Indian coffee may be rewarded under EUDR norms since it is shade-grown, and it means no deforestation took place, said sustainability software and management platform Snowkap co-founder and CEO Rajesh Patel.

“Coffee is an export item, but a lot of Indian coffee is shade grown, which makes arabica quite distinct. From an EU Deforestation Regulation (EUDR) perspective, there is an opportunity to recognise and reward this. Whether for historical reasons or economic reasons or both, Indian coffee, especially from the South, comes from shade-grown sources, which means no deforestation took place,” he told businessline in an online interaction. 

Shade-grown coffee cultivation assists in forestry conservation. So it’s a multi-dimensional challenge. “I think the phyto or pharmacological plantation supply chain may also come into EUDR. Globally, 60 per cent of inputs into pharma can be traced back to trees, plants and shrubs. In the Indian context, there are close to 10,000 phytosignificant trees and plants,” he said.

Some dilutions

Unless there is any notification from the EU, the EUDR will come into force for large companies in December and for small companies the middle of 2026. 

Stating that sustainability around geopolitics is changing, he said that certain dilutions have taken place in the EUDR implementation. “It is not such a bad thing. We have to move forward on the assumption that these deadlines are real,” said Patel.

A lot of Snowkap customers are taking the EUDR issue seriously and have begun the due diligence process – one to assess their supply chain readiness for the implementation. 

Snowkap, a platform-driven technology-based solution provider, enables organisations to traverse their sustainability journey with their carbon emissions being measured and reduced.”We also provide services to our customers to get the measurement done and the mitigation processes initiated,” he said.

Assessing supply chains

On the EUDR front, he said some firms are assessing their supply chain readiness, and the requirements are quite significant. “For example, if a company is sourcing natural rubber from South-East Asia, are geo data to identify precise locations from which it is arriving? Are sellers prepared to share the data, which could be proprietary? All these challenges are being identified today,” said the company’s co-founder.

A few companies have begun implementing these norms as a dry run, and there is “some degree of outreach, though not enough” on supplier sensitisation, he said. 

Hoping that EUDR becomes an inevitability, as some legislative actions are needed, with global deforestation becoming a challenge. “Roughly, 40-42 million hectares of forest lands are deforested annually. A fair amount of it can be attributed to the commodities covered by EUDR. Adequate technical trading restrictions need to come in if those commodities come from deforested areas,” said Patel.

Some of the tyre companies such as JK Tyres and Yokohama, have done fairly advanced work in EUDR preparation. With India being a net importer of rubber, India could pick up an EUDR-like framework and ensure some diligence is done regarding where natural rubber comes from for export as tyres or other goods.  

Other challenges

Soyabean, palm oil, cocoa, cattle and wood are some of the other categories that will be impacted by EUDR.  On the challenges companies face in EUDR implementation, he said the entire value chain faces some challenges.

“EUDR requires for its implementation traceability of information. You need GPS data, need locational data, where is every piece of what you exported coming from? Implementing geosystems and geotagging systems is not easy. 

“The second one is documentation. So, the availability, authentication and traceability of these documents is not easy. The underlying problem is training and willingness.  The supply chain is complicated. The sophistication and training are less as you go down the value chain. How do you solve that problem? That’s another problem that is there,” he said. 

Incentives, variants of commodities and interpretations are other challenges. Snowkap helps its customers understand the maturity within their organisations. 

Measuring carbon emissions

On challenges to trade due to sustainability, Patel said, though it is a mixed bag, everyone realises that beyond the responsibility to the planet, the responsibility to their stakeholders requires some efficiencies. But there are benefits such as shifting to solar power, renewables and electric vehicles. 

“… undoubtedly, there is an irreversible movement and sustainability is now irreversibly coming into global trade. That itself has a knock-on effect,” he said. 

On measuring carbon emissions, Patel said his company has brought artificial intelligence (AI) into the whole data capture process. “If our customers provide us with basic documents such as invoices, delivery challans, purchase orders and so on, we can extract a lot of the quantitative data that we need to reverse engineer and calculate the emissions,” he said.

The company reaches out to its vendors and trains them on how to use the platform by providing the required data sets. 

On helping customers trade in carbon emissions, Patel said that before trading takes place, companies have to authenticate that their emissions have been reduced. 

“Trading can only happen if you have reduced or avoided emissions. There is a voluntary market and there is a compliance market. The compliance market in India today is quite well taken care of. But the voluntary market has a lot of potential, and we persuaded our customers to investigate and invest there,” the company’s co-founder and CEO said.

Published on April 14, 2025