From 2025, only chocolate that has not been cleared of forests and that has not been produced with child labor can be imported.
“Chocolate products such as chocolate Easter bunnies will probably become noticeably more expensive due to the EU’s new deforestation regulation, which comes into force at the end of 2024,” said the economist Birgit Meyer from the Economic Research Institute (Wifo). From next year, only chocolate whose cocoa “no forest was cleared and no child labor was used” will be allowed to be imported.
Die Deforestation regulation does not specifically concern cocoa or Easter bunnies, but rather raw materials such as Wood, rubber, soy, coffee, palm oil and beef and products made from these.
The deforestation regulation requires companies to carry out due diligence on their supply chain. If companies do not comply, there may be penalties and product bans. This is how she should contribute to the global protection of forests and human rights. Although the EU states are not among the largest producers of products for which forests are cleared, they are among the largest consumers.
On the one hand, this will probably lead to changes in the growing regions: According to the Wifo study, deforestation in Brazil (mainly for beef, coffee and soy) and Indonesia (mainly for palm oil) could decrease by around eight to nine percent.
On the other hand, this will probably lead to a reorganization of the international flow of goods. The EU sources 40 percent of its cocoa from the Ivory Coast and 14 percent from Ghana.
As producers upgrade their supply chains to the higher standards, in many cases this means higher raw material costs. A significant increase in costs is to be expected, particularly for “chocolate, coffee and palm oil,” according to the Wifo study. These are likely to be passed on to consumers.
Only minor losses in prosperity
“Simulations from a new Wifo study show that the deforestation regulation can lead to moderate welfare losses in the EU and in partner countries through shifts in trade and higher costs for compliance with due diligence obligations,” said Meyer.
However, according to Wifo calculations, the regulation will only have a minor impact on overall economic prosperity.If companies subsequently raise their standards, the consequences for producing countries should be less than if products were banned from supply chains. Even in this case, Wifo estimates the effective EU-wide loss of prosperity to be a total of 7 billion euros or 0.05 percent of economic output.