In a move that has received as much criticism as it has praise, the European Parliament confirmed a one-year delay in implementing the European Union’s Deforestation-Free Products Regulation (EUDR). For coffee producers and exporters in Kenya, the decision comes as a double-edged sword, especially as a result, of the amendments introduced to ensure compliance.
The EUDR, originally set to take effect on December 30, 2024, aims to ensure that commodities including coffee, cattle, cocoa, oil palm, rubber, soya and wood imported into the EU are not cultivated on land that has been deforested after December 31, 2020.
The delay is as a result of pressure on the European Commission from a range of stakeholders who argued they would not be ready to meet the regulation’s requirements by the original deadline.
With the confirmed delay, medium and large-sized farms, traders, and roasters now have until December 30, 2025, to prove compliance with the EUDR while smaller companies have been granted an additional six months, extending their deadline to June 30, 2026.
This postponement offers a much-needed reprieve for Kenyan coffee traders who have been scrambling to adapt to the new requirements. Failure to comply would have closed access to the EU, which makes up a significant portion of Kenya’s top coffee markets.
The delay provides additional time for Kenyan coffee traders to prepare and organize their operations to meet the stringent traceability and due diligence requirements of the EUDR.
However, it also introduces a period of uncertainty in the market. For those who ensured to comply in time, it undermines their effort, by creating an uneven playing field, where they might be at a temporary disadvantage.
The parliament also approved a number of amendments including the the introduction of a “no-risk” category, to the three existing categories, in the EUDR’s risk bench-marking system. The new category is set to include countries that have stable or increasing forest area development. These countries are set to benefit from less stringent requirements as they are deemed to pose no threat of deforestation.
The EUDR serves as an opportunity to enhance Kenya’s coffee sector sustainability credentials. The regulation is expected to ultimately benefit Kenyan farmers by providing more direct market access and potentially better prices for their produce.
In fact, the delay coincided with a spike in coffee prices, with the ICO composite indicator price reaching over $270 cents per pound in mid-November 2024, its highest level since early October.
This price increase, will provide a short-term boost for Kenyan coffee exporters. And it comes at the right time. The implementation of the EUDR, even with the delay, will require significant investments in technology and systems to meet the traceability requirements.
Smaller traders and farmers, in particular, may face challenges in complying with these new regulations, potentially risking their access to the lucrative EU market.
To address these challenges, various stakeholders in the Kenyan coffee sector are mobilizing resources and support. Industry associations, government agencies, and international partners are working to develop capacity-building programs and technological solutions to help traders and farmers meet the EUDR requirements.
The Kenyan government is taking steps to support the coffee sector with initiatives, aimed at ensuring that Kenyan coffee can maintain and even expand its presence in the European market under the new regulatory regime.
Kenyan coffee traders who can successfully navigate these changes and meet the EUDR standards may find themselves in a stronger position to capitalize on the growing demand for sustainable sourced coffee in the European market. The challenge now is to turn this regulatory hurdle into an opportunity for enhancing the reputation and value of Kenyan coffee on the global stage.
