Will Europeans have to do without Ethiopian coffee? The country in the Horn of Africa where, according to legend, coffee cherries were discovered a thousand years ago and where their cultivation became widespread from the 16th century, could suffer severely from the new regulations of the he European Union (EU) to combat deforestation worldwide, which is due to come into force on January 1, 2025.
The law, passed in Brussels in 2023, particularly targets soya and palm oil crops, identified as the two greatest scourges for tropical forests. But in a few months, it will also require coffee importers to demonstrate that their supply chains do not contribute to deforestation, supported by satellite data and geographic coordinates.
This regulation is particularly worrying in Kaffa, the region of origin of coffee which gave its name to the drink, and throughout southern Ethiopia. For the approximately 5 million small farmers, providing precise geographic surveys is a challenge: Internet coverage is weak in the villages, the land register is non-existent and land conflicts are legion. According to several Ethiopian diplomats and exporters, the steps to be taken to comply with the new European standards could take up to five years.
Buyers are already turning away
Around 10 million hectares of forests disappeared each year worldwide between 2015 and 2020, according to the Food and Agriculture Organization of the United Nations (FAO). The European Parliament estimates that food consumption in Europe, particularly palm oil and soya, is equivalent to 10% of global deforestation.
But coffee cultivation does little to destroy Ethiopian forests. “The vast majority grows in agroforestry, a few trees are cut down but it is marginal,” assures an expert, living in Ethiopia for a decade, who wishes to remain anonymous. “And 90% of producers respect the regulations,” he estimates, emphasizing that few chemical inputs are used in the plantations. Unfortunately, without being able to provide this necessary information to importers, growers risk losing their main customers.
In addition, the EU requires full traceability between the time the cherries are harvested and their arrival on European soil. “The harvests of hundreds of farmers are mixed during drying, then during washing, and again during the different phases of resale and transport. In a coffee container en route to Europe, you can have beans from a thousand producers, which means you would have to provide a thousand GPS coordinates upon arrival in Europe,” quips Peter Horsten, advisor at AgUnity , a platform to help small farmers in emerging economies.
“More than half of Ethiopia’s exports to Europe are at risk,” he continues. Importers will turn to farms in Brazil, for example, because it is easier to carry out traceability work there. » If their imports do not comply with the new standards, European companies face heavy sanctions, representing at least 4% of their turnover within the EU. Result: buyers are already turning away from Ethiopia. “I don’t see how we can acquire large quantities of Ethiopian coffee in the future,” says Johannes Dengler, an executive at German roaster Dallmayr, in an interview with Reuters.
The country is struggling to diversify its outlets
Described as “black gold”, coffee is the subject of a real cult in Ethiopia – coffee ceremonies are omnipresent – ??and its export generates immense financial profits. Coffee cherries represent the main export product (37% in value) and the main source of foreign currency. Its main destination is none other than Europe.
“We obviously don’t want to lose the relationship with this market,” reassures Adugna Debela, director of the Ethiopian Coffee and Tea Authority. If Ethiopia is a relatively marginal partner of the EU (representing less than 5% of its imports), foreign currencies from Europe are vital for Addis Ababa, plunged into an economic crisis marked by inflation and shortage of dollars.
Brussels refused to grant a deadline to the Ethiopian government, pushing the latter to announce a plan to modernize its coffee sector. Addis Ababa would like to finance it with the help of international partners. A source within the EU indicates, anonymously, that funds from Brussels could be allocated to the Ethiopian transition if the government of Abiy Ahmed gives guarantees of goodwill: “Ethiopia is late, even compared to other African actors. It has neither protected nor regulated its supply chain. Is it the Europeans’ fault? »
Faced with the inflexibility of the EU and the risk of seeing its exports fall, the country of 120 million inhabitants has its back against the wall. It is struggling to diversify its outlets. Although Chinese demand for coffee is growing strongly, it concerns specialty and superior quality productions, which are poorly represented in Ethiopia.
The main European roaster, the Dutch JDE Peet’s, is developing a technology “which combines satellite images and artificial intelligence” to determine from the sky the large areas that are deforested, or not, before 2020. This territorial division would, in theory, make it possible to identify the coffee production eligible for export to Europe and would prevent Ethiopia from initiating a cumbersome manual survey procedure, which would take several years. This system appears to be the last chance for Addis Ababa. However, it has not yet been studied by European authorities and could scare off importers.
