Agroforestry practices, which involve planting shade trees to reduce deforestation, remain relevant but must also comply with the new rules requiring proof that no forest was cleared after 2020.

The EU's new deforestation regulation aims to make coffee supply chains more sustainable by requiring companies to trace their coffee to specific farm plots and demonstrate no recent deforestation, with compliance deadlines set for December 30, 2024, for most companies and June 30, 2025, for small enterprises.

Most companies must comply by December 30, 2025, while small farms and enterprises have until June 30, 2026, to meet the new standards, which include detailed land tracing using geolocation data and satellite imagery.

Farm-level tracing will require companies to prove that land was forested before 2020 and has not been deforested since, with stricter oversight in regions prone to deforestation, potentially slowing trade from those areas.

These regulations are designed to promote sustainable coffee production globally, but they could lead to higher prices and reduced supply, especially affecting small farms that struggle with compliance costs and technical requirements.

Larger farms with existing traceability systems may benefit by gaining a competitive edge in the EU market, while smaller farms might face market access challenges unless they join cooperatives or receive support.

Small farms may need assistance through national programs or cooperatives to meet the new requirements, and increased demand for sustainability certifications like Rainforest Alliance and Fairtrade is expected, as these also require location data.

Stricter oversight in regions with higher deforestation risks could slow trade from those areas, whereas countries with better tracking systems might see increased trade, influencing global supply flows.

The EU Deforestation Regulation aims to reduce biodiversity loss and greenhouse gas emissions linked to commodities like coffee, cocoa, soy, and palm oil, by preventing EU consumption from driving deforestation.

Starting in 2026, the EU will require coffee products sold within its market to be 'deforestation-free,' meaning they must originate from land not cleared of forest since December 31, 2020, and companies must prove this to sell in the EU.

The implementation of these regulations has faced delays due to protests from Latin American, African, and Southeast Asian countries, citing concerns over trade friction and impacts on small farms.