Nigeria acts to protect $20b cocoa export industry amid EU regulatory deadline

To avoid losing over $20 billion in cocoa exports within three years, stakeholders are taking proactive measures ahead of the European Union Deforestation Regulation (EUDR) deadline.

The Guardian reports that the EUDR ensures that products sold in the EU are both sustainably sourced and legally produced, banning those linked to global deforestation, forest degradation, and biodiversity loss. It also seeks to promote deforestation-free supply chains, reduce the EU’s contribution to greenhouse gas emissions, and protect human rights and the rights of indigenous peoples.

Products covered under the EUDR include cocoa as well as palm oil, cattle, soy, coffee, timber, rubber, and their derivatives (beef, furniture, and chocolate are also listed).

It took effect on June 29, 2023, with a phased-in implementation schedule, culminating in full enforcement by December 30, 2024.

With the EU attracting 67 percent of cocoa exports from Nigeria, industry stakeholders say preparedness in this sector is particularly critical.

At a meeting in Abuja, stakeholders received the report of an EU-funded study analysing the preparedness of cocoa and other value chains to comply with the Regulation.

Speaking at the event, Head of Cooperation, EU Delegation to Nigeria and ECOWAS, Massimo De Luca, stated that the EU aims to develop a strategy that both protects the environment and mitigates the effects of climate change.

“In cocoa farming, a lot of virgin land is cleared, and farmers utilise such forested lands to farm. This is why the EUDR is important to discourage deforestation, but also why the EU is here to support the local farmers with improved agro-ecological techniques and improvements in productivity,” he said.

The workshop also presented the EU Corporate Sustainability Due Diligence Directive (CS3D), a new legislative instrument applying to all value chains and requiring that, while conducting economic activities, companies should minimise negative environmental and social impacts.

Explaining the significance of the CS3D, Massimo De Luca added, “From water, to child labour, companies need to assess risks associated with their activities and measures to remedy, including compliance with national and international standards.”

Represented by Ajayi Olutobaba, Deputy Director, Cocoa/Member, National Cocoa Management Committee, Federal Ministry of Agriculture and Food Security, Senator Abubakar Kyari, Minister of Agriculture and Food Security, welcomed the EU’s partnership with the Federal Ministry of Agriculture and Food Security and the introduction of the EUDR.

“The EU’s partnership with the Ministry on the critical issue of the EUDR, and the need for due diligence assessments to be conducted in relevant value chains, is a welcome development.

“Given the importance of the EUDR and the need to ensure due diligence assessments in Nigeria’s cocoa sector to guarantee deforestation-free supply chains for cocoa and other agricultural products, I recently inaugurated the National Taskforce on EUDR, comprising all relevant stakeholders in the affected value chains,” he stated.

He said the National Taskforce, chaired by him, aims to develop a unified national approach to meet the EU’s deadlines.

In his presentation, Javier Sánchez, key expert commissioned by the European Commission, noted that while the EUDR presents short-term challenges for producing countries, it offers significant opportunities in the medium term.

“The EUDR should not be seen as a disadvantage for Nigeria. This is an opportunity to enhance environmental sustainability, create sustainable value chains, and strengthen compliance with national regulations across the value chain,” he said.

Sánchez said that compliance with the EUDR strengthens the role of small producers in international value chains by promoting transparency, allowing consumers to know the origins of cocoa, coffee, and other products.

“The private sector, particularly EU-based importers, is the key player responsible for EUDR implementation. They will face significant sanctions for non-compliance. Due to the structure of the value chain, they will then also look to the upstream actors, especially cooperatives and middlemen, who have information about the origin of the products, to ensure EUDR is complied with.

“While the government cannot replace the private sector’s role, it can facilitate compliance by developing tools and ensuring awareness of the regulations that private sector actors must follow,” he added.

According to the Cocoa Farmers Association of Nigeria (CFAN), Nigeria’s cocoa could be at risk if the Nigerian government does not take the necessary legal steps to address the matter.

They, however, assured the EU that steps are being taken to comply with best practices.