Ethiopian coffee sales to the European Union could suffer a revenue loss of between 160 and 453 million dollars if part of production remains outside supply chains that comply with the EU regulation on deforestation, according to an ODI Global study published on 16 October 2026. The high scenario corresponds to the exclusion of 57% of volumes destined for the European market.
The range remains an estimate, not a loss already recorded. It is based on a cautious scenario excluding 20% and a severe scenario excluding 57%, linked to gaps in plot geolocation and lot traceability. If volumes are redirected to Asia, ODI still puts the lost earnings at between 42 and 118 million dollars, as European buyers pay more for Ethiopian speciality coffee.
The stakes go beyond exporters alone. The European Union accounts for about 30% of the country's coffee exports, while the sector represents nearly 35% of merchandise export earnings. The report estimates that four million smallholder producers supply most of the harvest, and that a fall in foreign currency receipts could weigh on the birr, rural credit and the cost of imports.
The main obstacle lies in the fragmentation of production. Only about a quarter of plots had been geolocated by mid-2024, while 57.4% of marketed coffee passes through informal collectors, according to data cited by ODI. Ethiopia is developing a national traceability system, but it is not yet fully operational.
The regulation is due to apply to large companies from 30 December 2026, then to most micro and small operators from 30 June 2027, according to the European Commission. It requires the operator placing the product on the European market to establish that the coffee does not come from recently deforested land and complies with the rules of the country of origin.