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Episode 9 Overview
The European Deforestation Regulation (“EUDR”) is set to come into force over the course of 2024 and will have an impact on every cocoa bean, every gram of derivative product, and every piece of finished chocolate that enters the EU, no matter where the cocoa was grown or the derivative or finished product was produced.
Deforestation has been in the spotlight of the EU’s attention for some time. According to the Food and Agricultual Organization of the UN, it is estimated that ten million hectares of forest are lost worldwide each year, with almost 90% of being caused by agricultural development, and the conversion of forests into agricultural land. For the EU, the top six commodities — oil palm (34.0%), soy (32.8%), timber (8.6%), cocoa (7.5%), coffee (7.0%), and cattle (5.0%) — account for the largest percentage of deforestation.
— From the Coffee Market study linked to below.
The new regulation sets strong mandatory due diligence rules for companies that want to place relevant products on the EU market or export them. Operators and traders will have to prove that the products are both deforestation-free (produced on land that was not subject to deforestation after 31 December 2020) and legal (compliant with all relevant applicable laws in force in the country of production).
Companies will also be required to collect precise geographical information on the farmland where the commodities that they source have been grown, so that these commodities can be checked for compliance. Member States need to make sure that not complying with the rules leads to effective and dissuasive penalties.
Despite the widespread impact and the imminent requirement to be compliant with the regulations, there is still a universe of unknowns when it comes to many specifics of implementation.
In this episode of #PodSaveChocolate, my guest Antonie Fountain of VOICE Network and I will be discussing some of the most pressing issues that farmers, governments, brokers/traders, processors, and chocolate makers need to understand about the knowns, the known unknowns, and the unknown unknowns of the EUDR and what it means for your business.
The penalties for being out of compliance are stiff: 4% of turnover that can be attributed to the sales of the affected commodities. For chocolate makers, this means not just to the cocoa but also to the paper products used in packaging, to any CBEs/CBRs derived from palm oil, and to any coffee that might be in the recipe.
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