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Mathieu Lamolle (left), senior advisor on sustainability at the International Trade Center (ITC), spoke with STiR about the challenges the Regulation on Deforestation-free Products (EUDR) and Corporate Sustainability Due Diligence Directive (CSDDD) face, and possible solutions for a positive way forward. Photo credit: International Trade Center
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The EU Deforestation Regulations aim to reduce greenhouse gas emissions and biodiversity loss. Photo credit: Rainforest Alliance
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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 credit: ITC Deforestation-free Trade Gateway, 2025
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Susana Loaiza (above), Colombia’s coffee supply chain manager for the Sustainable Trade Initiative (IDH), states that projects in Colombia are already positively impacting 10,000 producers. Photo credit: IDH
The Regulation on Deforestation-free Products (EUDR) and the Corporate Sustainability Due Diligence Directive (CSDDD) are two policies part of a broader, ambitious, and groundbreaking set of 50 environmental, social, and governance (ESG) actions called the European Green Deal. According to Ursula von der Leyen, the European Commission president’s 2020 TED Talk, the goal is “to make Europe the first carbon neutral continent by 2050”, reduce deforestation, fight greenwashing, ensure corporate environmental, human, and labor rights accountability, and “transition towards a cleaner and healthier future.”
Designed to create a more responsible and sustainable global supply chain, the European Union’s (EU) regulatory framework is quickly reshaping industries expected to comply with an ever-increasing number of policies, temporarily increasing costs but aiming to guarantee their long-term sustainability. However, their implementation faces challenges, and the legislative processes are still subject to debates and revisions.
To understand these challenges and explore solutions developed by these organizations, STiR coffee and tea spoke with Mathieu Lamolle, a senior advisor on sustainability, and his teammates, Michaela Summerer, associate expert from the International Trade Center (ITC), and Susana Loaiza, Colombia’s coffee supply chain manager for the Sustainable Trade Initiative (IDH).
EUDR Postponement and Political Challenges
According to the European Commission overview, EUDR, which came into force on June 29, 2023, aims to “avoid that the listed products Europeans buy, use and consume contribute to deforestation and forest degradation in the EU and globally” and is expected to “bring down greenhouse gas emissions and biodiversity loss.”
EUDR aims to reduce Europe's contribution to deforestation by requiring companies importing certain commodities to prove those items were not produced from land deforested after December 31, 2020. Photo credit: Rainforest Alliance.
This regulation 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. According to an article published by Bloomberg, this regulation could affect more than $110 billion in annual trade across six continents.
EUDR was initially set to be enforceable from December 30, 2024; however, seven days before that date the EU published a regulation officially postponing the entry into application by one year, making it enforceable from December 30, 2025, for medium and large companies, and from June 30, 2026, for micro and small enterprises.
This delay stems from pressures exerted by various stakeholders, including international partners Brazil, China, the US, and Germany, among others, and economic sectors concerned about the regulation’s impact. Environmental organizations, such as Greenpeace and Mighty Earth, have criticized this postponement, viewing it as a concession to industry lobbies, especially amid ongoing environmental crises and climate shocks. Conversely, some European Parliament members and member states support the delay, arguing it allows more time to address international concerns and adapt to the economic implications of the regulation.
Bloomberg reported that in March 2025, some US lawmakers criticized the EU’s approach as hostile and intrusive, and threatening US jurisdiction. Meanwhile, the US Commerce Secretary, Howard W. Lutnick, said that the government is willing to consider “commercial tools” to retaliate.
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 assisting small and medium-sized enterprises (SMEs) in complying with regulations and maintaining access to markets.”
ITC offers workshops, like the one pictured above, held in Burundi last October, that guide SMEs through conflicting data sources and help them understand the technicalities of deforestation assessments. Photo credit: ITC
Lamolle and Summerer outline key implementation challenges, emphasizing the need to clarify EUDR’s scope and address misconceptions about producers’ and SMEs’ responsibilities. Compliance 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 record 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 legislations,” notes Lamolle.
