly industry players in countries of origin, to navigate the complexities of the regulation.
As the debate continues, the future of the global coffee industry hangs in the balance. Will the EUDR promote sustainability and environmental protection, or will it lead to economic hardship and unintended consequences for developing countries like Ethiopia? Only time will tell.