Over the last two decades, about 130,000 hectares, or 3,210,000 acres, of forest have been lost annually for coffee cultivation. Pressure on areas suitable for coffee growing, usually forest-rich habitats, is estimated to increase, as coffee production is expected to triple by 2050 to meet growing demand. Part of that demand is represented by the European Union market, which consumes about one-third of this global commodity.

In an effort to reduce its impact on forests, the EU recently approved a regulation aimed at preventing coffee and other agricultural products linked to deforestation from being sold in its common market. Known as the EUDR, the regulation requires companies to demonstrate that such products didn’t originate from deforested land after Dec. 31, 2020, and that they were produced in compliance with environmental and human rights laws in the country of origin.

Although the EUDR’s applicability date has been postponed to December 2025 (and to June 2026 for micro- and small enterprises), some companies in the coffee sector, particularly the largest ones, have begun preparing to meet its requirements. Among them are Nespresso and commodity trader Louis Dreyfus Company (LDC).

While noncompliance could lead to significant profit losses, including a potential ban from the EU market, both Nespresso and LDC have expressed support for the EUDR regulation, citing their company-wide commitments to eliminating deforestation from their respective supply chains.

“We continuously work to ensure a deforestation-free supply-chain,” Nespresso, part of Switzerland-based Nestlé Group, told Mongabay via email. “Forests are key to preserving biodiversity, fighting climate change, and achieving our commitment to net zero emissions. We have supported the EU Deforestation Regulation for its potential to make stakeholders step up and work together to protect the world’s forests.”

LDC, one of the world’s largest commodity traders, said in an email to Mongabay: “While we expect further details from the European Commission, LDC continues its efforts to proactively prepare for compliance, including by engaging with and supporting our suppliers (especially smallholder producers) to address practical challenges associated with implementation. In fact, as part of our commitment to eliminating deforestation and conversion of native vegetation for agricultural purposes from our supply chains, we already carry out deforestation and conversion due diligence.”

Agroforestry as an alternative pathway

For both companies, the pathway to regulatory alignment involves previous commitments to sourcing coffee from farms employing agroforestry and regenerative agriculture practices. These methods aim to promote biodiversity conservation and landscape restoration, and can also improve crop yield and quality, according to experts.

Nespresso, for example, launched a program in 2003 to provide training and technical support to its coffee suppliers in adopting regenerative farming techniques, offering premium pricing as one of the incentives. Developed in collaboration with the Rainforest Alliance, a third-party sustainability certification organization, the AAA Sustainable Quality Program now includes more than 157,000 coffee farmers across 18 countries.

“Nespresso’s AAA Sustainable Quality Program is a comprehensive approach to enhancing productivity and the quality of coffee harvests while also improving farmers’ livelihoods and rural landscapes,” said Kevin Lardner, coffee trade manager at the Rainforest Alliance. “With that in mind, the AAA Program can be considered an effective tool for addressing the social, economic, and environmental challenges that the coffee sector faces, including deforestation and land degradation.”

The Nature Conservancy, an international environmental nonprofit, is supporting LDC in implementing regenerative agriculture practices across its coffee, grains, oilseeds, and cotton supply chains. This collaboration aims to support approximately 30,000 farmers in North and South America.

“We … look forward to scaling these practices to eliminate deforestation and habitat conversion from commodity production on a global scale,” said Jennifer Morris, CEO of The Nature Conservancy as the organization announced its collaboration with LDC. “Collective action in this sector is imperative to unlock benefits for both people and nature.”

Agroforestry has the capacity to act as a buffer, stabilizing farm-forest frontiers and preventing degradation, a team of scientists from the Center for International Forestry Research and World Agroforestry (CIFOR-ICRAF) told Mongabay via email.

But “while well-designed agroforestry systems can mimic nutrient and water flows similar to those in forests, agroforests can not replace the ecological functionality of primary forests,” they added. “Commodity-driven deforestation can only be prevented with effective policies that prevent the conversion of functional forest ecosystems into other land uses and not by integrating trees into managed, agricultural landscapes.”

