Convergence Initiative inception workshop⎮ Photo:©️ Marguerite Papana/GIZ

The Ethiopian coffee sector stands at a crossroads as the European Union’s Deforestation Regulation (EUDR) approaches. Coffee exports make up 38% of Ethiopia’s export value, bringing in $1.43 billion annually. With 35% of Ethiopia’s coffee heading to European markets—Germany alone receives 25%—the economic implications of non-compliance are significant. This article explores how Ethiopia’s, forest-friendly coffee system can align with new traceability and deforestation standards, the challenges of implementing these standards for smallholders, and how sustainable practices and geospatial mapping are paving the way.

Ethiopia’s coffee industry stands at a pivotal moment as it prepares to meet the European Union’s upcoming Deforestation Regulation (EUDR). The Ethiopian Arabica coffee is grown under shade, in agroforestry systems and collected from local communities in the natural forests. These systems conserve the forest and sustain livelihoods of over 5 million smallholder farmers. While the EUDR’s traceability requirements highlight the value of this sustainable production model, implementing these proving mechanisms presents a significant challenge for Ethiopia.

A foundation of Ethiopia’s community-based forest coffee production is Participatory Forest Management, a community-based system initiated in the 1990s. This approach promotes responsible land use, allowing communities to harvest non-timber forest products like coffee without harming the ecosystem. By providing secure, forest-based livelihoods, with coffee due to its economic value playing a special role, Participatory Forest Management helps reduce deforestation and maintain biodiversity. Protecting biodiversity within Ethiopian coffee forests is especially important, as these forests harbor over 6,000 Arabica coffee varieties, which could be key to future climate adaptation in global coffee production.

The main challenges coming along with the EUDR are the traceability requirements. In Ethiopia’s highly fragmented coffee sector smallholders operate on small plots, making it difficult to track the coffee back to his origin at farm level. The high costs associated with implementing these standards at such a fragmented scale, raise concerns that compliance could pressure some producers toward non-shaded crops, which could drive deforestation—a counterproductive result that all stakeholders aim to prevent.

The Ethiopian Coffee and Tea Authority is leading efforts to develop a traceability system to comply with EUDR standards. The key proposal is to establish a centralized web-based platform that integrates crucial datasets. This platform would include coffee traceability records, geospatial data on coffee plots, forest management zones for forest-grown coffee, deforestation data, and environmental assessments for larger plantations. Given that many coffee farms are not yet connected to global markets, the approach will initially focus on farms already involved in exports, with a gradual expansion to include more producers.

GIZ’s Global Program “Sustainability and Value Added in Agricultural Supply Chains” is supporting Ethiopia’s path to EUDR compliance through its “FIT for FAIR” initiative. This program provides the Ethiopian Coffee and Tea Authority with financial and technical resources to develop the traceability system and introduce policy adjustments, enabling smallholders to meet EUDR standards.

Achieving EUDR compliance could strengthen Ethiopia’s position in sustainable coffee production, while non-compliance risks unintended negative consequences. Therefore, support from European stakeholders is crucial, particularly given Ethiopia’s smallholder-based, fragmented coffee sector. This collaboration is essential to ensure that the supply of “forest-friendly” coffee continues into the future.

Country DirectorsCountry DirectorsMeeting to Discuss Sustainability and EUDR Compliance

The Ethiopian Coffee and Tea Authority hosted GIZ country directors from South Africa, Sierra Leone, Cameroon, Zimbabwe, Senegal, and Namibia in October. The meeting focused on Ethiopian coffee production and export, particularly in relation to the European Union Deforestation Regulation (EUDR).

Adugna Debela, Director General of ECTA, shared that Ethiopian coffee production has grown from 4% to 11% over the past eight years. This increase in production is attributed to improved agricultural practices and rejuvenation and sustainable cultivation methods involving growing coffee under tree shade, reduce the risk of deforestation. On the export front, Ethiopia exports 300,000 metric tons of coffee annually, earning $1.43 billion. This represents an 11% increase in export earnings, largely due to the newly implemented vertical integration system and a strong focus on improving coffee quality.

During the discussion, the GIZ-implemented “Sustainability and Value Added in Agricultural Supply Chains in Ethiopia” project highlighted its efforts to raise awareness of the EUDR. The project provides financial and technical support to ECTA for developing a geospatial database system. Additionally, the project continues to focus on improving livelihoods and promoting equality in the coffee sector.

During the discussion, the GIZ-implemented “Sustainability and Value Added in Agricultural Supply Chains in Ethiopia” project highlighted its efforts to raise awareness of the EUDR. The project provides financial and technical support to ECTA for developing a geospatial database system. Additionally, the project continues to focus on improving livelihoods and promoting equality in the coffee sector.

Contact

Carolin Speckhahn, Project Manager of the Sustainability and Value Added in Agricultural Supply Chains in Ethiopia (SUVASE) Project