Vietnam's Coffee Sector Adapts to EU Deforestation Regulation
Vietnam's coffee industry is undergoing significant changes to align with the EU Deforestation Regulation (EUDR), emphasizing farm-level adaptations to decrease emissions and improve traceability. The Nescafé Plan is pivotal in this transition, with experts viewing the EUDR as both a challenge and an opportunity to enhance the value of Vietnamese coffee.
Phạm Phú Ngọc, director of the Agricultural Development Programme and Nescafé Plan in Vietnam, noted that Nestlé is focusing on three key areas: EUDR compliance, reducing its carbon footprint, and implementing regenerative farming practices. The Nescafé Plan organizes these practices into three main pillars: soil health, efficient water use, and biodiversity.
Farmers are encouraged to maintain ground cover, limit tillage, and mow instead of using herbicides, actions that enhance soil fertility and water retention while reducing glyphosate residues in exports to the EU and US. The program also advocates for simple tools to track soil moisture and optimize irrigation. Nestlé collaborates with the Western Highlands Agriculture and Forestry Science Institute (WASI) on drought-tolerant varieties, aiming to extend irrigation cycles to 40–60 days, potentially cutting water use by 40–60% if trials are successful.
Intercropping, agroforestry, and multi-layer canopies are promoted to provide shade, stabilize microclimates, reduce pests, and diversify farmer incomes. Ngọc emphasized building farmer capacity rather than dependence, supported by a network of about 300 farmer leaders and reference farms. Nearly 500,000 farmer attendances have been trained in sustainable methods, resulting in household incomes increasing by 30–150% and average yields rising from about 2 tonnes to 3–3.7 tonnes per hectare.
Nestlé and WASI have supplied over 100 million seedlings to rejuvenate more than 100,000 hectares of aging coffee plantations. With more than 23,000 participating households, expected to reach approximately 26,000 by the end of 2026, the program has mapped over 40,000 plot polygons to delineate farm boundaries and ensure compliance with EU rules against post-cutoff deforestation.
Polygon data is managed on a digital platform, cross-referenced with cadastral records and current land-use maps for EUDR risk assessments. Comprehensive traceability now spans from farms and buying points to factories and final customers.
According to Tô Xuân Phúc, executive director of the Forestry Policy, Finance and Trade Programme at Forest Trends, stricter environmental regulations worldwide signify a crucial turning point for the coffee sector. Phúc highlighted that EUDR and net-zero targets are now pressing requirements, advocating for the integration of traceability, emissions reductions, and regenerative farming into a unified strategy to maintain EU market access and develop a low-emission Vietnamese coffee brand globally.
Vietnam exported approximately 1.1 million tonnes of coffee in the first half of 2026, generating $4.78 billion, as reported by the Ministry of Agriculture and Environment. The volume rose by 9.7%, yet the value decreased by 14.4% due to a drop in average export prices to about $4,435 per tonne. The EU accounts for over 40% of Vietnam's coffee exports, benefiting from a 0% tariff under the EVFTA.