Risk assessment and traceability

Using its technical expertise and tools from its global certification program, the Rainforest Alliance has recently begun supporting coffee and cocoa companies in preparing for compliance with the EUDR. It has already issued more than 270 certificates for groups of farms that have been audited and meet the standard, plus four additional EUDR requirements.

“Our EUDR Deforestation Risk Assessment tool is an online resource designed to help coffee and cocoa supply chain actors and farmers, especially those with non-certified sourcing footprints, with their compliance efforts,” Lardner said. “Users simply upload the geodata related to their production areas, which we then cross-reference with publicly available data sets and proprietary AI tree-cover maps to assess deforestation and encroachment risks.”

Lardner said that when risks are identified, the process is followed by “ground truthing” to validate the results. “Auditors must then conduct targeted on-site visits, prioritizing those flagged as ‘high-risk’, to confirm any instances of encroachment on protected areas or their officially designated buffer zones. Producers have … ten weeks to address any non-conformities, which must also be verified on-site by an independent third-party certification body.”

Since May 2024, one group of mixed farms in Brazil and five groups of small farms in Colombia, which supply coffee to LDC, have been certified by the Rainforest Alliance as EUDR-compliant. The company also discloses its approach to supply chain traceability, risk assessment and mitigation. However, only 42% of LDC’s global coffee supply is currently verified as meeting its deforestation- and conversion-free commitments, according to the company’s 2023 monitoring report.

Nespresso faces similar challenges. While the company currently sources more than 82% of its coffee from farms participating in its AAA Program, which are required to comply with zero deforestation (from Jan. 1, 2014, onward) and other sustainability standards, an impact assessment report by the Rainforest Alliance indicates that not all farms are fully compliant.

Nespresso hasn’t commented on its approach to addressing instances of nonconformity by suppliers, but stated it’s also working with Enveritas, a third-party satellite-based monitoring system that provides insights into whether any potential actions are needed.

Challenges in achieving full compliance

Despite considerable progress in the coffee sector, challenges remain in the sector’s transition to 100% deforestation-free supply chains and in meeting the EUDR requirements.

“Climate change is reducing yields and increasing pests and disease outbreaks. This situation exacerbates economic instability among rural communities and often leads farmers to clear new land in higher-altitude areas where the weather conditions may be more favorable for coffee cultivation,” Lardner said. “Other challenges relate to forest governance, inadequate land registries, and a lack of organization among producers in some countries, which complicate the enforcement of sustainable practices to address deforestation within supply chains.”

He added that demonstrating progress on deforestation-free commitments, as mandated by the EUDR, is another major undertaking. “This process can be costly for both companies and farmers, as they need to invest in the right systems and technology to demonstrate their progress.”

For the CIFOR-ICRAF team of scientists, a key issue is the lack of policy coherence regarding the definition of “forest,” which varies across countries and even within the EU, and how to distinguish it from tree-based land uses.

“There appears to be a substantial gap between the formal EUDR definition of forest and its derivative deforestation, and the evidence on ‘tree cover change,’” they say. “Tree cover and tree cover change can be observed on satellite imagery but is only half of the forest definition. The other half, the absence of agricultural use and agroforestry, is much harder to assess.”

CIFOR-ICRAF’s team also observed that collaboration between EU authorities and the governments of exporting countries is crucial for verification purposes and to prevent potential damage to farmers practicing agroforestry, as agroforests could be misclassified as forests by satellite imagery. However, it remains unclear whether this collaboration will materialize.

“When remote sensing products are tested with independent ground truth data, accuracy at individual measurement point (‘pixel’) levels is usually above 85%, but this does not mean that the maps can be safely used,” they say. “Looking at the EUDR as a chain of actors, it is not clear how the ‘competent national authorities’ that will check on the due diligence statements will be able to discern whether a 2020 tree cover indication was forest or already agroforestry. The most obvious sources of locally-checked information would involve local governments — but these are not formally invited to be part of the EUDR process.”

Banner image: Coffee plants in a deforested scrub area in Laos. Image by Rhett A. Butler for Mongabay.

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