Since the European Commission announced its proposal and subsequent confirmation to delay the implementation of the European Union’s (EU) Deforestation Regulation (EUDR), attention has turned to how confectionery companies and the sector can seize the 12-month EUDR extension.
Focus remains on how the confectionery industry can move towards a deforestation-free cocoa sector. The majority of the world’s cocoa is produced in West Africa. Ghana and Côte d’Ivoire contribute approximately 60% of the world’s cocoa production, while Cameroon also makes 7% of the globe’s cocoa. The 2.4 million farmers in these West African countries responsible for cocoa production are integral to the cocoa supply chain.
The EUDR has the potential to significantly shape cocoa production in West Africa. As the calls for deforestation-free and traceable cocoa supply chains grow, the industry needs to recognise that preparing for the deforestation regulation is more than compliance. The industry also needs to collaborate to identify solutions to deliver deforestation-free cocoa production and achieve fair remuneration for cocoa farmers.
“The European Commission’s recent proposal for a 12-month phase-in period offers a critical window of opportunity for stakeholders to step up their efforts, but the urgency to act remains,” says IDH, an investment solutions company.
Higher risks for farmers
Due to their production volumes and proximity to protected areas, cocoa farmers in West Africa suffer considerable risks relating to compliance
requirements. Therefore, without sufficient support and guidance, these farmers may be unable to afford to continue producing cocoa. They may be excluded from high-value confectionery markets, threatening their livelihoods. If farmers feel forced to look for alternative income streams, the risk of deforestation also increases.
The IDH’s stance is that while the regulation represents an important step in reducing deforestation, its implementation must not put smallholder farmers at risk of exclusion.
Through its work in Côte d’Ivoire, Ghana and Cameroon, the IDH stresses that inclusive solutions are possible but require joint action from the public and private sectors.
“The success of these efforts lies in pre-competitive collaboration, where companies share some of the costs of collecting farm geolocation data between themselves and support the creation of reliable and inclusive national farmer databases,” says Matthew Spencer, Global Director of Landscapes at IDH.
Developing comprehensive traceability systems
Ensuring traceability within the cocoa supply chain is a compliance requirement of the EUDR. Yet, its presence and potential for impact go beyond this. IDH describes achieving traceability as “an anchor of a cocoa sector that can sustain itself while contributing to forest conservation”. If implemented successfully, traceability systems may push the needle towards achieving better livelihoods and securing a living income for cocoa farmers.
Côte d’Ivoire and Ghana have progressed their efforts in building national traceability systems, such as the Côte d’Ivoire Coffee-Cocoa Board system and the Ghana Cocoa Traceability System (GCTS) of the Ghanaian Cocoa Board (COCOBOD).
These traceability systems can map the geolocation of cocoa farms, record farmer data and trace cocoa along the supply chain from farm to shipment. The systems currently map over 2.2 million farms and approximately 1.5 million have unique ID cards in Côte d’Ivoire and Ghana.
“We do not want to lose momentum towards our preparedness and readiness on EUDR compliance despite the recent announcement of the proposal for postponement of the enforcement date,” says Vincent Okyere Akomea, Managing Director of Cocoa Marketing company and Chairman of the GCTS Steering Committee (Ghana).
Despite development efforts, the IDH recognises that a significant amount of indirectly sourced cocoa is untraced. Furthermore, there needs to be complete communication between company-operated systems and national databases.
Integrating real-time forest monitoring systems can ensure the confectionery industry complies with the EUDR. These systems can provide a vehicle to demonstrate that cocoa is sourced from deforestation-free land. The industry can monitor and track land-use changes by using satellite-based systems. Adopting these real-time tools allows national authorities to spot illegal deforestation activities and support due diligence efforts.
The implementation of the EUDR will see the EU market classify countries’ risk levels based on their deforestation activities. Utilising robust monitoring systems will help to improve their risk classification.
“Collaboration is the only way forward”
Alongside preparing for the EUDR arrival, the 12-month countdown allows the confectionery industry to get ready for the EU Corporate Sustainability Due Diligence Directive (CSDDD) and respond to farmers’ living income gap.
“The additional 12 months proposed by the European Commission should not be seen as a time to ease off but as a chance to scale what’s working, bring more cocoa farmers into sustainable supply chains, and lay the foundation for future progress on CSDDD and living income. Collaboration is the only way forward,” says Tessa Meulensteen, Global Director of Agri-Commodities at IDH.
As the confectionery companies now have a further 12 months to prepare for the EUDR’s introduction, the industry’s attention turns to how the globe and the sector can strike a balance between protecting farmers and forests. The IDH believes these go hand in hand.
“Farmers know the value of forests, and it has been shown that local communities and Indigenous people worldwide are the best forest protectors,” says Renske Aarnoudse, Senior Programme Manager for Agri Commodities at IDH.
Legislation is a big lesson that confectionery companies and the wider industry can learn from EUDR preparation to date. Laws can give a serious push to sustainability efforts that have often been based on voluntary industry commitments.
“Industry should, however, not be left alone to deliver the envisaged results on its own,” says Aarnoudse. IDH highlights that governments from producing and consuming countries can advance to ensure a more extensive reach. Subsequently, with that more profound impact, including smallholder farmers and SMEs should be actively supported. Effective policies promoting resilient farming practices and participatory forest protection can bring about synergies between farmers and forestry, simultaneously protecting them.
“The success of sustainable land-use management, including forest protection, often lies in combining protection with sustainable production and inclusion,” says Aarnoudse. “Where the public sector has a role to give policy guidance and ensure law enforcement, the private sector can support by providing economic perspective and development in line with the land-use plans,” Aarnoudse adds.
Recommendations to achieve robust public-private industry collaboration
The IDH shares the top 4 ways it believes the confectionery sector can prepare ahead of the EUDR’s 2025 implementation date:
- Find ways to share data to avoid duplication of efforts throughout the value chains, especially at the farmer level.
- Support the development and implementation of national traceability systems.
- In the short term, farmer sensitisation and support mechanisms should be prioritised to meet due diligence data requirements.
- Over time, ensure that farmers and their organisations can independently collect, manage and share traceability and due diligence data.
As the 12-month extension period to implementing the EUDR begins, the industry is exploring how best to develop tools like traceability systems and forest-mapping devices and grow strong partnerships. By doing so, the aim is to support the EUDR’s arrival and CSDDD implementation and enable farmers to earn a living income.
“The path to success lies in pre-competitive collaboration, innovation, and inclusivity,” the IDH states. “Now is the time to act—seizing this moment has never been more critical to transforming the cocoa sector.”