Financial constraints remain a major hurdle, as small businesses often struggle to afford technology and documentation systems. Adding to this, discrepancies in geospatial mapping and deforestation records complicate compliance efforts. “Different sources of information may provide conflicting data, making it harder to verify deforestation-free supply chains,” Lamolle adds.
Lamolle and Summerer explain that one of the most prevalent challenges 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 products 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.
- Leveraging industry support networks, such as national industry associations, is vital for companies to facilitate compliance and share best practices.
- Investing in scalable traceability solutions is crucial to ensuring long-term feasibility.
- Participating actively 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 Deforestation-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 massive open online course (MOOC) that tackle misconceptions surrounding sustainability regulations, guiding SMEs through conflicting data sources and helping them understand the technicalities of deforestation 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 companies in scope identify and address adverse human rights and environmental impacts of their actions inside and outside Europe.” But on February 26, 2025, the European Commission proposed the Omnibus Directive, aiming to simplify requirements, limit the rules to companies with more than 1,000 employees and revenue over €50 million ($59 million), and eliminate corporate civil responsibility.
As a result, about 80% of companies originally covered by the directive are now exempt from conducting full due diligence on human rights, labor practices, and environmental impacts across their value chains. The initiative simplifies sustainability reporting and aligns existing requirements, but it eliminates civil responsibility and fines for non-compliance. Critics view this as prioritizing corporate interests over protecting people and nature.
While some stakeholders view this as a necessary step to reduce administrative burdens on businesses, others, including several companies such as Mars, Nestle, and Unilever, as well as nonprofits, caution that it may lead to deregulation and diminished corporate accountability. As the Corporate Justice Coalition, the largest civil society network in Europe, states in a press release, “the EU’s Omnibus proposal rewards corporate interests instead of protecting people and the planet.” This move is seen more as promoting deregulation than competitiveness.
CSDDD Implementation Challenges and Lessons
CSDDD declares that companies “should … be responsible for using their influence to contribute to an adequate standard of living in chains of activities. This is understood to include a living wage for employees and a living income for self-employed workers and smallholders, which they earn in return for their work and production.”
IDH works with big companies and civil organizations in collaborative Living Wage Income pilot projects in different countries and value chains to find answers, share lessons, and develop strategies based on experiences and data that can help stakeholders in the CSDDD compliance process. The organization thrives on the idea that collaborative work is the best way to find common solutions that have economic, social, and environmental impacts.
Loaiza shares that projects in Colombia already have an impact on 10,000 producers and that IDH is already working with cooperatives using the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct — a set of principles that define the responsibilities of businesses and states to protect human rights, to help them become active stakeholders for CSDDD. She also highlights that complying with due diligence means doing everything possible to identify, assess, and mitigate risks.
To tackle these challenges, IDH emphasizes collaborative solutions that foster sustainability and transparency. Their Income Driver Calculator provides businesses with a practical tool to assess and ensure fair wages throughout their supply chains, addressing social sustainability requirements under EUDR and CSDDD. Complementing this, “Grounds for Sharing,” a study of value distribution in the coffee industry, maps how value is shared across the supply chain — from farmers to exporters, highlighting disparities and promoting more equitable economic practices.
While not directly tied to deforestation monitoring, these tools reinforce broader ESG goals by supporting responsible sourcing. By engaging in these initiatives, businesses are better equipped to demonstrate compliance with EU regulations and strengthen the social dimension of their sustainability strategies.
Loaiza stressed, “Without a doubt, at the end of the day, sustainability will assure your supply chain,” advising stakeholders to view regulations as opportunities to improve value chains where many issues are interconnected.
Ultimately, these regulations present a valuable opportunity for stakeholders to find common solutions and deepen their understanding of complex value chains. Collaboration, knowledge-sharing, and proactive adaptation are key to ensuring both environmental sustainability and economic resilience.