The European Union Deforestation Regulation (EUDR) is a bold move to combat global deforestation. It’s also a complex and monumental ask of companies importing seven key commodities (cocoa, coffee, cattle, oil palm, rubber, soy, and wood) and their derivatives into the EU. Beginning 30 December 2024, large companies will need to perform extensive due diligence and reporting across their supply chains to ensure that their activities are not associated with deforestation. Micro and small businesses will be expected to meet the requirements just six months later.

To help, Palladium’s ‘Regeneration’ is introducing a new technical assistance program for businesses. The program is tailored to support key players in the cocoa and coffee industries across various countries: Ghana and Côte d'Ivoire for cocoa, and Kenya, Ethiopia, and Uganda for coffee.
The program is designed to address three primary focus areas, ensuring that businesses can adapt and thrive under the new EUDR guidelines.

1. Traceability, Regulation, and Data Management

“Understanding the journey of cocoa and coffee from the farm to the European market is crucial,” explains Palladium’s Jose Maria Ortiz. “The new technical assistance facility will empower businesses to meet the EUDR's traceability requirements.” This involves developing robust systems to track the movement of cocoa and coffee, ensuring transparency and accountability throughout the supply chain.

2. Unlocking Additional Finance

Scaling operations to meet new regulatory standards often requires substantial financial investment. The new program will help businesses to identify and access the right kind of finance. By doing so, these companies can expand their operations sustainably, meeting the increased demand for responsibly sourced products.

3. Strategy Development and Governance

Strong leadership and effective governance are vital for any business aiming to comply with the EUDR. The technical assistance program will help businesses strengthen their leadership and governance structures. This improvement will not only increase revenue but also make these companies more attractive to investors.

Over the past four years, these focus areas were identified through extensive collaboration with stakeholders in the coffee and cocoa markets. This comprehensive approach ensures that the support provided is both relevant and practical, addressing the real needs of the industry.

This technical assistance facility will complement the Rebuild Facility's existing returnable grants program. This initiative has already provided working capital financing to 21 sustainable cocoa and coffee companies. The results have been impressive: over 19.3 million euros in revenue and additional funding, securing the incomes of more than 42,600 smallholder farmers, and maintaining sustainable land management across 78,350 hectares.

The impact of the EUDR extends beyond compliance, Ortiz explains. “By fostering sustainable practices in the supply chains of key commodities, the regulation aims to reduce the EU's environmental footprint significantly, and help multinationals to transform their value chain into sustainable practises with a nature first focus.” The focus on deforestation and forest degradation aligns with global efforts to combat climate change, preserving vital ecosystems and biodiversity.

As the December 2024 deadline approaches, this new program represents a crucial lifeline for cocoa and coffee businesses. By providing the tools and support needed to navigate the complexities of the EUDR, the program not only helps these businesses survive but also thrive in a more sustainable and environmentally conscious market.

“Initiatives like these illustrate the powerful role of regulatory frameworks in driving global change,” Ortiz adds. Through targeted support and collaborative efforts, the journey toward a greener and more sustainable future becomes not just a possibility, but a reality.

Learn more about Rebuild’s Technical Facility and apply for support.