The Dark Side of Coffee

Originally published April 30, 2025 on Eats by Liwen.

Forest cleared for agriculture (from Perfect Daily Crime)

"To be quite honest, I've never thought much about the environmental impact of coffee," admits coffee aficionado Joseph Castagno, who drinks at least one cup every day. He was shocked to hear the pace of deforestation was equivalent to 20 football fields every minute. Even more unknown to him was that a seemingly innocent product, coffee, is the sixth-biggest driver of global deforestation.

The reason follows quite a logical chain of reasoning. Regions where coffee is growable are scarce because it requires specific altitude and soil composition. Combine that with a continuously growing demand for coffee. Demand is at a 6-year high, up 5.7% from 2019, according to the International Coffee Organization's (ICO) 2024 annual report.

Coffee prices have doubled in the past year with no sign of return. Climate change causes droughts, floods, and high temperatures, which the finicky coffee plants don't fare well against. This limits the supply of coffee.

Since soaring prices haven't curbed demand at all, naturally there is no incentive for this cycle to stop. On December 30, 2024, the European Union Deforestation Regulations (EUDR) decided to break the cycle. They mandated that any EU market products containing coffee, wood, cattle, cocoa, soy, palm oil, or rubber must prove that they are deforestation-free.

Map showing the countries with greatest coffee intake. By World coffee consumption, World Resource Institute (2012), Visual from ChartsBin

Europe is the largest consumer of coffee by continent, at 30% of the world's coffee consumption according to ICO, so this would shake the coffee industry. Despite the expected backlash, they fought to push this mandate out. Their bold step trailblazed an example to the rest of the world, a powerful message to other countries to encourage them to follow their lead.

Could the U.S. also pitch in?

It would surely help. The U.S. is the world's largest coffee importer, responsible for 13% of the world's coffee consumption. If they successfully establish a similar mandate, then 44% of the coffee exports would be traceable back to non-deforestation sources. It would force global suppliers to adapt to these stricter environmental standards if they wanted to have a chance at capturing this market.

Of course, any person would nod enthusiastically at the idea of more sustainable agricultural practices, but they would nod just as enthusiastically for lower coffee prices. Unfortunately, you can't have your cake and eat it too. Let's explore how feasible it would be to implement a similar regulation.

The U.S. has a reputation as a fiercely capitalistic society, which inherently means that there is little motivation for a regulation that prioritizes environmental sustainability over economic growth, especially one that could increase prices for all sides.

Companies won't ignore their own interests and take these profit losses without a fight. The past provides a hint of what response to expected.

Earthsight, a non-profit environmental investigation organization, reported that when the EU began establishing this mandate, it was opposed by lobbyists and politicians, funded heavily by the industry players. They succeeded in stalling the law from passing for an entire year, and their efforts are ongoing. Opponents push for amendments that weaken this law, creating loopholes that could undermine protections for forests.

The ironic part of all this bickering is that the money spent on opposition could have been directed to complying with the mandate with little to no cost to their profits.

Profundo, a research foundation, found that EUDR compliance would reduce the revenue of a large coffee by only 0.03-0.07%. For the end consumer, the differences are almost unnoticeable at 0.018%. In theory, a $6 cup of coffee would cost an extra tenth of a penny!

There are a few reasons the cost of compliance is so low. One is because coffee supply chains are inherently simple. Coffee's finicky temperament means that only 50 countries have the climate to produce enough coffee to export, and the top three producers represent half of the world's coffee farms.

The roasting operations of Vent Coffee Roasters. Photo from Paul S. on Foursquare.

The final product is also structurally simple. The only product a roaster imports is the green coffee beans and there are very few steps between the farmer and the roaster. Sarah Walker, the owner of the Baltimore-based Vent Coffee Roasters, says that "it would be very easy to trace the origins of their beans, sometimes to the exact plot on the farm."

Another reason why the impact is so low is because the target audience for coffee is unique. Some coffee houses often already pay a premium to alleviate fair trade and sustainable farming concerns. Coffee is also a type of luxury commodity so people are willing to pay a premium price for it.

In theory, there is a market advantage for a coffee roaster's beans to be traceable, since consumers have already been expressing interest in transparency. The problem with this theory is that in practice, most people don't prioritize this.

Barista Ash, who works at Vent Coffee Roasters, says that he's never had someone ask about the origin of their coffee beyond the country it is from, and that's to figure out the taste of the coffee. Even as a coffee lover himself, he says, "My main focus is on quality, and the other aspects are a secondary thought, but it is still nice to have." That's the perspective of someone who is affiliated with coffee as a living. The average consumer, like Joseph, says that he has never even thought to ask.

Though Profundo claims the financial burden of compliance for coffee companies is minimal, they don't address how additional regulatory demands would impact the price of goods.

To comply, farms must apply for certification to prove that they use non-deforestation practices, and this will certainly cost them money. Walker says that some beans, though organic, are not allowed to be advertised as such if they lack the certification.

"The USDA organic label costs a couple thousand dollars for the farm, and this isn't worth it to smaller farms." If coffee farms need to get certified to prove they are deforestation-free, the price of coffee is likely to increase.

It is common for roasteries to decouple their business from material costs. Sarah's strategy is to "price[s] her beans formulaically, dependent on the price of the beans [she] gets them for." This way, if she pays more for the raw material, her profit margins remain unaffected; however, higher prices can affect the number of customers.

"Maybe a price increase will result in people seeing buying a cup of coffee as more of a treat instead of a routine, like how most people dine out infrequently," Sarah speculates. "I'm all for better practices, and a greener globe, but the truth is that we will expect lower sales if the price of coffee rises too high. This may mean I would have to scale down my operation, and that's hard on everyone."

At the end of the day, a regulation in the US similar to the EUDR would have to originate from demand by consumers, but this is unlikely. There are only so many issues that a person can choose to care about, and the average customer in the U.S. is unlikely to prioritize a deforestation-free coffee over affordability.

Even if a regulation were established, the burden would fall disproportionally on smaller, independent farms and small business coffee roasters, which would be unfair. The hope is that one day the world will be better positioned to prioritize sustainability issues and the demand for regulation is enough to sustain the backlash.

Sarah reflects "At the end of the day, there are many issues we care about, so we must pick our fights. People will fight for different issues for a better world, and we will all be resilient enough to adapt."