STiR coffee and tea magazine

40 STiR coffee and tea | 2025 Quarter 2 Summer (Jun/jul/Aug) By Emilio J. Bonnet T Europe's ESG Regulations Face Turbulent Times he Regulation on Deforestation-free Products (EUDR), and the Cor- porate Sustainability Due Diligence Directive (CSDDD) are two poli- cies part of a broader, ambitious, and groundbreaking set of 50 envi- ronmental, social, and governance ESG actions called the European Green Deal. According to Ursula von der Leyen, the EU Commission president's 2020 TED Talk, the goal is "to make the EU the first carbon neutral conti- nent by 2050", reduce deforestation, fight greenwashing, ensure corporate en- vironmental, human, and labor rights accountability and "transition towards a cleaner and healthier future." Designed to create a more responsible and sustainable global supply chain, the European Union's regulatory framework is quickly reshaping industries expected to comply with an ever-increasing number of policies, temporarily increasing costs but aiming to guarantee their long-term sustainability. How- ever, their implementation faces challenges, and the legislative processes are still subject to debates and revisions. To understand these challenges and explore solutions developed by these organizations, STiR spoke with Mathieu Lamolle, a senior advisor on sustain- ability, and his teammates, Michaela Summerer, associate expert from the In- ternational Trade Center (ITC), and Susana Loaiza, Colombia's coffee supply chain manager for IDH. EUDR Postponement and Political Challenges According to the European Commission overview, EUDR, which came into force on June 29, 2023, aims to "avoid that the listed products Europeans buy, use and consume contribute to deforestation and forest degradation in the EU and globally" and is expected to "bring down greenhouse gas emis- sions and biodiversity loss." This regulation mandates that commodities from seven value chains— coffee, cocoa, soy, palm oil, beef, rubber, and timber—entering the EU mar- ket must be traced and verified as deforestation-free as well as produced in compliance with the relevant laws of their country of origin, or companies risk facing fines of 5% of their annual income. Ac- cording to an article published by Bloomberg, this regulation could affect more than approximately $110 billion in annual trade across six continents. EUDR was initially set to be enforceable from December 30, 2024; however, seven days before that date the EU published a regulation officially postponing the entry into application by one year, making it enforceable from December 30, 2025, for medium and large companies, and from June 30, 2026, for micro and small enterprises. This delay stems from pressures exerted by various stakeholders, including international part- ners Brazil, China, the US, and Germany, among others, and economic sectors concerned about the regulation's impact. Environmental organizations, such as Greenpeace and Mighty Earth, have criti- cized this postponement, viewing it as a concession to industry lobbies, especially amid ongoing envi- ronmental crises and climate shocks. Conversely, some European Parliament members and member states support the delay, arguing it allows more time to address international concerns and adapt to the economic implications of the regulation. Bloomberg reported that in March 2025, some US lawmakers criticized the EU's approach as hostile and intrusive, and threatening US jurisdic- tion. Meanwhile, the US Commerce Secretary, Howard W. Lutnick said that the government is willing to consider "commercial tools" to retaliate. Mathieu Lamolle (left), senior advisor on sustainability at the International Trade Centre (ITC), spoke with STiR about the challenges the Regulation on Deforesta- tion-free Products (EUDR) and Corporate Sustainability Due Diligence Directive (CSDDD) face, and possible solutions for a positive way forward. Photo courtesy ITC The EU Deforestation Regulations aim to reduce greenhouse gas emissions and biodiversity loss. Photo courtesy Rainforest Alliance

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