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The EU Deforestation Regulation

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  • Christopher L. Gilbert

Abstract

The EU Deforestation Regulation (EUDR) will introduce stringent due diligence requirements on the sale of seven major agricultural commodities in the EU with the objective of limiting deforestation in the producing countries. The greatest impact is likely to be in cocoa and coffee where the EU, and Europe more widely, are responsible for a large share of world consumption; and possibly also in palm oil which has seen substantial deforestation. Commodity supply chains are complex. In particular, crops produced by smallholder farmers are aggregated into larger packets prior to export. Tracking the deforestation status of these aggregated packets will be a major and potentially costly undertaking. This will result in the restructuring of supply chains, favouring large farms over smallholdings and international trading companies over nationally‐based exporters. These developments are seen by some producing country governments as imperialistic. EUDR‐compliant supplies will earn a premium and this will raise the prices faced by European consumers. Producers who are able to comply will benefit from the premium but will bear the compliance cost. Overall, there will be a net pecuniary loss. Benefits to deforestation will only emerge as new planting takes place and will depend on whether other consuming countries introduce similar legislation. I estimate that, despite the reduction in deforestation embodied in EU imports, the overall impact on deforestation will be minor but with high associated compliance costs. Le règlement européen contre la déforestation (RUED) introduira des exigences strictes en matière de diligence raisonnable sur la vente de sept principaux produits agricoles dans l'Union européenne (UE), dans le but de limiter la déforestation dans les pays producteurs. L'impact le plus important concernera probablement le cacao et le café, où l'UE, et plus largement l'Europe, sont responsables d'une part importante de la consommation mondiale; et peut‐être aussi l'huile de palme, dont la production s'est accompagnée d'une déforestation importante. Les chaînes d'approvisionnement en matières premières sont complexes. En particulier, les récoltes produites par les petits exploitants agricoles sont regroupées en colis plus grands avant d’être exportées. Suivre le statut de ces colis agrégés en matière de déforestation sera une entreprise importante et potentiellement coûteuse. Cela entraînera une restructuration des chaînes d'approvisionnement, favorisant les grandes exploitations au détriment des petites exploitations et les sociétés de commerce international au détriment des exportateurs nationaux. Ces évolutions sont considérées par certains gouvernements de pays producteurs comme impérialistes. Les produits conformes au REUD bénéficieront d'une prime, ce qui fera augmenter les prix pour les consommateurs européens. Les producteurs en mesure de se conformer au règlement bénéficieront de la prime mais supporteront le coût de mise en conformité. Au total, il y aura une perte pécuniaire nette. Les avantages de la déforestation n'apparaîtront qu'au fur et à mesure que de nouvelles plantations auront lieu et dépendront de l'adoption ou non par d'autres pays consommateurs d'une législation similaire. J'estime que, malgré la réduction de la déforestation incorporée dans les importations de l'UE, l'impact global sur la déforestation sera mineur mais avec des coûts de mise en conformité associés élevés. Mit der EU‐Entwaldungsverordnung (EUDR) werden strenge Sorgfaltspflichten für den Verkauf von sieben wichtigen Agrarrohstoffen in der EU eingeführt. Hierdurch soll die Entwaldung in den Erzeugerländern eingedämmt werden. Die größten Auswirkungen werden wahrscheinlich bei Kakao und Kaffee zu verzeichnen sein, da die EU und Europa im weiteren Sinne für einen großen Teil des Weltverbrauchs verantwortlich sind. Das gilt möglicherweise auch bei Palmöl, für das in erheblichem Umfang Wälder abgeholzt wurden. Die Lieferketten von Rohstoffen sind komplex. Vor allem die von kleinen landwirtschaftlichen Betrieben erzeugten Produkte werden vor dem Export zu größeren Einheiten zusammengefasst. Die Verfolgung des Entwaldungsstatus dieser Einheiten ist ein großes und potenziell kostspieliges Unterfangen. Dies wird zu einer Umstrukturierung der Lieferketten führen, bei der größere Betriebe gegenüber kleineren und internationale Handelsunternehmen gegenüber nationalen Exporteuren bevorzugt werden. Diese Entwicklungen werden von einigen Regierungen der Erzeugerländer als imperialistisch empfunden. Für EUDR‐konforme Lieferungen wird ein Aufschlag gezahlt, was die Preise für die europäischen Verbraucher und Verbraucherinnen erhöhen wird. Die Betriebe, die in der Lage sind, die Vorschriften einzuhalten, werden von der Prämie profitieren, aber auch die Kosten für die Einhaltung der Vorschriften tragen. Insgesamt ergibt sich ein finanzieller Nettoverlust. Der Nutzen für die Entwaldung wird sich erst mit der Neuanpflanzung einstellen und davon abhängen, ob andere Länder ähnliche Rechtsvorschriften einführen. Ich schätze, dass die Auswirkungen auf die Entwaldung trotz der Verringerung der Entwaldung durch EU‐Importe gering sein werden, jedoch mit hohen Compliance‐Kosten verbunden sein werden.

Suggested Citation

  • Christopher L. Gilbert, 2024. "The EU Deforestation Regulation," EuroChoices, The Agricultural Economics Society, vol. 23(3), pages 64-70, December.
  • Handle: RePEc:bla:eurcho:v:23:y:2024:i:3:p:64-70
    DOI: 10.1111/1746-692X.12436
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    References listed on IDEAS

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    1. Bohman, Mary & Jarvis, Lovell, 1990. "The International Coffee Agreement: Economics of the Nonmember Market," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 17(1), pages 99-118.
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    4. Durevall, Dick, 2007. "Demand for coffee in Sweden: The role of prices, preferences and market power," Food Policy, Elsevier, vol. 32(5-6), pages 566-584.
    5. Christopher L. Gilbert, 2024. "Cocoa: Origin Differentials and the Living Income Differential," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(4), pages 777-802, August.
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    1. Valenciano-Salazar, Jorge A. & André, Francisco J. & Soliño, Mario, 2025. "Pro-environmental behavior in Costa Rica: A case study on price premiums for coffee certification," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 34(2), pages 1-18.
    2. de la Vega, Pablo, 2026. "The European Union deforestation regulation: The impact on Argentina," Ecological Economics, Elsevier, vol. 240(C).
    3. McDermott, Constance L. & Addoah, Thomas & Agyarko-Kwarteng, Tawiah & Asare, Rebecca & Assanvo, Alex & Lima, Mairon Bastos & Bellfield, Helen & Berlan, Amanda & Carodenuto, Sophia & Gardner, Toby & Ga, 2025. "Equity in unilateral value chain policies: A monitoring framework for the EUDR and beyond," Forest Policy and Economics, Elsevier, vol. 174(C).
    4. Van Hee Jens & Krumbiegel Katharina & Tillie Pascal, 2025. "Intermediaries in the West-African cocoa sector: a buyer and producer perspective," JRC Working Papers on Economic Analysis of Policies for Africa 2025-11-1, Joint Research Centre.

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