The Ethiopian Coffee and Tea Authority (ECTA) says more than 99 per cent of the country’s coffee farms are deforestation-free, disputing concerns raised in a recent study by ODI Global about Ethiopia’s preparedness to comply with the European Union Deforestation Regulation (EUDR).
The Authority said a nationwide assessment of coffee-producing areas, combined with digital farm mapping, producer registration and supply-chain traceability initiatives, has strengthened Ethiopia’s capacity to verify the geographical origin and environmental compliance of its coffee exports.
ECTA Director General Adugna Debela told Capital that concerns about the potential exclusion of Ethiopian coffee from international markets did not adequately reflect recent progress in establishing a digital system to track coffee from individual farms through processing, storage and export.
In its report, The Case of EUDR in Ethiopia: How to Secure Climate, Trade and Development Goals, and Overcome Risks of Market Exclusion, ODI Global warned that gaps in farm geolocation and traceability could expose Ethiopian smallholder farmers to significant trade risks.
The Authority, however, maintains that recent mapping and traceability efforts have substantially improved the country’s readiness to meet EU requirements.
National Mapping Effort
Adugna said preparations have been guided by an integrated national roadmap developed following the announcement of the regulation. The initiative focuses on mapping coffee farms, registering producers and establishing systems to verify the origin of exported coffee.
Primary agricultural cooperatives and regional unions have worked with their members to map individual farm plots, while exporters sourcing directly from producers have collected geographical data from their supply areas.
For independent smallholder farmers outside cooperative structures and existing exporter initiatives, the Authority said it has worked with international development partners, including the Food and Agriculture Organization of the United Nations (FAO), the United Nations Development Programme (UNDP) and the United Nations Industrial Development Organization (UNIDO).
Ethiopian coffee is predominantly cultivated under traditional agroforestry systems, including forest and semi-forest environments where coffee plants grow beneath or alongside indigenous trees.
The Authority argues that the country’s mapping initiatives have helped address data gaps and strengthened its ability to demonstrate compliance with environmental requirements in destination markets.
Digital Traceability Platform
A central component of the strategy is a digital traceability platform developed with support from German Development Cooperation (GIZ).
According to ECTA, the platform is operational and designed to enable buyers, regulators and auditors to trace coffee from its place of origin to export.
It records where coffee is grown, how and where it is processed, and the companies or entities handling it along the supply chain.
The system is intended to help importers verify whether shipments meet EU requirements concerning geographical origin, deforestation and applicable production laws.
ECTA said European buyers in key markets, including Germany, Italy, France, Belgium and Switzerland, have been granted access to relevant data to verify their supply chains against EUDR requirements.
Under the regulation, businesses placing covered commodities on the EU market must demonstrate that their products were not sourced from land deforested after December 31, 2020, and comply with applicable local laws and due-diligence requirements.
Under the revised implementation timetable cited by the European Commission, the regulation is scheduled to apply to large and medium-sized operators from December 30, 2026, while most micro and small enterprises will have until June 30, 2027.
ODI’s Concerns
In its research, ODI Global warned that Ethiopia’s dependence on smallholder farmers, fragmented supply chains and incomplete farm geolocation data could leave producers vulnerable to the new EU standards.
The London-based think tank estimated that Ethiopia could lose up to US$453 million in coffee export revenue under a worst-case scenario involving exclusion from the EU market.
It identified farm mapping, traceability and legal documentation as major compliance challenges for smallholder producers.
The report said that, as of July 2024, geographical data had been collected for approximately 200,000 hectares, representing about 23 per cent of the targeted 860,000 hectares of coffee-growing land.
It also estimated that traceability gaps could affect up to 57 per cent of the supply chain, potentially putting a substantial share of Ethiopia’s approximately four million smallholder coffee farmers at risk of losing access to the European market.
According to the study, diverting coffee excluded from the EU to alternative markets could still result in net losses of between US$42 million and US$118 million because of lower prices outside Europe.
The report further warned that up to 60 per cent of smallholder coffee producers could face exclusion if compliance problems remain unresolved, potentially causing economic damage equivalent to as much as 0.5 per cent of Ethiopia’s gross domestic product.
ODI acknowledged that Ethiopia’s traditional coffee production systems generally maintain substantial tree cover and biodiversity. However, it cautioned that these environmental advantages do not automatically satisfy the regulation’s technical requirements for digital traceability and documentation.
ECTA Disputes Findings
ECTA disputes the extent to which the study reflects current conditions, arguing that its findings do not fully capture recent investments in farm mapping and digital registration.
The Authority said the underlying data were collected one to two years ago and that the study’s preparation and publication timelines prevented it from incorporating more recent implementation progress.
Ermias Engida, a macroeconomic modelling and value-chain analysis research consultant involved in the study, cautioned against interpreting the report as a definitive assessment of the country’s current readiness, saying its primary data were collected more than a year ago.
