Regulations can often pose complex challenges for industries, and the European Union Deforestation Regulation (EUDR) is no exception. Specifically, businesses dealing with commodities such as cocoa now have to navigate the compliance requirements of this eu regulation.
This article will provide a detailed guide on ‘Navigating EUDR Compliance for Cocoa’ to help industry professionals understand and align with the EUDR requirements effectively. EUDR compliant cocoa is crucial for both producers and buyers in ensuring sustainability and traceability in the cocoa supply chain.
Navigate EUDR compliance for cocoa and then understand how satellites are revolutionizing deforestation monitoring.
Key Takeaways
- EUDR presents complex regulatory challenges for industries dealing with commodities such as cocoa.
- The regulation aims to control commodities contributing to deforestation, addressing global forest loss and its environmental impacts.
- EUDR mandates due diligence systems for tracing product sources to ensure deforestation-free cocoa production.
- Understanding regulatory requirements and collaborating with the entire supply chain can help the cocoa industry manage EUDR compliance effectively. Aligning with EUDR rules contributes to reduced deforestation and promotes sustainable cocoa production.
- Businesses must prepare and store due diligence statements for five years to demonstrate compliance with EUDR rules.
- Certified cocoa is crucial for meeting EUDR requirements, ensuring traceability and sustainability. Certified cocoa must meet specific standards to confirm it originates from farms not responsible for deforestation.
- Specialized software solutions like TradeAware can streamline the compliance process, offering tools to gather geolocation data, detect deforestation, assess land use changes, and generate due diligence reports.
Understanding the Basics of EUDR
The European Union Deforestation Regulation (EUDR) is set to combat global deforestation and forest degradation driven by the production of high-risk commodities such as cocoa, soy, coffee, and palm oil. The regulation aims to reduce the EU’s environmental footprint by ensuring that products placed on the EU market, or exported from it, do not contribute to deforestation or forest degradation after the cut-off date of 31 December 2020. It also supports broader climate and biodiversity goals by addressing the link between land use change and greenhouse gas emissions, biodiversity loss, and the spread of zoonotic diseases.
The EUDR applies to both EU-produced and imported products, requiring operators and non-SME traders to demonstrate that their commodities are:
- Deforestation-free,
- Legally produced according to the relevant legislation of the country of origin, and
- Accompanied by a Due Diligence Statement submitted via the EU’s TRACES NT system.
To comply, companies must collect geolocation coordinates of all production plots, verify legal sourcing, assess deforestation risks, and apply mitigation measures where risks are not negligible.
Implementation and enforcement of the EUDR may differ across EU Member States, especially regarding customs clearance procedures and local verification systems. Therefore, it’s essential for businesses operating internationally to consult up-to-date national guidance and legal interpretations.
Read also: Achieving Compliance: Essential Steps for Companies under the EU Deforestation Regulation
How EUDR Impacts the Cocoa Industry
Under EUDR, operators in the cocoa industry are held accountable within each supply chain. The regulation mandates due diligence systems to trace product sources, ensuring deforestation-free cocoa production. Countries are categorized based on the risk of deforestation associated with the sourcing of cocoa, with 'high risk' areas facing more stringent inspection requirements and due diligence obligations.
In addition to ensuring deforestation-free sourcing, cocoa must be produced in accordance with the relevant legislation of the country of production, including environmental, labor, and land use laws. This dual requirement reinforces both legal and environmental compliance.
Operators and traders, two key roles defined under the EUDR, carry distinct responsibilities. Operators are those who first place cocoa or cocoa products on the EU market or export them, while traders make these products available further down the supply chain. Understanding whether your business is an operator or trader is critical for determining the extent of your due diligence obligations under the regulation.
Check out also: Checklist: Choosing the Right EUDR Compliance Solution
EUDR Compliance Steps for Cocoa
To comply with the European Union Deforestation Regulation, cocoa producers and supply chain actors must establish a robust due diligence system that follows four key steps: information collection, risk assessment, risk mitigation, and submission of a Due Diligence Statement.
