The European Union (EU) has introduced a series of new regulations that are set to significantly transform the global cocoa industry. These rules are primarily driven by the EU Deforestation Regulation (EUDR) and aim to promote sustainability throughout cocoa production and supply chains, addressing both environmental and social concerns.
Corporate Sustainability Due Diligence Directive (CSDDD)
Table of Contents
At the center of these regulatory changes is the Corporate Sustainability Due Diligence Directive (CSDDD). Under this directive, large EU companies with over 1,000 employees and global revenue above €450 million are required to identify and address risks related to human rights violations and environmental damage within their supply chains.
Non-EU companies earning more than €450 million annually within the EU are also obligated to comply.
Although smaller businesses are not directly bound by the directive, they are expected to feel indirect pressure from major buyers demanding transparency and compliance information.
The European Commission is currently proposing amendments to the CSDDD through an “Omnibus approach,” aiming to align it with other sustainability frameworks such as the Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy.
However, this proposal has sparked controversy as it would reduce the number of companies covered by up to 80%, limit obligations to direct suppliers, remove the climate transition plan requirement, and lessen penalties.
The proposal has not yet been officially adopted. Major corporations such as Ferrero, Mars, Nestlé, Unilever, Tony’s Chocolonely, Hershey’s, and Mondelez, along with several NGOs, are urging the EU to maintain the current stringent standards.
EU Forced Labour Regulation
In addition, the EU Forced Labour Regulation, taking effect in 2027, will apply to all products sold in the EU, regardless of their origin or stage of production. Detailed implementation guidelines are expected to be released by mid-2026.
Violations could result in product bans and financial penalties.
Implications for the Cocoa Sector
For the cocoa industry, these new regulations impose strict traceability requirements—an area where many supply chain actors still face challenges.
Nonetheless, this transition also presents an opportunity for proactive businesses to enhance transparency and sustainability practices, thereby gaining a competitive advantage.
A notable example is Bara Union (Côte d’Ivoire), a company pioneering transparency across its cocoa supply chain.
Warning for Vietnamese Exporters to Northern Europe
The EU’s new regulations — especially the CSDDD, EUDR, and Forced Labour Regulation — will soon be applied broadly, extending beyond cocoa to other agricultural and food products such as coffee, pepper, cashew nuts, fruits, seafood, and processed goods containing agricultural ingredients.
Vietnamese exporters should pay close attention:
-
Lack of traceability may lead to rejection at EU ports, particularly in Northern European countries with strict inspection regimes.
-
Incomplete documentation proving no use of forced labour or deforestation could result in exclusion from major buyers’ supply chains.
-
EU customers will increasingly demand proof of compliance, even from companies not directly subject to the regulations.
What Exporters Should Do Now
To stay competitive and maintain EU market access, Vietnamese exporters should:
-
Audit their supply chains to identify environmental and social risks.
-
Update operational and documentation systems to meet new EU sustainability standards.
-
Establish robust traceability and compliance frameworks in collaboration with suppliers.
-
Prepare early by developing the required records and risk management systems to demonstrate compliance readiness.
By acting now, Vietnamese businesses can not only safeguard their EU exports but also strengthen their brand reputation and leadership in sustainable trade.