Cocoa demand is on the increase, which poses a threat to forests in the countries producing it. New EU laws seek to tackle ‘imported deforestation’ and the government of Côte d’Ivoire is partnering with the EU bank to rehabilitate its degraded forests for future generations
By Jane Feehan
Côte d’Ivoire is the biggest producer of cocoa in the world. When I moved to the West African country in 2019, I saw first-hand how Theobroma cacao, a species native to South America, has become an integral part of the economy. Cocoa generates over 40% of export revenue and its value chain employs some six million Ivorians.
The tragic reality of this expanded cocoa production, however, is that Côte d’Ivoire has lost a startling 60% of its forests in the last 25 years. The country’s remaining forests lie mainly in national parks and forest reserves, but even here, large areas have already been taken over by cocoa. This country’s identity centres on its natural capital and heritage: the symbol of the elephant, for example, is everywhere, but elephants have almost disappeared in the wild. The disappearance of its forests is an environmental loss that is even more profound, with far-reaching consequences for everything from soil fertility, watershed management and water quality, biodiversity, carbon stocks, and the loss of the vast range of goods and services people derive from forests and on which many rural poor depend.
But this may be about to change. A transformative decade has begun. Heralded by the Green Deal, the United Nations Decade on Ecosystem Restoration and spurred on by deepening concerns about the impacts of the cocoa value chain on forest loss and the welfare of the people – including children – who work in that value chain, the European Union is proposing two new pieces of legislation, which are expected to be approved in the middle of the year. And the government of Côte d’Ivoire is partnering with the European Investment Bank to finance a project to restock the country’s forests.
Cocoa on the increase
Côte d’Ivoire is a least-developed country ranked 162 out of the 189 countries on the UNDP Human Development Index, with almost a third of the population living below the poverty line. Its income from cocoa, along with cashews, bananas and coffee, define the country today.
Cocoa consumption is on the increase, despite the impact of the COVID-19 pandemic: reduced demand for craft or luxury chocolate products, combined with supply chain disruptions caused by COVID-19 restrictions. In the longer term, the global cocoa bean market is expected to grow at a compound annual growth rate of 7.3% from 2019 to 2025 to reach $16.32 billion. The chocolate industry had a retail market value of $106.19 billion in 2017 and is likely to grow to $189.89 billion by 2026. In purely economic terms, that’s good for Côte d’Ivoire, which accounts for 42% of world cocoa production.
But it carries terrible risks for the country’s forests. At current rates, all Côte d’Ivoire’s natural forests will be gone in 20 years.
New EU bank finance and EU laws to counter imported deforestation
That’s why the first of the two EU laws is so important. It concerns imported deforestation. With its imports of products such as cocoa, palm oil, meat, corn and soya, the EU contributes indirectly to about 10% of global deforestation. To prevent its considerable market power continuing to drive deforestation and forest degradation in other parts of the world, the EU aims to impose new rules on the provenance and traceability of a range of commodities, including cocoa. The second new law embeds sustainability in the EU’s corporate governance framework. That means corporate social and environmental responsibility with teeth.
The EU’s plans can make a big impact, because it’s the biggest importer of the cocoa produced by Côte d’Ivoire, importing 67% of the country’s cocoa beans. EU partners, including the European Investment Bank, member states and development agencies, have developed a Team Europe initiative to support sustainable cocoa in Côte d’Ivoire and focus collective efforts.
Meanwhile, the government of Côte d’Ivoire has developed an ambitious strategy to protect, rehabilitate and re-plant the country’s forests. This Stratégie de Préservation, de Réhabilitation et d’Extension des Forêts en Côte d’Ivoire is a comprehensive 10-year plan to tackle all facets of the challenge: from scaling up tree nursery facilities across the country, education and training, agroforestry, seed-collecting programmes for targeted wild and indigenous species, the involvement of the private sector, rehabilitation, replanting, and governance.
Following a series of orientation discussions, a European Investment Bank team of forest and financial specialists is exploring the best way for the Bank to contribute to the implementation and finance of the Ivorian government’s ambitious, transformative plan. We already mobilised technical assistance funding for the pre-appraisal and appraisal stage of the plan. Our ultimate financing would concentrate on capital-intensive structural investments, such as nurseries, infrastructure, equipment, afforestation and reforestation activities, as well as essential supporting activities such as studies and inventories and forest management plans.
The European Investment Bank brings a long-term perspective to the project that matches Côte d’Ivoire’s timeline. With the cocoa value chain under scrutiny, our investment helps Côte d’Ivoire secure its EU markets. It also supports Côte d’Ivoire in restoring its natural heritage. Some of the tree species to be planted will help meet local and regional short- and medium-term demand for forest and timber products, taking the pressure off the remaining forests. Others will be planted for future generations—the spectacular giants of the region’s forests, such as the awe-inspiring Fromager with its massive buttress roots and giant reach, or iconic high-value timber trees such as Tiama and Fraké, which have become rare in the wild. Such species take many decades to reach maturity, and they’re emblematic of the transformation which is underway. The growth of these rehabilitated forests is a development legacy that will outlive us all.
Jane Feehan is head of the European Investment Bank’s regional office for West Africa in Abidjan.