The European Union Deforestation Regulation (EUDR) is reshaping how companies approach their supply chains, and perhaps no product better illustrates this transformation than the chocolate bar. While most consumers see only the final product on their local store shelf, the journey from cocoa bean to chocolate bar under EUDR involves multiple checkpoints and due diligence statements (DDS). Let’s take a deeper look.
1) The First Filing: Raw Cocoa Import
The story begins in West Africa’s cocoa plantations. When raw cocoa beans first enter the EU, the importing company must file an initial DDS. This involves:
- Collecting geolocation data for cocoa-growing plots.
- Verifying the deforestation-free status of the production
- Ensuring legal compliance in the country of origin
- Submitting comprehensive documentation
2) The Second Filing: Processing Stage
When a European chocolate manufacturer purchases these beans and processes them into cocoa butter and powder, another DDS filing is required, because they’re transforming one Annex I product (cocoa beans) into other Annex I products (cocoa butter and powder), making them an operator under EUDR regulations.
3) The Third Filing: Chocolate Production
When our manufacturer combines these ingredients to create chocolate bars, they trigger yet another filing requirement. Since chocolate (HS code 1806) is listed in Annex I of the EUDR, the creation of this new product necessitates another round of due diligence.
4) Additional Requirements: Large Traders
Even after the chocolate bar is produced, the documentation journey might not be over. Large retailers meeting the EUDR’s “large trader” definition must submit their own DDS based on information received from manufacturers.
Managing Complexity in Composite Products
For chocolate manufacturers, there’s a silver lining: the EUDR focuses on main relevant commodities. In a chocolate bar containing multiple ingredients (like palm oil or nuts), companies primarily need to conduct due diligence on the cocoa content, streamlining what could otherwise be an even more complex process.
Why this matters?
This multilayered approach serves several crucial purposes:
- Comprehensive Traceability: Each transformation point becomes a checkpoint for verification
- Shared Responsibility: Multiple stakeholders are accountable for ensuring deforestation-free products
- Risk Mitigation: Regular verification reduces the chance of non-compliant products entering the EU market
Looking forward
While the multiple filing requirements may seem burdensome, they represent a systematic approach to ensuring sustainability in global supply chains. For the chocolate industry, this translates into enhanced transparency from farm to store, coupled with better documentation of sourcing practices. The system creates increase accountability at every stage of production, ultimately giving consumers greater confidence in product sustainability.
The chocolate bar example demonstrates how EUDR is fundamentally changing business operations. By requiring thorough documentation and verification at multiple points, the regulation is creating a new standard for sustainable commerce. While challenging to implement, these requirements are essential steps toward protecting global forests and promoting responsible business practices.