Navigating the EU Deforestation Regulation (EUDR): Challenges and Strategies for the Coffee Industry

The new EU Regulation EUDR, in effect since June 2023, presents major challenges for the coffee industry. Companies must prove that their products are produced without deforestation. Smallholder farmers are especially affected, as they often lack the necessary technology or resources. German importers must fully document their supply chains, including the geocoordinates of cultivation areas. Deadlines are clear: large companies by the end of 2025, small businesses by mid-2026. Despite the costs, the EUDR offers opportunities: it can reduce CO₂ emissions and promote sustainable practices. However, implementation requires collaboration, technical solutions, and clear processes. Learn more about the EUDR regulation and its impact. For a comprehensive overview of the regulation, see the official EU Deforestation Regulation page.

EUDR Compliance Requirements

Requirements for Coffee Producers and Buyers

The EUDR requires all parties to ensure that their production is deforestation-free. Companies must prove that their coffee imports do not come from areas that have been deforested or contributed to forest degradation. Only products that meet these criteria may enter the EU market. For a detailed breakdown of these requirements, refer to International Coffee Organization's EUDR briefing.

A key aspect of the requirements is geolocation. Companies are obligated to collect and provide the geographical coordinates of cultivation areas. For small plots under 4 hectares, point coordinates are sufficient, while larger areas require polygon boundaries. This traceability is intended to ensure that cultivation areas are not linked to deforestation. Detailed information on EUDR compliance and geolocation requirements. For further context, see Trusty's analysis of EUDR traceability and Coffee Trading Academy's EUDR impact report.

The due diligence obligation goes beyond geolocation. Coffee imports must also comply with local laws, including regulations on land ownership and human rights. Companies must therefore document farm boundaries, collect monitoring data, and provide evidence of compliance with the requirements. The European Commission provides a guidance document for operators to clarify due diligence steps.

A particular challenge is the situation for smallholder farmers, who account for about 60% of global coffee production on plots of less than 0.5 hectares. These farms often need technical support to collect the required data. Implementing these requirements demands precise documentation standards, which will be explained in the next section. For more on challenges faced by smallholders, see Trusty: EUDR's impact on smallholder farmers.

Deadlines and Documentation Standards

To ensure traceability, the EUDR requires that all collected data be retained for at least five years.

The due diligence statement must contain comprehensive information, including product descriptions, quantities, origin details, harvest dates, geolocations, and supplier information. These statements are submitted via the EU information system. For more on due diligence, see EUDR compliance requirements.

A country benchmarking system classifies countries into three risk categories, which affects the scope of due diligence depending on the risk level. Companies must conduct risk assessments to evaluate the risk of deforestation, legal compliance, and conditions in the country of origin. Learn more about country risk categorization under EUDR and see the Euractiv report on EUDR benchmarking.

Violations of the requirements can result in significant consequences, including fines of up to 4% of annual turnover. The EY summary of EUDR penalties provides further details.

Challenges for German Importers and Traders

German coffee importers and traders face specific challenges in implementing the EUDR requirements. A large proportion of imports are not secured by certified systems, and many supply chains are considered problematic. According to Reuters, the complexity of supply chains and lack of certification pose significant hurdles.

Complex supply chains further exacerbate the situation. Coffee is produced in over 60 countries by 12.5 million farms, of which 84% cultivate less than two hectares. German companies must map their entire supply chain and collect precise geolocation data. The ICO briefing provides a global overview.

An example of a proactive approach is Volcafe, which uses the platform Meridia Verify to meet EUDR requirements. The goal is to create transparency for coffee farmers and make the work of field teams easier. Such approaches show how technological solutions can be used effectively. For more on digital traceability, see FoodNavigator: Coffee traceability and EUDR.

However, administrative requirements are high. Companies must implement digital traceability platforms, develop supplier engagement programs, and establish continuous monitoring systems. It is crucial that the data provided is accurate—regardless of the length or complexity of the supply chain.

German companies can benefit from EU support programs and international organizations that provide assistance in complying with the EUDR. Investments in user-friendly digital tools with integrated verification and validation functions can help improve data accuracy. The next section presents concrete strategies for successfully implementing these requirements. For a list of support resources, see ICO's EUDR support guide.

Challenges and Risks for Coffee Companies

The implementation of the EUDR brings numerous technical, economic, and operational hurdles for coffee companies. Smallholder and medium-sized enterprises are particularly affected, as they often lack the necessary technical equipment or clear land ownership documents. Below, we take a closer look at the various challenges.

Problems with Traceability and Data Collection

Smallholder farmers, who make up a large part of global coffee production, face significant technical difficulties. In many remote growing regions, basic resources such as stable internet connections or access to smartphones are lacking. For more on challenges faced by smallholder farmers, see EUDR's impact on smallholder farmers.

