Forests, often called the lungs of our planet, play a critical role in sustaining biodiversity, regulating climate and supporting livelihoods. Yet, deforestation remains one of the most pressing environmental challenges of our time.
As global markets increasingly prioritise sustainability, measures to combat deforestation are reshaping international trade policies and supply chains.
A European regulation aimed at preventing commodities linked to deforestation from entering the market will take effect in 2025. Ugandan farmers, particularly coffee and cocoa exporters, will not be immune to its impact.
Forests in Uganda
Forests cover approximately 15% of Uganda's land and contribute approximately 8.7% to the national economy. According to Global Forest Watch, Uganda lost 77.1 kilo hectares of primary forest in the last twenty years, making up 7.2% of the nation's total tree cover loss. The dominant driver of tree cover loss resulted from deforestation, majority of which occurred on privately managed land.
Forest reserves in Uganda include public forests managed and protected by either the National Forestry Authority ("NFA"), the Uganda Wildlife Authority or local governments and private forests managed and protected by their owners. According to the NFA, private forests form the bulk of forests in Uganda.
The EU Deforestation Regulation
The European Union ("EU") has been at the forefront of global environmental protection efforts, with a particular focus on combating deforestation and promoting sustainable practices. In recent years, EU legislation is becoming increasingly stringent, targeting imported products associated with deforestation risks.
In 2023, the EU adopted the EU Deforestation Regulation 2023/1115 of the European Parliament and of the Council of 31 May 2023 (the "EUDR"). The EUDR introduces measures aimed at ensuring products consumed by EU citizens do not contribute to deforestation or global forest degradation.
By promoting the consumption of 'deforestation-free' products, the EUDR is expected to contribute to minimising the EU's contribution to global deforestation and the reduction of greenhouse gas emissions and biodiversity loss.
What does the EUDR require?
Under the regulation, any operator or trader who places the relevant commodities on the EU market or exports from it must be able to prove that the products do not originate from recently deforested land or have contributed to forest degradation.
Under the EUDR, a forest is defined as land that spans more than 0.5 hectares with trees higher than 5 metres and a canopy cover of more than 10% or trees able to reach those thresholds in situ. Deforestation is defined as the conversion of forest to agricultural use, whether human-induced or not.
The EUDR targets coffee, cocoa, cattle, oil palm, soya, wood and rubber commodities, along with their derivatives such as chocolate, leather, meat products and paper. It applies to both EU-based and non-EU operators and traders.
The EUDR specifically prohibits the production of commodities on land deforested after 31 December 2020. An exporter is also required to show that the commodities are legally produced in accordance with the laws of the country of production and due diligence has been exercised in order to ensure compliance with the EUDR conditions.
Countries are expected to be categorised as high, standard, or low risk based on deforestation profiles, with varying compliance obligations. EU Member States must impose penalties for non-compliance and competent authorities are tasked with monitoring and investigating breaches.
Businesses and traders are therefore mandated to establish robust systems to verify that their supply chains are deforestation-free.
Do Ugandan farmers need to be concerned about the EUDR?
Coffee, cocoa and other agricultural commodities are key exports for Ugandan farmers seeking to sell their produce in the EU market. In 2022/23, 60% of the 6.14 million bags of green coffee exported from Uganda were destined for the European market. Uganda is also a key source of raw and roasted cocoa beans destined for the EU from East Africa. Products originating from land that is not compliant with the EUDR will not be permitted into the EU market.
Ugandan farmers exporting the target products to the EU must establish due diligence systems to prove that their supply chains are deforestation-free and comply with local legal requirements.
The local legal requirement is met when an exporter demonstrates that products are legally produced, in accordance with the relevant laws of Uganda. EU Commission guidance states that this requirement considers the legal status of the area of production in relation to land use rights, environmental protection, forest management and biodiversity conservation, labour rights and human rights. Geolocation data for production areas must be collected and provided, ensuring transparency and traceability.
If Uganda or specific regions within Uganda are classified as high-risk, exporters may face stricter scrutiny and enhanced requirements. The country benchmarking system is expected to be in place by 30 June 2025.
Where a Ugandan farmer does not directly export to the EU, its products may be part of larger supply chains that feed into the EU market. In such circumstances, the farmer would still need to ensure compliance with the EUDR to retain their market position. For example, Ugandan famers could be asked to provide information on EUDR compliance by other operators within the supply chain.
When does the EUDR take effect?
The EUDR came into force on 29 June 2023, with an 18-month transitional period for large and medium companies and a further 6 months for micro to small businesses.
On 19 December 2024, the EU granted an additional 12-month phasing in period. The law is now applicable on 30 December 2025 for large and medium companies and 30 June 2026 for micro and small enterprises.
Conclusion
The EU is one of Africa's largest trade partners. Europe remains the primary destination for Uganda's coffee and cocoa. The Ministry of Finance reports that Uganda earns an estimated USD 500 million annually from coffee exports to the EU.
The EUDR presents both challenges and opportunities for Ugandan coffee and cocoa exporters. Where applicable, compliance with the EUDR will require effort and investment. Adaptation to the changes will require a keen understanding of the regulation and analysis of the actions required before the implementation dates.
Compliance will ensure Uganda exporters continue to thrive in an increasingly environmentally conscious global market.
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