European Union Deforestation Regulation

Reference

There has been an increase in demand for Indian coffee in European countries ahead of the commencement of compliance deadline for the recently proposed European Union Deforestation Regulation (EUDR) norms.

About the EU Deforestation Regulation

• In December 2022, the European Union and its member states signed the EUDR agreement to take measures to prevent deforestation and forest degradation caused by imported products.
• The aim of the EUDR is to minimise the import of products linked to deforestation.
• EU members are mandated to comply with the requirements of the EUDR norms from 30 December 2024.

Key Criteria

• The EUDR obliges producers and manufacturers to certify their products as environmentally friendly and sustainable, i.e. during the process of production, manufacturing or distribution, the product has not resulted in deforestation practices.
• Importers are required to provide geolocation data of production areas to ensure traceability.
  • This data helps verify compliance with deforestation-free requirements.
  • Traceability also provides a transparent way to verify the authenticity of products, reducing the number of counterfeit products entering the market.

Major Product Categories

• Currently, the regulation targets seven product categories, mainly applying to agricultural products.
  • The products included in the list are: animal products (including meat), cocoa, palm oil, soya, rubber, wood, coffee.
• These seven products have contributed largely to environmental degradation due to their widespread use and market demand.

Coffee Production in India

• India is the seventh largest producer of coffee and also the fifth largest exporter after Brazil, Vietnam, Colombia and Indonesia.
• More than two-thirds of the coffee grown in India is exported.
• Nearly 60% of Indian coffee exports go to Europe, where Italy, Germany and Belgium are the major buyers of the commodity.

India's coffee exports rise

• With the introduction of the EUDR, advance buying of coffee is increasing significantly, as European consumers are making purchases ahead of the deadline.
  • India's coffee shipments grew 16% to over 2.37 lakh tonnes during the January 1 to June 21 period this year, as against 2.04 lakh tonnes in the same period a year ago.
• Shipments of coffee grown in India witnessed a growth of 15% during the period to over 1.83 lakh tonnes from 1.59 lakh tonnes a year ago.