• The EU buys about 40% of global coffee imports, while companies supplying the bloc handle nearly 80% of worldwide coffee shipments.
• Trase finds that major coffee companies may find it cheaper to apply EU deforestation requirements across their entire supply chains.
• The findings challenge concerns that the regulation will inevitably create separate EU and non-EU supply chains.

The European Union’s deforestation rules could influence far more coffee than the volume ultimately sold within the bloc, according to new research from non-profit Trase.

The EU Deforestation Regulation, requires companies placing covered commodities on the European market to demonstrate that their products are deforestation-free. Importers must also trace commodities back to the plots where they were produced.

For large coffee suppliers, complying only with EU-bound shipments may prove more complex and expensive than applying the same standards globally.

Trase found that companies supplying both European and other markets could therefore extend EUDR traceability requirements across entire coffee supply chains.

“For such companies, extending traceability requirements across their supply (chains) may be most cost effective. This means the deforestation law could punch far above the EU’s weight,” said Trase.

EU market influence extends beyond its imports

The EU accounts for around 40% of global coffee imports. However, the companies supplying European buyers have a much larger footprint.

According to Trase, businesses serving the bloc collectively handle nearly 80% of worldwide coffee shipments.

That concentration gives European regulation potential influence over production destined for markets well beyond the EU.

Coffee company JDE Peet’s sends 84% of its beans to the EU. Trading groups Louis Dreyfus and Neumann Gruppe send 63% and 53%, respectively, according to the research.

For companies with that level of European exposure, creating separate sourcing, traceability and verification systems could carry significant operational costs.

A single compliance standard may instead offer simpler governance and reduce duplication across procurement systems.

Findings challenge supply-chain segregation concerns

The EUDR has faced criticism from producers, traders and governments concerned about its impact on small farmers.

One concern is that exporters could separate their supply chains. Easily traceable coffee would move to Europe, while beans from remote producers with weaker documentation systems would be directed elsewhere.

That outcome could leave smallholders unable to access one of the world’s most valuable coffee markets.

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Trase’s analysis suggests this separation may not always make commercial sense.

“The fact that many companies ship to both the EU and other markets suggests similar standards may be more easily adopted by those companies beyond the EU,” it said.

The finding does not eliminate implementation risks for small producers. Farmers and cooperatives still face the cost and administrative burden of geolocation, traceability and supply-chain data collection.

However, broader adoption by major traders could create incentives to build those systems across sourcing regions rather than restricting them to selected EU shipments.

Compliance becomes a global procurement issue

For multinational companies, the findings shift EUDR compliance from a European import issue toward a broader supply-chain governance decision.

Businesses must weigh the cost of segregating compliant products against establishing common traceability requirements across global sourcing networks.

That calculation also matters for investors. Traceability systems can affect procurement costs, supplier relationships, market access and exposure to regulatory enforcement.

Companies able to integrate deforestation data into existing sourcing systems may be better positioned as environmental due diligence requirements expand.

The stakes extend beyond coffee. The EUDR covers commodities including cocoa, palm oil, soy, cattle, rubber and wood, as well as certain derived products.

Deforestation is the second-largest contributor to climate change after fossil fuel combustion. EU policymakers designed the regulation to address the roughly 10% of global deforestation associated with EU consumption.

If companies apply European requirements beyond products sold inside the bloc, the regulation’s influence could reach substantially further. For executives and investors, that would turn an EU market-access rule into a global benchmark for commodity traceability and deforestation risk management.