Working together to address the EU Deforestation Regulation in Vietnam

IDH, the Vietnamese government, the Director-General of the Environment Department of the European Commission, and the coffee value chain actors concerted efforts to respond effectively to the recently enacted EUDR

From 1990 to 2020, 420 million hectares of forests worldwide – an area larger than the entire European Union – have disappeared (FAO). Deforestation and forest degradation are the main causes of climate change and biodiversity loss, contributing to approximately 11% of total greenhouse gas emissions (IPCC). One of the key drivers of deforestation is the expansion of agricultural production. Between 2015 and 2017, the EU's annual consumption of palm oil, soybeans, forest products, cocoa, and coffee resulted in the deforestation of 190,000 hectares of forests annually. As a large consumer market, the European Union (EU) is deeply concerned about this situation and demands action. "As a major consumer market, the EU has a major role to play. This is why the EU has recently adopted the EU Regulation to fight deforestation. Due diligence and strict traceability obligations will apply, without discrimination for all relevant products", Mrs. Florika Fink-Hooijer, Director-General of the Environment Department of the European Commission (EC) shared.

From 1990 to 2020, 420 million hectares of forests worldwide – an area larger than the entire European Union – have disappeared (FAO). Deforestation and forest degradation are the main causes of climate change and biodiversity loss, contributing to approximately 11% of total greenhouse gas emissions (IPCC). One of the key drivers of deforestation is the expansion of agricultural production. Between 2015 and 2017, the EU’s annual consumption of palm oil, soybeans, forest products, cocoa, and coffee resulted in the deforestation of 190,000 hectares of forests every year. As a large consumer market, the European Union (EU) is deeply concerned about this situation and demands action.

“As a major consumer market, the EU has a major role to play. This is why the EU has recently adopted the EU Regulation to fight deforestation. Due diligence and strict traceability obligations will apply, without discrimination for all relevant products’, Mrs. Florika Fink-Hooijer, Director-General of the Environment Department of the European Commission (EC) shared.

Visit of the Director-General of the Environment Department of the European Commission to Vietnam

On June 29, 2023, the European Union Deforestation-free Regulation (EUDR)[1] enters into force. To comply with the regulation, 100% of some of Vietnam’s agricultural products, especially wood and wood products, coffee, and rubber, imported into the European market must be traceable at farm-level and must be proved not to be produced on deforested land. The Vietnamese coffee value chain actors have been facing many challenges posed by location data, traceability, forest monitoring systems, and deforestation-free supply chain management.

Jointly organized on June 29, 2023, by the Ministry of Agriculture and Rural Development (MARD), the European Union Delegation to Vietnam, and IDH, the Conference ‘Deforestation-free coffee production and supply in compliance with European Union regulation’ aimed to provide an overview of the new EUDR requirements, the potential opportunities and challenges that the regulation might bring to Vietnam coffee sector. Moreover, the the EUDR National Action Framework for the Vietnam coffee sector’s compliance with the EUDR was introduced at the conference at the first time, setting the stage for future cooperation and concerted efforts of public and private sector. The conference witnessed the presence of over 100 delegates, including representatives from various departments under MARD, provincial authorities of the five Central Highlands provinces, EU member states, coffee associations, businesses, international development organizations, and media. The event was co-chaired by H.E. Le Minh Hoan, Minister of MARD, and Mrs. Florika Fink-Hooijer, Director-General of the Environment Department of the European Commission (EC).

By complying with the EUDR, Vietnam aims to protect its natural resources, foster sustainable trade, and create a thriving coffee sector that aligns with global sustainability goals. ‘MARD considers compliance with this regulation not only necessary to meet the requirements of the EU market for exporting key commodities, but also an opportunity to accelerate the implementation of Vietnam’s agricultural development strategy towards ‘transparency, responsibility, sustainability, and green growth’. At the same time, it is necessary to promote the collaboration between public sector, private sector, international and local organizations to prepare for EU’s requirements regulation, sustaining the trade flows of sustainable agriculture commodities, ensuring farmers’ livelihood”, Mr. Le Minh Hoan, Minister of MARD shared in his opening statement at the conference.

