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Ethiopia has just had the best year in its coffee history. In the financial year that ended in July, the country earned a record $3 billion from coffee exports, more than it has ever made before.
On 30 December, a new European Union rule comes into force that could lock a large share of that coffee out of one of its most valuable markets. Not because of how it tastes, but because of how hard it is to prove exactly where it was grown.
Over the past few weeks we've told the stories behind our Kenyan and Rwandan coffees. This week we go back to where coffee itself began.
Where it all started
Arabica coffee traces its roots to the highland forests of southwestern Ethiopia, where it still grows wild today. Every arabica you've ever tasted, whether from Brazil, Colombia or Indonesia, descends from plants that first grew in these hills.
Coffee in Ethiopia is still overwhelmingly a smallholder crop. Around four million farmers produce 95% of the country's coffee, most of them on plots of less than a hectare. Much of it grows in the shade of taller trees: some in natural forest, some in forest that farmers lightly tend, and a great deal in small home gardens alongside food crops. Large plantations are the exception rather than the rule.
From a distance, the hills around Yirgacheffe look thickly wooded. Up close, they are dotted with homes, each with its own patch of coffee growing among the trees.
A record year
Ethiopia's coffee authority credits the record $3 billion largely to high-quality and specialty coffee commanding better prices. Earnings were up from $2.65 billion the year before, and the government now has its sights on $6 billion a year within five years.
Few crops matter to a national economy the way coffee matters to Ethiopia's. It brings in roughly a third of the country's export earnings, and an estimated 15 million people depend on it for some or all of their living. Saudi Arabia, Germany and China were its biggest customers last year, and the European Union as a whole buys around 30% of Ethiopia's coffee exports.
The rule arriving on 30 December
That European share is where the trouble starts. From 30 December, the EU Deforestation Regulation (known as the EUDR) requires larger companies selling coffee in the EU to prove it was not grown on recently deforested land. In practice, that means supplying map coordinates for every plot the coffee came from.
For a single large estate, that is one boundary on a map. For Ethiopia, it means mapping millions of tiny farms, many without formal land documents. And because more than half of the country's coffee passes through local collectors and informal traders, cherries from many different farms are often combined long before anyone writes anything down.
A new study by ODI Global, a London-based think tank, puts numbers on the risk. Mapping a single farm costs $4 to $7, with verification adding up to $12 more. By mid-2024, only about a quarter of Ethiopia's coffee land had been mapped, and the national tracking system the government is building is not yet fully up and running. The study estimates Ethiopia could lose between $160 million and $453 million in export earnings, depending on how much coffee is shut out. Even if the excluded coffee finds other buyers, the lower prices on offer elsewhere could still cost the country $42 million to $118 million.
Ethiopia isn't standing still. Its coffee authority has launched a three-year national plan to collect farm data and track coffee digitally from plot to port. The open questions are whether it can be done in time, and who ends up paying for it.
The forest paradox
There is an irony at the centre of all this. Ethiopia grows much of its coffee in a way many conservationists would like to see more widely: under a living canopy, with the forest left standing. Yet the ODI study notes there is still uncertainty over how the EU will classify Ethiopia's traditional forest and semi-forest coffee.
The aim of the regulation is hard to argue with. Clearing forest for farmland is a major source of carbon emissions and wildlife loss, and coffee has played its part in some growing regions. The concern raised by the study is that the cost of proving compliance falls hardest on the smallholders least able to afford it. Exporters are already favouring farmers who are pre-certified, it found, leaving up to one in five smallholders at risk of being left out.
This one is close to home for us. Farm Africa, the charity we support with £1 from every kilo of coffee we sell, has spent years working with forest coffee communities in Ethiopia's Oromia region, helping cooperatives earn more from their coffee while protecting the forest it grows in.
What it means here in the UK
The EU rule does not apply in Great Britain, with one exception worth knowing: under post-Brexit trading arrangements, it will apply in Northern Ireland.
That doesn't mean the issue passes us by. In June, the UK government announced plans for its own scheme, which would require businesses to check that coffee and other goods are not linked to illegal deforestation. A consultation comes first, with legislation expected around 2027. And because so much of the coffee trade runs through European importers, detailed traceability is fast becoming the norm whichever side of the Channel the coffee ends up.
The more uncomfortable possibility is that coffee shut out of Europe goes looking for other buyers, at lower prices. If that happens, farmers lose out twice: once to the paperwork, and again on the price.
Knowing where your coffee comes from used to be a nice story to tell. Increasingly, it's what keeps farmers in the market at all.
Our Ethiopian coffees
We roast two coffees from Ethiopia, from different corners of the country. Brewed side by side, they show how much variety a single origin can hold.
Ethiopia Irgacheffe comes from Irgacheffe in the south of the country (the name has several spellings), one of the most celebrated coffee regions in the world. Ours is made up of heirloom varieties grown at 1,700 to 2,000 metres, local coffees that have adapted to these hills over generations. Irgacheffe is known for elegant, aromatic cups, and a pour-over is the best way to let that character come through.
Ethiopia Limu is shade-grown at altitude in Oromia, in the west of the country, close to the forests where arabica first grew. Expect bright fruit, tart pear and a clean finish of clove. It's a lovely cup from a cafetière on a cold morning.
Ethiopia gave the world coffee. Many of its farmers still grow it under the trees, on small family plots, much as their parents did. Between now and 30 December, the challenge is to prove that on paper. We'll be watching how it unfolds, and drinking their coffee while we do.