Speaking to Capital, Ermias said Ethiopia has continued to make progress in strengthening its institutional, technical and digital capacity since the research was conducted.
He emphasised that the findings reflected conditions observed during the study period rather than the country’s present level of preparedness.
According to Ermias, the Ethiopian government has demonstrated strong policy commitment through coordinated institutional efforts, the development of a three-year National Action Plan and the establishment of a National Steering Committee in early 2024.
Investments in digital traceability infrastructure, particularly the Ethiopian Coffee Traceability Management System (ECTMS), alongside farm-level geolocation mapping and land registration initiatives, have also contributed to the country’s compliance efforts.
However, the research identified three major challenges: incomplete geolocation mapping, difficulties in tracing coffee through complex supply chains, and gaps in land-legality documentation and compliance financing.
As of July 2024, approximately 200,000 hectares, representing 23 per cent of Ethiopia’s estimated coffee-growing area, had been mapped.
Meanwhile, the sector’s dependence on millions of smallholder farmers, product aggregation and multiple intermediaries has made it difficult to trace exported coffee back to individual production plots.
Ermias said the ECTMS had not been fully operationalised at the time of the research, while exporters and processors faced substantial costs associated with mapping, verification and traceability systems.
He noted that subsequent developments have demonstrated progress. In October 2025, the ECTMS underwent successful end-to-end functional testing in Shebedino Woreda, Sidama, while government institutions and development partners continued consultations to improve coordination and interoperability among traceability systems.
Compliance, Not Deforestation
Ermias stressed that Ethiopia’s principal challenge is not necessarily deforestation in coffee production, but the technical and administrative capacity to demonstrate compliance with the regulation.
Ethiopian coffee is predominantly produced under shade trees in garden, forest and semi-forest systems. As a result, environmentally sustainable farmers could face exclusion from European markets if they cannot provide the documentation and traceability information required under the EUDR.
He cautioned that compliance requirements could impose disproportionate burdens on smallholders unless accompanied by adequate technical assistance, financial support and incentives.
The researcher also warned that EUDR-related risks could extend beyond coffee exports into the wider economy.
Reduced export earnings could weaken borrowers’ repayment capacity, constrain bank lending, reduce foreign-exchange availability and intensify macroeconomic pressures.
He argued that managing these risks should therefore be treated not only as a trade and environmental policy priority, but also as part of Ethiopia’s broader financial-sector risk management and macroeconomic stability agenda.
While supporting the EUDR’s environmental objectives, Ermias called for an inclusive and proportionate implementation approach that protects forest resources without unnecessarily excluding smallholder farmers from international markets.
“The report released recently was completed over a year ago and should not be viewed as a newly conducted study from this year,” he said.
Practical Challenges Remain
Despite the Authority’s confidence in recent progress, earlier reporting by Capital highlighted the practical difficulties Ethiopia faces in aligning its traditional coffee production systems with the regulation.
An industry expert and major coffee buyer, speaking to Capital on condition of anonymity in an earlier report, said Ethiopia’s production model differs significantly from plantation-based systems used in some other coffee-producing countries.
The expert argued that Ethiopian coffee has traditionally been cultivated beneath shade trees in indigenous forest and semi-forest environments, meaning the principal challenge is not necessarily deforestation but the difficulty of documenting the origin of every shipment across complex supply chains.
Farmers who have preserved these landscapes for generations could face compliance difficulties if their production and land-use records do not meet the EU’s digital documentation requirements.
The European Commission has also acknowledged the need to support Ethiopia’s preparations. In response to a parliamentary question, the Commission said technical assistance had been mobilised for an EUDR preparedness assessment by the European Forest Institute.
It also said the EU-Coffee Action for Ethiopia project had been repurposed to support government-led compliance efforts.
Further assistance is planned to strengthen digital traceability systems and expand rural land certification in coffee-producing areas.
Export Ambitions
Ethiopia’s efforts to protect access to the European market come as the country seeks to expand coffee exports and diversify its international buyers.
According to figures attributed to ECTA, coffee export earnings exceeded US$3 billion in the 2025/26 fiscal year, which ended in July 2026, accounting for more than 30 per cent of the country’s total export revenue.
Production during the fiscal year was estimated at 11.56 million bags, equivalent to approximately 694,000 metric tonnes, while exports reached about 7.13 million bags.
For the 2026/27 production cycle, the country has set a target of 550,000 tonnes, or approximately 9.16 million bags, with an export-revenue goal of US$4 billion.
Alongside efforts to maintain access to Europe, ECTA said it is pursuing a market-diversification strategy to reduce dependence on a limited number of destinations.
Following legal reforms that opened the coffee export sector to foreign investors, international companies, including Chinese firms, have obtained investment permits, business licences and certificates of competence to operate in Ethiopia.
ECTA confirmed to Capital that up to 10 foreign companies are operating directly in the country, purchasing coffee from local exporters and producers for overseas markets.