Katrien Delaet of EFICO describes the situation as follows:

"Farmers in developing countries are now suddenly expected to have smartphones and become tech-savvy enough to map their coffee growing areas and interpret satellite imagery"

Data accuracy is also a major challenge. Pauline Vandeputte, Value Chain Expert at EFICO, explains:

"In many African countries, farmers frequently rely on informal methods, such as memory or handwritten notebooks, to manage their business data"

These traditional approaches do not meet the requirements of the EUDR. In addition, unclear land ownership in many developing countries makes the required documentation more difficult. Without formal proof of ownership, it is nearly impossible for many farmers to comply with the EUDR requirements. FoodNavigator explores these traceability challenges.

Another sticking point is the high cost of introducing and operating traceability systems. While large companies can afford these investments, smaller producers often lack the financial means for digital infrastructure and training. The ICO report details these cost barriers.

Economic and Market Risks

In addition to technical challenges, the economic risks for coffee producers are significant. Non-compliant operations risk being excluded from the EU market. Since the EU accounts for about 20% of global coffee imports, this could mean massive revenue losses. The economic impact of EUDR on coffee markets is discussed in EUDR's economic implications and Reuters: EUDR and coffee supply chain risks.

Eileen Gordon-Laity, Secretary General of the European Coffee Federation, emphasizes:

"Understanding and adhering to the EUDR requires a meticulous approach. Operators will need to thoroughly collect the required information and carry out a sound risk assessment that takes into consideration country risk levels, proximity to forests, presence of Indigenous peoples, prevalence of deforestation, and supply chain complexity"

Surveying farm boundaries is another costly aspect. Around 6 million smallholder farms must have their boundaries documented to continue exporting to the EU. This measure brings significant financial burdens that many producers cannot bear.

Moreover, EUDR-related supply bottlenecks and price increases could occur if a large portion of production no longer meets EU requirements. This would have far-reaching consequences for the 25 million families who depend on coffee production, with women making up to 70% of the labor force on plantations. For a global perspective, see ICO's EUDR impact report.

Operational Challenges

Harmonizing supply chain practices is another major challenge. Different stakeholders—from smallholders and intermediaries to international corporations—must adapt their processes to the uniform standards of the EUDR.

An unresolved problem remains data interoperability between different systems and platforms. At the same time, unclear regulations and tight deadlines exacerbate the situation. This leads to inefficient parallel systems and increased administrative costs. FoodNavigator discusses these operational hurdles.

Regular monitoring and audits also tie up resources that medium-sized companies in particular often cannot spare. They must train their teams and introduce new compliance processes, which means additional effort.

A positive example is Vietnam, where ten coffee companies in the Central Highlands are participating in three EUDR pilot projects by IDH (Sustainable Trade Initiative). With government support, these projects aim to analyze compliance costs for certified and non-certified farmers and accelerate the development of a national database. See IDH's EUDR pilot in Vietnam for more.

These challenges show how important it is to develop effective strategies for EUDR compliance early on. The next section presents possible solutions.

EUDR Compliance Strategies

German coffee companies can meet the EUDR requirements through a smart combination of technology and close collaboration with their suppliers. These approaches are designed to effectively address challenges in traceability and data quality.

Building Traceability Systems

The first step is to establish reliable traceability systems. Companies must document their entire supply chain down to the origin farms—including the GPS coordinates of each farm. Digital platforms not only capture this data but also the land use history. They enable the automated creation of EUDR-compliant due diligence statements and offer real-time dashboards to monitor risks and audit status. For an overview of digital solutions, see TraceX: EUDR compliance for coffee.

Implementation requires a structured approach. Companies should first check whether their suppliers meet the standards for deforestation-free practices. At the same time, it is important to introduce land use monitoring systems in sourcing regions to identify risks such as deforestation or illegal practices early on. The goal is to trace every coffee bean back to its origin—a task that requires detailed documentation and sound analysis.

Collaboration with Suppliers

A crucial factor for successful EUDR implementation is close and trusting collaboration with suppliers. Jeffrey Bernstein, Managing Director at RGC Coffee, puts it succinctly:

"It's important to talk to partners and people in the industry; connect with people, learn. Education is key in these unchartered territories."

German companies should actively involve their suppliers by providing easy-to-understand guides, mobile apps, and targeted training. Smallholder farmers in particular need support to use digital technologies and understand EUDR requirements. Standardized assessment protocols also help to consistently evaluate risks and promote sustainable practices in the supply chain. For best practices, see Sustainable Coffee Challenge: EUDR compliance.