Each step must be thoroughly documented to ensure transparency, traceability, and legal compliance. Let's have a look at the details:
1. Information Collection
The first step under the EUDR due diligence system is collecting comprehensive information about the cocoa supply chain. This includes accurate geolocation coordinates of each plot of land where cocoa is cultivated. For plots larger than 4 hectares, polygon mapping is required to define the perimeter.
All cocoa must originate from land that has not been subject to deforestation after 31 December 2020. This traceability ensures each product can be linked back to its origin, enabling verification of deforestation-free sourcing.
2. Risk Assessment
After collecting the necessary data, operators must assess the likelihood that the cocoa was produced on deforested or illegally used land. This includes evaluating the sourcing area's deforestation history, legal compliance, and other relevant factors such as corruption levels, country risk classification, and previous supplier performance.
The risk assessment must be documented and based on credible and verifiable evidence to satisfy EUDR obligations.
3. Risk Mitigation
If the risk of non-compliance is not negligible, businesses are required to implement risk mitigation measures before placing cocoa products on the EU market. These measures may include obtaining additional documentation, changing suppliers, conducting independent audits, or implementing improved monitoring practices.
Risk mitigation strategies must be reviewed and updated annually to reflect any changes in sourcing practices or external risk factors.
4. Due Diligence Statement and Record Keeping
Once the due diligence process is complete, companies must submit a Due Diligence Statement (DDS) via the EU’s TRACES NT system before importing or exporting cocoa products. This declaration must confirm that products meet EUDR requirements and pose no more than a negligible risk of deforestation or legal non-compliance.
Additionally, all supporting documentation—including geolocation data, risk assessments, and mitigation records—must be stored for at least five years. While third-party certifications can support traceability, they do not replace the legal requirement for documented, company-led due diligence under the EUDR.
Tools for Simplified EUDR Compliance for Deforestation Free Products
EUDR compliance demands precision, transparency, and scalability—requirements that manual processes alone can no longer meet. This is especially true for cocoa, where farm-level traceability, legality verification, and geospatial accuracy are non-negotiable. To meet these expectations, businesses must turn to specialized software platforms designed to streamline the full spectrum of due diligence activities.
The Importance of Polygon Mapping and Geolocation Accuracy
One core capability is polygon mapping, which is a mandatory requirement under the EUDR for all plots of land larger than 4 hectares. Accurate geolocation is the foundation for verifying whether cocoa is sourced from land that remained forested after the EUDR’s critical cut-off date of 31 December 2020. Additionally, traceability requires firms to document detailed producer information, land use records, and associated legality documentation.
Compliance With Platforms Like TradeAware
Platforms like LiveEO’s TradeAware provide end-to-end compliance coverage—from geolocation data collection and deforestation detection to legality risk assessment and automated generation of Due Diligence Statements (DDS). These systems integrate with ERP platforms and support real-time reporting to the EU’s TRACES NT portal, ensuring compliance is not only accurate but also auditable and defensible.
Choosing the Right EUDR Software Partner
Choosing the right software is crucial. With a growing number of providers on the market, many of which offer limited or non-transparent functionality, selecting a vendor with proven expertise and regulatory alignment is key. To help businesses make confident choices, we’ve created a dedicated guide: How to Choose an EUDR Software—complete with a downloadable Request for Proposal (RFP) Template. This guide outlines the 10 must-have features your compliance solution should include and explains how to evaluate capabilities such as AI-driven risk assessments, data integration, and long-term vendor support.
Investing in the right compliance technology ensures your cocoa supply chain is not only EUDR-compliant but also future-ready—supporting sustainable sourcing and protecting your market access in the EU.
Conclusion
Managing compliance under the European Union Deforestation Regulation can initially seem overwhelming for the cocoa industry.
However, with an understanding of the regulatory requirements and the use of innovative tools, operators can efficiently ensure alignment with the rules, contributing to reduced deforestation and sustainable cocoa production. If you don't know where to start, contact our EUDR experts and start your compliance journey today.
