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A Guide to the European Deforestation Regulation
A Guide to the European Deforestation Regulation
Cacao farming is one of the leading causes of deforestation worldwide, impacting the environment, contributing to global warming, and promoting an unsustainable ‘slash and burn’ culture among farmers.
In an effort to put a stop to these damaging practices and create a more sustainable and ethical supply chain, the European Commission has put in place a new rule against deforestation and forest degradation caused by agricultural farming. Read on to find out what impact the new regulation will have on the chocolate industry.
What is deforestation?
Deforestation simply means cutting down trees with the purpose of converting the land to non-forest use. The biggest cause is unsustainable and illegal agriculture, and cacao farming is one of the worst culprits.
Forest degradation is the deterioration of a forest area, often caused by illegal logging, but also climate change and weather phenomena, resulting in forest fires, pest infestation and disease. The impact of forest degradation is the loss of habitats and an increase in air pollution.
Deforestation is not always illegal, but the negative impact all types of deforestation and forest degradation have on the environment has prompted the European Commission to implement a new set of rules called the EUDR to mitigate – and eventually eradicate – the damage.
What is the EUDR?
The European Deforestation Regulation (EUDR) comes into effect on 30th December 2026 (updated November 2026). After two delays, the European Commission has confirmed that it won’t reopen the regulation, so the dates now hold: large and medium-sized businesses must comply from 30th December 2026, and micro and small businesses from 30th June 2027.
The new regulation requires businesses to:
- Remove deforestation and forest degradation from their supply chain;
- Comply with local social and environmental laws in the country of production;
- Implement traceability, risk assessments and contingency planning; and
- Produce a ‘Due Diligence Statement’.
Products also have to meet the laws of the country where they’re grown, including land rights, labour rights and human rights. EU countries set their own penalties, but the maximum fine must be at least 4% of a business’s total annual EU turnover, and authorities can also confiscate goods and ban businesses from public contracts.
The regulation puts the main responsibility on the business that first brings a product onto the EU market. That business submits the Due Diligence Statement and gets a reference number for it. Businesses further down the supply chain don’t file their own statement. They keep that reference number for five years and must show it to authorities if asked.
You can find the latest dates and guidance on the European Commission’s EUDR page.
What impact does EUDR have on the price of cocoa?
If you’ve been working with chocolate for a while, you’ll have noticed big swings in cocoa prices over the last few years, with record highs in 2024 and early 2025 before they eased back. There are a number of reasons for this, including climate change impacting yields, as well as increasing costs for resources required to grow, transport and produce the cocoa.
The EUDR legislation may also be partly responsible for rising prices, as cocoa farmers and chocolate manufacturers have a lot of work to do to become compliant with the new rules.
Improving traceability and producing detailed reports to evidence compliance involves new procedures, and even expensive new technologies. Add to this the concern that any non-compliant chocolate or cocoa currently in bond may need to be removed from Europe or disposed of, impacting supply, and it is clear to see why the cost of cocoa could continue to rise.
More about the EUDR
The new regulation applies to goods produced on or after 29th June 2023, made from or using commodities produced on land that has been deforested, legally or illegally, since 31st December 2020. This includes derived products, such as:
- Meat products
- Chocolate
- Coffee
- Palm nuts
- Palm oil derivatives
- Glycerol
- Natural rubber products
- Soybeans, soy-bean flour and oil
- Fuel wood
- Wood products
- Pulp and paper
From 30th December 2027, the list also grows to include soluble (instant) coffee and some palm oil derivatives.
Coffee and cocoa were a particular worry because they can sit in bonded warehouses for months before clearing customs. The Commission has since cleared this up. Goods brought onto the EU market before 30th December 2026 don’t need a Due Diligence Statement, as long as the business can prove when it brought them in (usually with the customs declaration). Cocoa grown before 29th June 2023 is outside the regulation altogether. Anything brought onto the market from 30th December 2026 onwards is fully covered.
The cocoa futures market is changing too. From 30th December 2026, ICE Futures Europe will only accept cocoa for delivery against its London contract if it comes with verified due diligence information. Older stock without it will trade at a discount until the end of 2027.
Does the EUDR apply in the UK?
The EUDR is EU law, so it doesn’t apply to buying and selling chocolate within Great Britain. It does matter if you sell into the EU, including the Republic of Ireland. In that case, the business that brings the product into the EU becomes responsible for the due diligence. The UK is also working on its own forest risk commodities law under the Environment Act 2021, covering cocoa, palm oil, soy and cattle products, but it isn’t in force yet.
How can I make sure the chocolate I use complies with EUDR?
At Keylink, we’re working with our suppliers to ensure all of the chocolate products that we offer will be compliant by the required date. It’s our aim to give you peace of mind and reassurance that the chocolate ingredients you buy from us are ethical, sustainable and comply with all necessary regulations. We’re proud to work with a fantastic roster of chocolate product manufacturers who are already operating under the requirements of the EUDR, including Callebaut, Favorich & Schokinag, Cargill, Luker and Plamil.
Chocolate that bears the mark of the Rainforest Alliance, Cocoa Horizons or Fairtrade does not automatically guarantee compliance, but allows chocolate manufacturers to benefit from the traceability and tools offered by these organisations, making compliance much simpler.
Around 70% of the world’s cocoa comes from Ghana and Ivory Coast, where deforestation and child labour are widespread. Fortunately, there is a better way, read our guide An Introduction to Cacao Agroforestry to discover the benefits of sustainable agroforests over monocultures, and why ethics and sustainability in cocoa production are so important.
If you’re concerned about ensuring your chocolate and other ingredients comply with the EUDR, give us a call and we’ll be happy to reassure you, or discuss possible alternatives to your current ingredients.