Use of Technological Solutions

In addition to working with suppliers, technological innovations play a central role in EUDR compliance. Technologies such as geospatial mapping, blockchain, and AI-powered tools enable seamless supply chain monitoring—from documenting land use to real-time risk analysis. Automated dashboards consolidate all compliance-relevant data in one place. For more on technology in EUDR, see Koltiva: EUDR compliance for coffee.

Some examples of such technologies are TraceX and Koltiva. TraceX offers a platform that digitizes the entire coffee supply chain. It records the geolocations of farms, documents land use history, and ensures traceability down to batch level. The platform also automates the creation of EUDR-compliant reports and identifies high-risk suppliers using satellite data.

Koltiva offers a comprehensive suite of solutions, including digital traceability, batch mapping, geospatial risk assessments, and automated reporting. Meg Philips, Head of Knowledge Management at Koltiva, explains:

"The revisions make EUDR compliance more workable - particularly for SMEs and businesses managing complex import-export flows. At the same time, streamlining isn't a free pass: bundling volumes into fewer DDSs shifts more liability onto the operator if anything slips through. Robust traceability and tight volume tracking remain essential so the simplifications don't backfire."

These technologies are especially valuable for German importers, who bring around 150,000 20-foot containers of green coffee into the EU every year. For a comparison of digital tools, see FoodNavigator.

Case Studies: Examples of EUDR Implementation

The introduction of the EUDR is already producing early success stories. German and international coffee companies have found ways to meet the complex traceability requirements while making progress in sustainability. Here are some practical examples that illustrate these strategies.

Producers Rely on Traceability Technology

An outstanding example is the transformation of the Araku Valley coffee supply chain. In collaboration with TechnoServe and TraceX, 3,500 smallholder farmers were equipped with digital traceability solutions. This project has created transparency and made it easier for farmers to access new markets. For more, see TraceX: Araku Valley case study.

The benefits of modern technologies become especially clear when compared to traditional methods. An analysis shows how satellite-based solutions increase efficiency:

These figures illustrate why Eileen Gordon-Laity, Secretary General of the European Coffee Federation (ECF), states:

"The EUDR requires comprehensive traceability measures to track the journey of coffee from farm to consumer."

These efficiency gains pave the way for proactive compliance with the regulations. See ICO's EUDR case studies for more examples.

German Companies as Compliance Pioneers

German coffee importers recognized early on that implementing the EUDR also offers strategic opportunities. One example is the Neumann Kaffee Gruppe (NKG), which already announced in June 2025 that it would implement EUDR-compliant coffee imports as quickly as possible—despite the one-year delay in EU implementation.

NKG works with osapiens to unify data and develop clear protocols for suppliers and customers. Existing programs such as NKG Verified and NKG Bloom already meet many EUDR requirements. With over 300 employees in sustainability and the SCIP program, NKG creates comprehensive deforestation analyses based on public data. See NKG's EUDR compliance announcement.

EFICO also pursues a forward-looking approach. Since December 2024, the company has been closely monitoring EUDR developments and offering targeted support to partners. This includes accepting risk assessments from other service providers to avoid duplication and unnecessary costs. EFICO's EUDR support provides more detail.

ESG and Climate Results

Consistent implementation of these strategies leads not only to efficiency gains but also to measurable results in the areas of environment, social, and governance (ESG). The EUDR aims to reduce the CO₂ emissions caused by the consumption and production of relevant raw materials in the EU by at least 32 million tons per year. For more on ESG and sustainability, see OECD's work on deforestation and sustainability.

The Neumann Kaffee Gruppe demonstrates how EUDR requirements can be implemented in a scalable, technology-driven model. By combining traceability, risk analysis, and due diligence processes, NKG proves that compliance and business success are not mutually exclusive.

In addition, sustainable cultivation methods supported by the EUDR promote the protection of native flora and fauna and reduce the use of harmful fertilizers and pesticides. Practices such as agroforestry and shade-grown coffee help preserve natural habitats and reduce environmental impact. For more on sustainable coffee, see Rainforest Alliance: EUDR and sustainable coffee.

The Future of Coffee Supply Chains Under the EUDR

The EUDR is fundamentally changing global coffee supply chains—from mere legal compliance to a long-term focus on sustainability. While successful strategies and proven approaches are showing the way, the focus is increasingly shifting to the challenges ahead. German companies in particular are faced with the task of fundamentally rethinking their approaches.

Key Takeaways for German Companies

German coffee importers and traders face a clear choice: adapt or fall behind. Etelle Higonnet, founder of Coffee Watch, sums up the situation:

"Coffee consumption in the EU has long carried within it a dark secret of embedded deforestation. Many coffee companies have been complicit in vast quantities of forest destruction and rights abuses for decades. In 2025, they must wake up, smell the deforestation, and fix it."

