Ethiopian coffee is threatened by European deforestation regulations

Will Europeans have to do without Ethiopian coffee? The Horn of Africa country, where legend has it that coffee cherries were first discovered a thousand years ago and where their cultivation has become widespread since the 16th century, could be seriously hampered by new European Union (EU) regulations aimed at combating deforestation around the world, which aim to enter into force on January 1, 2025.

The law, passed in Brussels in 2023, applies in particular to soybean and palm oil crops, considered the two greatest threats to tropical forests. However, in a few months it will also force coffee importers to prove that their supply chains do not contribute to deforestation, using satellite data and geographical coordinates.

These regulations are of particular concern in Kaffa, the region where the coffee from which the drink takes its name, and throughout southern Ethiopia. Providing accurate geographic surveys is a challenge for approximately 5 million smallholder farmers: Internet coverage in villages is poor, land registries do not exist, and land disputes are numerous. According to several Ethiopian diplomats and exporters, it could take up to five years to adapt to the new European standards.

Buyers are already turning away

According to the Food and Agriculture Organization of the United Nations (FAO), approximately 10 million hectares of forests were lost worldwide between 2015 and 2020. As for the European Parliament, it estimates that food consumption in Europe, in particular palm oil and soya, is responsible for this. for 10% of global deforestation.

However, the contribution of coffee cultivation to the destruction of Ethiopia’s forests is actually very limited. “The vast majority grows in agroforestry systems. A few trees are being cut down, but this is a marginal phenomenon,” assured a connoisseur who has been living in Ethiopia for ten years and who wished to remain anonymous. “And 90% of growers comply with the regulations,” he estimated, emphasizing that few chemicals are used on plantations. However, if they are unable to provide importers with the necessary information, growers risk losing their main customers.

In addition, the EU will require full traceability from the moment the cherries are harvested and arrive on European soil. “Hundreds of farmers’ harvests are mixed during drying, washing and again at various stages of resale and transport. A single container of coffee on its way to Europe may contain beans from a thousand producers, which means it will provide a thousand GPS coordinates when it arrives in Europe, said Peter Horsten, an adviser to AgUnity, a platform that helps small farmers in emerging economies.

“More than half of Ethiopian exports to Europe are at risk,” he continued. “Importers will turn to farms in Brazil, for example, because it is easier to ensure traceability.” European companies whose imports do not meet the new standards face severe penalties, amounting to at least 4% of their sales in the EU. As a result, buyers are already turning away from Ethiopia. “I don’t see any possibility of purchasing significant amounts of Ethiopian coffee in the future,” Johannes Dengler, director of the German coffee roaster Dallmayr, told Reuters in an interview.

The country is trying to diversify its export base

Coffee, referred to as “black gold”, is revered in Ethiopia – coffee ceremonies are ubiquitous – and its export generates huge financial benefits. Coffee cherries are the main export product (37% in value) and the main source of foreign exchange. His main target is none other than Europe.

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“Of course we don’t want to lose our relationship with this market,” said Adugna Debela, director of the Ethiopian Coffee and Tea Authority. Although Ethiopia is a relatively marginal partner of the EU (accounting for less than 5% of its imports), foreign currency from Europe is crucial for Addis Ababa, which is plagued by an economic crisis marked by inflation and dollar shortages.

Brussels refused to grant the Ethiopian government an extension of the deadline, forcing it to announce a plan to modernize the coffee sector. Addis Ababa would like to finance this program with the help of international partners. An anonymous EU source indicated that funds from Brussels could be allocated to Ethiopia’s transformation if Abiy Ahmed’s government showed signs of good will: “Even compared to other African players, Ethiopia is lagging behind. It did not protect or regulate its supply chain. Is it the Europeans’ fault?

Faced with the EU’s lack of flexibility and the risk of a decline in its exports, the country of 120 million people has its back to the wall and is struggling to diversify its export base. While Chinese demand for coffee is seeing strong growth, it is for specialty and premium products, which are scarce in Ethiopia.

Dutch company JDE Peet’s, a leading European coffee roaster, is developing technology “combining satellite imagery and artificial intelligence” to determine from the air major deforested and non-forested areas before 2020. Theoretically, such a territorial division would make it possible to identify coffee production eligible for export to Europe and avoid the need for Ethiopia to begin a cumbersome manual survey procedure that would take several years. This system appears to be Addis Ababa’s last chance, but is not yet under consideration by European authorities and could deter importers.

Noah Hochet-Bodin (correspondent from Nairobi (Kenya))

Translation of the original article published in French on lemonde.fr; the publisher can only be responsible for the French version.