Exporters who fail to comply with European Union regulations on deforestation will not be able to continue sending their products to the trading bloc.
Representatives of the European Union and the Ministry of Agriculture evaluate response work to the EUDR regulation in Ecuador, in May 2024.
Ecuador and European organizations are working against the clock to comply with the new European Union deforestation standard approved in 2024, which impacts cocoa, coffee and palm exports headed to that market.
This is Regulation 1115, which establishes that companies that export or market seven products or their derivatives to the European Union must demonstrate that they do not come from:
- Deforested areas.
- With forest degradation.
Regulated products are palm oil, livestock, soybeans, coffee, cocoa, wood, rubber or their derivatives, such as furniture or chocolate.
The regulations seek to decisively fight global deforestation and include guarantees that labor rights and indigenous peoples’ rights have been respected.
In this context, German organizations informed PRIMICIAS that they are advising Ecuadorian exporters to comply with the legislation that must be adopted until the end of December 2024. The deadline for micro and small companies is June 30, 2025.
Exporters who do not achieve this will not be able to continue sending their products to the European Union.
Ecuador exports USD 350 million in three products from the list contained in the new regulations; that is, coffee, cocoa and palm (and their derivatives). In the case of cocoa and coffee, the activity involves small producers, who could be seriously affected.
“The regulations will mean great logistics and expense for businesses in Ecuador that must verify compliance,” says Ulrike Stieler, DEinternational director of the Ecuadorian-German Chamber AHK.
Germany’s consultancy
Given this reality, the German Society for International Cooperation (GIZ) implements the Sustainable Agriculture for Forest Ecosystems (SAFE) program. This focuses on adapting value chains to the demands of markets for sustainable products in accordance with European Union regulations.
In Ecuador, SAFE has been applied in the Amazonian provinces of Sucumbíos and Orellana, so that cocoa producers obtain certificates and thus comply with the regulation of deforestation-free chains of the European Union.
Another GIZ program focused on the issue is Deforestation-Free Chains, which is developed in the Coastal region with the production of pitahaya, shrimp and wood , details Barbara Schulz, head of cooperation at the German Embassy in Ecuador.
The objective of the programs is to prepare the country’s small producers to reach the European market.
In addition, the AHK seeks to advise Ecuadorian agro-exporters on tools that allow them to demonstrate that they comply with the new European Union regulations. How? Through the presentation of certifications that they have already obtained. The plan is to start with the flower sector and then continue with bananas, coffee, among others.
This is also with the aim of complying with future regulations, details Stieler.
He adds that Regulation 1115 is not the only complex regulation of the European Union around the issue of environmental and social responsibility. For example, in Germany importers are held responsible for social aspects of the entire value chain , which is difficult to guarantee.
German resources for Ecuador
The German entities announced advice to Ecuadorian businesses and data on the commercial relationship between the two countries during a recent economic forum.
At the event they explained that cooperation between the two countries obtains resource allocation every two years for new programs.
New funding is scheduled to be allocated in 2024 for the next two years.
For example, in 2022 an allocation of more than 100 million euros was obtained , which is equivalent to nearly USD 110 million.
This money is earmarked for technical cooperation with GIZ and financial cooperation with the German development bank KfW.
Specifically, the resources are directed to sustainable urban development programs and sustainable urban development, to improve living conditions in intermediate cities.
Also to transparency and open government programs.
Schulz says that, in 2024, they will try to open a new line of financing for host communities and cities that receive migrants.
“Interesting niches” for Germany
Regarding trade opportunities between the two countries, Stieler affirms that in Ecuador there are “interesting niches” for Germany.
For this reason, the AHK advises and accompanies German entrepreneurs in various areas, ranging from the cultural field to logistical processes.
Currently, the European country is now exporting flexible technological solutions , adapted to local needs, says Stieler.
He adds that the Chamber guides Ecuadorian entrepreneurs in their participation in international fairs , which is the mechanism to enter the German and European market.
The Ecuadorian-German Chamber also advises them on compliance with traceability, transparency, and sustainability requirements, which “are increasingly more complex,” says Stieler.
And he recommends entrepreneurs in Ecuador first consolidate their product in the country, which will allow them to gain experience, and then expand to other markets.