The urgency is underscored by well-known deforestation figures. Germany, as Europe’s largest importer of organic green coffee with 58,000 tons in 2023, bears a special responsibility. Statista: Organic coffee imports by country.

Interestingly, EUDR compliance costs large EU coffee companies only 0.03–0.07% of annual turnover. The impact on the final consumer price is just 0.018%. Given penalties of up to 4% of annual turnover, investing in EUDR-compliant systems is not only sensible but also economically smart. See ICO's cost analysis.

Sustainability as the Key to Success

The technological and partnership-based measures described above can now be turned into real competitive advantages. The EUDR elevates sustainability to a new level, making it a strategic differentiator. Auret Van Heerden, co-founder of Ripple Research, puts it this way:

"The EUDR benefits all value chain actors by providing the traceability, visibility, and data they need to identify and manage the social and environmental risks they face."

German companies can benefit from several trends: demand for specialty and gourmet coffees, sustainable sourcing practices, and premium and single-origin varieties is rising. With a global market share of 34.1%, Europe leads the coffee market, and Germany dominates with 44% of organic green coffee imports within Europe. CBI: Coffee trade statistics.

Investing in full traceability along the supply chain not only ensures compliance but also builds trust with environmentally conscious consumers. By using modern technologies and direct partnerships with producers, companies can both meet EUDR requirements and establish long-term, stable supply relationships. For more on consumer trends, see Mordor Intelligence: Europe coffee market.

Support from Fiegenbaum Solutions

Implementing the EUDR brings many challenges that require specialized expertise in ESG strategies, regulatory compliance, and climate risk management. Fiegenbaum Solutions offers targeted support to leverage the EUDR as an opportunity for sustainable growth.

With tailored lifecycle assessments (LCA), companies can precisely analyze their environmental impact and identify areas for improvement. The development of net-zero strategies and carbon reduction plans helps to go beyond the minimum EUDR requirements and achieve real progress in climate protection. Learn more about lifecycle assessments and impact analysis.

Support is especially helpful for CSRD reporting and EU taxonomy compliance, which are closely linked to the EUDR. With data-driven analyses and impact modeling, companies can make strategic decisions and achieve measurable results. Explore CSRD and ESRS reporting requirements.

The future belongs to those who see sustainability as a driver of innovation and competitive advantage. With the right advice, EUDR compliance becomes a springboard for resilient and future-proof coffee supply chains.

FAQs

What technical tools can help smallholder farmers comply with EUDR requirements?

Smallholder farmers can benefit significantly from technical solutions that ensure transparency and traceability in the supply chain. These include digital traceability systems that document the origin of raw materials, as well as apps and platforms that help monitor sustainability criteria and generate reports. For a review of available tools, see TraceX: EUDR compliance for coffee and Koltiva: Digital solutions for EUDR.

Such technologies make it easier to efficiently implement EUDR requirements by automating processes and optimizing collaboration with suppliers. Especially for smaller operations, these solutions offer an affordable way to reduce regulatory risks and secure their long-term competitiveness.

How can German importers ensure their supply chain meets EUDR requirements, especially with non-certified systems?

German importers can meet EUDR requirements by using digital tracking systems that also include non-certified suppliers and their systems. Such supply chain transparency and due diligence tools enable structured data collection, risk assessment, and clear documentation of compliance. For more, see FoodNavigator: Traceability and EUDR.

Additionally, it pays to build close relationships with suppliers and conduct regular audits. These measures help verify product origin and sustainability. Centralized data platforms can significantly simplify the management and control of supply chain data. With these approaches, even complex supply chains can meet EUDR requirements and effectively reduce risks.

What impact does the EUDR have on the global coffee industry, especially on prices and supply chains?

Rising Coffee Prices Due to the New EU Deforestation Regulation

The introduction of the new EU Deforestation Regulation (EUDR) is expected to drive up coffee prices in Europe. The reason lies in the additional costs, especially for smaller producers in developing countries, who must comply with the new requirements. These include measures such as traceability and certifications, which require investments in modern technologies and more efficient processes. For a market analysis, see Coffee Trading Academy: EUDR and coffee prices and Lavazza begs to postpone EUDR.

In addition, supply shortages could occur, as not all producers will be able to meet the strict requirements. This could not only jeopardize supply security but also lead to shortages in the European market. The resulting combination of higher production costs and possible supply issues is likely to noticeably affect consumer prices and presents the entire industry with major challenges. For further reading, see FoodNavigator: EUDR and coffee market impact.