Alarm bells ring over EUDR as chocolate companies urge urgent action from EC on implementation

An influential group of companies and organisations in the cocoa industry has called for the European Commission (EC) to use its full powers enshrined in the European Union Deforestation Regulation (EUDR) to create a special ‘Standing Committee’ to enable “urgently needed coordination and technical discussion” between the EC and operators to “ensure its timely and effective implementation by 30 December 2024.”

Mars, Ferrero, Nestlé, and Tony’s Chocolonely, along with independent watchdog Voice Network and Fairtrade Advocacy Office, signed a joint paper urging the EC to establish a robust coordination mechanism while making clear that the signatories support the new law.

The paper states that one of the first tasks of a proposed EUDR Standing Committee would be to support the provision of guidance and clarifications to member states and companies on how to prepare for EUDR compliance by December 30, 2024, including the use of the Information System.

As seen by CocoaRadar and sent to Brussels last week, the paper states that companies currently need more information and certainty on respecting specific key administrative requirements of the EUDR.

Stress-testing shows limitations of system

Alarm bells are ringing after stress-testing the Deforestation Information System (DIS), used by operators of various commodities to upload their due diligence data, which has ‘shown limitations in terms of content and speed of the Multi-Stakeholder Platform to tackle such operational issues.’

CocoaRadar understands that Barry Callebaut and Cargill were companies testing DIS for the chocolate industry. Ferrero said it was not part of the pilot testing, and a spokesperson said: “Ferrero supports legal frameworks to address deforestation linked to key ingredients as part of a smart mix of measures to achieve positive systemic impact in supply chains. 

“In particular, Ferrero is in favour of the EU Regulation on deforestation-free supply chains and its implementation as it constitutes a harmonised framework to provide actors in the value chain with legal certainty and guidance on traceability and accountability requirements while guaranteeing a level playing field based on adequate due diligence requirements. As per the approved law, we are currently working towards compliance on 1 January, 2025”

Further guidance and clarification is needed

The paper states that one of the first tasks of a proposed EUDR Standing Committee would be to support the provision of guidance and clarifications to member states and companies on how to prepare for EUDR compliance by December 30, 2024, including the use of the Information System.

As reported by CocoaRadar last week, the EC published The Deforestation Due Diligence Registry. This registry allows operators, traders, and their representatives to make due diligence statements in electronic formats and submit them to the relevant authorities to show that their products do not cause deforestation and comply with regulations.

Registration to use the system will begin in November 2024 and will be open to all users in December 2024.

Still, the joint paper recommends practical solutions to ongoing operational issues related to EUDR compliance, including specialised sections such as Due Diligence Obligations and Traceability, Information System and Data Management, Smallholder Integration and Capacity Building, and Legal Interpretation and Compliance. The paper also recommends that the Committee organise regular meetings with agendas and short reports made publicly available as soon as possible after the meeting date.

A robust policy of stakeholder engagement

The paper also suggests a robust policy of stakeholder engagement, with representatives from the private sector, NGOs, smallholder organisations, and producing countries invited on a structural basis to provide input and feedback. “This would ensure a comprehensive understanding of supply chain challenges and the impact of the EUDR on stakeholders,” it claims.

The committee should have the authority to propose EUDR implementation guidelines to the Commission, ensuring a consistent and practical approach across the EU. It should also monitor the implementation of the EUDR and make necessary adjustments to ensure its effectiveness and alignment with global standards and best practices.

Although there are concerns with the implementation, the signatories state they are committed to the EUDR, urging the EC not to delay the bill. They say, “We believe that the EUDR represents an important step forward in driving the necessary transformation of the cocoa and chocolate sector by helping to minimise the risk of deforestation associated with cocoa and chocolate products placed on the EU market.”

A spokesperson from the EC declined to comment on the paper and its recommendations.

A spokesperson for Nestlé told CocoaRadar: “Thanks to our long-standing work in avoiding deforestation, we are confident that we will be able to comply with this regulation. However, more clarity is needed on some remaining practical aspects, including how individual EU member states plan to implement the proposed law.”

Tony's Chocolonely supports and welcomes the EUDR, and via our Tony’s Open Chain cocoa sourcing model we already enable deforestation-free cocoa for all farms in our entire supply chain.

Belinda Borck, global public policy co-ordinator at Tony’s Chocolonely, added: "We believe fundamental industry change is possible and recognise the EUDR as a critical step for minimising deforestation linked to cocoa production.

"As a step towards timely and just implementation, we urge the EU to assess and support smallholder farmers, considering their specific challenges and needs, as well as ensuring comprehensive stakeholder engagement in the risk assessment process.”