Discussing the Implications of the EUDR on the Coffee Sector in Vietnam

Minister Hoan also highly appreciated the cooperation and support of the EU in recent times, contributing significantly to the process of transforming Vietnam’s agriculture sector. “The EU is committed to support Vietnam’s sustainable development. By combining our strengths, the EU and Vietnam aim to address environmental challenges more effectively, contributing to the overall well-being of Vietnamese citizens and the preservation of the country’s unique natural heritage“, Ms. Florika Fink-Hooijer, emphasizing the EU’s commitment in her speech at the conference.

IDH fosters strategic partnerships to face the EU regulation

In anticipation of the EUDR during its review and approval by the European Parliament, IDH has taken a proactive stance. The organization has proactively approached, researched, and gained insights into the EU’s new regulations within the EUDR, aiming to understand their potential ramifications for targeted commodity sectors. IDH has focused its efforts on sectors where it actively implements sustainable development initiatives worldwide, including palm oil, soybeans, cocoa, and coffee. These sectors are of paramount importance due to their significant impact on the environment and the livelihoods of many stakeholders, especially the smallholder farmers.

In Vietnam, the IDH Landscape Program has forged strategic partnerships with public and private entities at both the central and local levels. Moreover, major businesses in the sector have been actively engaged in discussions to collectively navigate the forthcoming regulatory landscape. The aim of these collaborative efforts is to ensure preparedness and swift implementation to meet the stringent EUDR requirements within the prescribed 18-24-month timeframe.

As a trusted organization with extensive experience in promoting sustainable development through effective public-private partnerships, IDH once again demonstrates the vital role of such collaborations. These partnerships are crucial for promptly and comprehensively addressing the evolving sustainability demands of major consumer markets, such as the European Union.

According to Ms. Chi Tran, Regional Director, Asia Landscapes :

 The introduction of EUDR will be an important milestone for a critical transformation of the whole sector towards transparency and sustainability, complying with the various requirements of the markets and buyers like deforestation and degradation-free, low emission and smallholder’s livelihood. With nearly 10 years of experience implementing the IDH Landscape Program in the Central Highlands with public agencies and companies, like JDE Peet’s, Simexco, Intimex, ECOM and LDC, IDH will closely collaborate with national and local partners in Vietnam to deploy the comprehensive interventions to comply with EUDR. At the same time, we call for the participation and contribution of interested companies and organizations in the EUDR Action Framework, to deliver significant impacts on responsible production, natural resources protection and social inclusion,

 

Key Outcomes of the Conference

At the conference, Ms. Chi Tran proposed four solutions related to country benchmarking methodologies, development pathway of the national database including forest data and plot/farm-level data, traceability models for low, standard, and high-risk areas, application of landscape approach for tangible impact on the ground.

The conference concluded with a shared commitment among MARD, IDH, local authorities of the five Central Highland province and JDE Peet’s support the development of large to collaborate, innovate, and adopt sustainable practices to ensure responsible coffee production and supply chains.

‘As one of the world’s leading coffee buyers, JDE Peets is well aware of our role to support the sustainable development of coffee sector over the world. JDE Peet’s is committed to closely collaborating with MARD, the authorities of the Central Highlands provinces, IDH, and businesses to develop and implement comprehensive innovative solutions. These efforts aim to help the Vietnamese coffee industry quickly meet these new regulations. Through this public-private partnership, we believe that we will create positive changes, contribute to the protection of forest resources, reduce greenhouse gas emissions, and at the same time, improve the livelihoods of farmers, especially coffee farmers in high-risk area’, Mr. Do Ngoc Sy, APAC Sustainability Manager of JDE Peet’s shared at the conference.

By proactively engaging with stakeholders and staying ahead of the regulatory curve, IDH showcases its commitment to fostering sustainable practices and driving positive change in commodity sectors worldwide. As the EUDR gains momentum, this proactive approach positions IDH’s partners well to navigate the challenges and embrace the opportunities that lie ahead, ultimately contributing to a more sustainable and responsible global commodity trade.

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For more information access:

Press Release

The news published on the EU Delegation in Vietnam

Other available material:

[1] The full version of EUDR can be found here: https://data.consilium.europa.eu/doc/document/PE-82-2022-INIT/en/pdf

[2] IDH presentation on EUDR and Vietnam coffee sector