STiR coffee and tea magazine

STiR coffee and tea 41 EUDR Social and Technical Challenges and Lessons "As the joint agency of the United Nations and the World Trade Organization, ITC's goal is to help demystify sustainability challenges in global value chains," Lamolle explains. "This includes assist- ing small and medium-sized enterprises (SMEs) in complying with regulations and maintaining access to markets." Lamolle and Summerer outline key implemen- tation challenges, emphasizing the need to clarify EUDR's scope and address misconceptions about producers' and SMEs' responsibilities. Compli- ance has revealed unexpected obstacles but also valuable lessons for businesses. One of the primary hurdles is data collection and verification, as many smallholders lack the necessary tools and knowledge to accurately re- cord geolocation data and ensure legal compliance. "Many smallholders lack the tools and knowledge to collect required data, such as geolocation of plots of land where the products are coming from and proof of compliance with national legisla- tions," notes Lamolle. Financial constraints remain a major hurdle, as small businesses often struggle to afford technol- ogy and documentation systems. Adding to this, discrepancies in geospatial mapping and defor- estation records complicate compliance efforts. "Different sources of information may provide conflicting data, making it harder to verify defor- estation-free supply chains," Lamolle adds. Lamolle and Summerer explain that one of the most prevalent challeng- es has been the complexity of mapping entire value chains, which involves tracing suppliers at multiple tiers and ensuring that mixed commodity supply chains meet compliance requirements. There is also widespread confusion regarding product classification, with businesses unsure whether certain prod- ucts fall under EUDR's scope. This issue is compounded by misinformation from non-expert organizations, contributing to uncertainty among producers and exporters. Lamolle highlighted this challenge, stating, "Another area of common confusion among supply chain actors is also about what happens with the mixed commodity supply chains. What are my compliance obligations?" From these challenges, several critical lessons have emerged: ● Clarifying regulatory scope early is essential to help businesses avoid unnecessary compliance efforts and reduce confusion. ● Companies must also leverage industry support networks, such as na- tional industry associations, to facilitate compliance and share best practices. ● Investing in scalable traceability solutions is crucial to ensuring long- term feasibility. ● Active participation in policy dialogues allows businesses to stay ahead of regulatory changes and benefit from shared industry insights. ● Most importantly, compliance is a shared responsibility—rather than falling solely on producers, stakeholders must collaborate to develop practical solutions that ensure sustainable and inclusive supply chains. To address data collection and verification challenges, ITC offers the De- forestation-Free Trade Gateway (DFTG), a digital platform designed to help supply chain actors compile information about the origin of products and run analyses of risks associated with deforestation. Additionally, ITC provides step-by-step handbooks, workshops, and a MOOC that tackle misconcep- tions surrounding sustainability regulations, guiding SMEs through conflict- ing data sources and helping them understand the technicalities of deforesta- tion assessments. The CSDDD Imminent Downgrading According to the European Commission, CSDDD, which came into force on July 25, 2024, seeks "to foster sustainable and responsible corporate behavior in companies' operations and across their global value chains…ensure that com- panies in scope identify and address adverse human rights and environmental impacts of their actions inside and outside Europe." But on February 26, 2025, the EU commission proposed the Omnibus Directive, aiming to simplify re- quirements, limit the rules to companies with more than 1,000 employees and revenue over 50 million euros, and eliminate corporate civil responsibility. EUDR mandates that commodities from seven value chains—coffee, cocoa, soy, palm oil, beef, rubber, and timber—entering the EU market 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. Photo courtesy Rainforest Alliance The ITC's Deforestation-Free Trade Gateway (DFTG) is a digital platform designed to help SMEs gather the necessary data for compliance, such as drone mapping. Photo courtesy ITC Deforestation-free Trade Gateway, 2025

• Cover