New Fairtrade Cocoa Standards

The global chocolate industry is facing increased pressure to adopt more sustainable and ethical practices. In 2024, the chocolate industry is undergoing a significant transformation with the introduction of stricter Fairtrade standards and environmental regulations. These changes aim to address pressing social and ecological concerns, ensuring that the journey from cocoa farm to chocolate bar is more ethical, transparent, and sustainable.

This article explores the revised requirements for Fairtrade cocoa, the increased focus on environmental accountability, and the potential impact on producers, consumers, and the planet. With data, insights, and actionable solutions, we’ll uncover how these new standards are shaping a more conscientious future for chocolate lovers everywhere.

Revised Fairtrade Cocoa Standards

Fairtrade International updated its Cocoa Standard in April 2024, introducing several key requirements:

1. Human Rights and Environmental Due Diligence (HREDD)

This requirement ensures that cocoa producers actively work to protect human rights and minimize environmental harm within their operations. Chocolate producer organizations are required to:

• Identify Risks: Conduct thorough assessments to identify potential human rights abuses, such as child or forced labour, as well as environmental risks such as pollution or habitat destruction.
• Prevent Issues: Establish processes to proactively prevent abuses, including creating safe working conditions and sustainable farming practices.
• Address Violations: Have mechanisms in place to address any violations or risks that are detected. For example, if child labour is identified, producers must take steps to eliminate the practice while ensuring the affected children are supported, such as through education.^[1]

2. Deforestation Prevention

Cocoa farming is one of the key contributors to deforestation in tropical regions. To combat this:

• Cut-Off Dates: A specific date is set after which any land cleared for cocoa farming is considered non-compliant with Fairtrade standards. This prevents further forest loss.
• Risk Assessments: Producers are required to assess whether their farming activities are contributing to deforestation.
• Monitoring: The use of satellite imagery and data is encouraged to monitor farming areas and ensure no encroachment on forests occurs.^[2]

3. Traceability Enhancements

Traceability is vital for ensuring that cocoa is sourced responsibly:

• Geolocation Data: Producers must provide exact coordinates of cocoa farms to enable tracking of where the cocoa comes from.
• Farm Polygons: These are detailed maps outlining the specific boundaries of farms. They provide more precise data than geolocation alone, helping to monitor land use and ensure that cocoa is grown on compliant land.
• Transparency: This data allows buyers and regulators to verify that cocoa is produced without contributing to illegal practices or deforestation.

4. Living Income Strategies

Fairtrade standards aim to help farmers achieve a living income, ensuring they earn enough to cover basic needs like food, housing, education, and healthcare:

• Income Resilience: Chocolate farmers are encouraged to diversify their income sources, such as by growing additional crops or participating in community projects.
• Support for Decision-Making: Training and guidance are provided to help farmers make informed choices about investments, crop rotation, and sustainable farming techniques.
• Fair Pricing: Buyers are expected to pay a premium for Fairtrade cocoa, which contributes directly to better incomes for producers.

These measures collectively aim to create a more equitable, transparent, and environmentally friendly cocoa industry, benefiting farmers, consumers, and the planet.

European Union Deforestation Regulation (EUDR)

The European Union introduced the EUDR, requiring companies to ensure their supply chains for commodities like cocoa are free from deforestation before products can be sold within the EU. Initially set to take effect on December 30, 2024, the regulation mandates that businesses:

• Supply Chain Transparency: Companies must map and trace their supply chains to confirm that their products do not contribute to deforestation.
• Compliance Deadlines: Large operators and traders are given until December 30, 2024, to comply, while smaller enterprises have until June 30, 2026.
• Strict Market Restrictions: If a company fails to meet the EUDR’s requirements, its cocoa shipments can be barred from entering the EU market, leading to significant financial losses and supply chain disruptions.

While the EUDR was originally set to take full effect by December 2024, there have been discussions about postponing enforcement by a year due to concerns about its impact on small farmers and businesses. Critics argue that small-scale cocoa farmers in West Africa—who produce the majority of the world’s cocoa—may struggle with the high costs and technological requirements needed for compliance.

On the other hand, environmental advocates warn that delaying implementation could slow global progress in fighting deforestation and weaken the EU’s leadership in sustainable trade. The debate continues as policymakers weigh the need for stricter environmental protections against the economic challenges faced by cocoa-producing nations.

By enforcing greater accountability in supply chains, the EUDR aims to make the chocolate industry more sustainable. However, its real impact will depend on how effectively it is implemented—and whether companies and governments can support farmers in meeting the new standards.

Industry Response and Challenges

Major chocolate manufacturers, including Nestlé, Mars Wrigley, and Ferrero,^[3] have publicly expressed support for the European Union Deforestation Regulation (EUDR), emphasizing their commitment to sustainable cocoa sourcing and environmental responsibility. These companies have pledged to strengthen their supply chain monitoring and invest in deforestation-free cocoa production to meet the new regulatory standards.

Despite these commitments, the industry faces significant challenges in adapting to the new requirements. One of the biggest hurdles is the rising cost of cocoa, which has reached record highs. In March 2024, cocoa prices surged to $10,000 per tonne, driven by climate change, crop diseases, and supply chain disruptions. This economic pressure makes it harder for farmers to transition to sustainable practices without additional financial and technical support.

Additionally, ensuring full supply chain traceability remains complex, especially for smallholder farmers who may lack access to technology or infrastructure. Many stakeholders stress the need for greater collaboration between governments, businesses, and NGOs to address deforestation, child labour, and farmer livelihoods.