EuroCham Backs EUDR Delay, Citing Ethiopia’s Smallholder Coffee Compliance Risks

A European business lobby in Ethiopia is calling for a rethink of the implementation timeline for the European Union Deforestation Regulation (EUDR), backing a proposal from the EU Commission last week. The European Chamber of Commerce in Ethiopia (EuroCham), which represents nearly 180 European businesses, echoed sector concerns that practical solutions are needed for Ethiopia’s smallholder-driven coffee industry, in a statement issued today.

Originally scheduled for December 2024 and later postponed by a year, EUDR’s compliance deadline could be pushed back again. Under the current schedule, large and medium companies must comply by Dec. 30, 2025, while micro and small enterprises have until June 30, 2026.

The extension proposal by EU Environment Commissioner Jessika Roswall dated September 23, 2025, informed the European Parliament’s Environment Committee chair and the Danish Presidency that she intends to propose a one-year postponement. Her reasoning focuses on the readiness of the EUDR’s digital Information System, which underpins compliance monitoring.

According to the letter, tests over the past year indicate that the system is unlikely to handle the high volume of transactions, small-package imports, and compliance checks required. Without further development, she warned, the platform could face “unacceptable slowdowns or repeated disruptions,” jeopardizing companies’ ability to comply. As a result, the Commission is considering a new timeline that would push implementation out by another year, giving stakeholders, both inside and outside Europe, more time to adapt. 

EUDR requires that coffee and six other commodities be “deforestation-free” since Dec. 31, 2020, comply with national laws, and include a Due Diligence Statement (DDS) documenting geocoordinates and risk mitigation efforts. The DDS must include the geocoordinates of the plots and documentation showing that the producer has made reasonable efforts to assess and mitigate deforestation risk. 

Noncompliance carries fines, confiscation of goods, up to four percent of annual turnover as punishment, and a temporary ban from participating in procurement or tenders of the 27-strong Union.

For Ethiopia’s supply chain, which relies on nearly 95% of its coffee being sourced from smallholder farmers, an extension would provide a much-needed relief window. With Europe accounting for above 35% of the country’s coffee exports, meeting EUDR compliance requirements is critical to meeting any export targets as the commodity accounts for nearly a third of all merchandize exports. 

Despite Ethiopia’s Coffee & Tea Authority (ECTA) announcing a few initiatives to meet some of the compliance requirements, industry insiders believe traceability remains significantly out of reach. 

One well-placed industry insider suggested that compliance will not be achieved even with a year-long extension. He pointed out that several components of meeting the requirements need hefty resource allocation alongside clear definitions regarding categories of locally produced coffee.

“Traceability is a complex task, and much remains unaddressed,” he told Shega. “Our competitors will likely have an easier time.”

Unlike other major exporters such as Vietnam and Brazil, which have large commercial production structures, nearly all of Ethiopia’s coffee is sourced from small, fragmented plots of less than a hectare. This dispersed structure makes traceability, geolocation, and land-use verification far more complex to implement at scale. 

EuroCham bases its plea on this production reality. The Chamber further substantiated the existential threats to a small-holder coffee supply chain, which supports around 5 million Ethiopian farmers through field visits.

During a September mission to Keffa and Jimma, among two of Ethiopia’s key coffee-producing regions, EuroCham, together with EU diplomats and coffee sector representatives, observed that many smallholder farms are integrated into forested areas and rely on traditional methods, far removed from advanced digital tools. A structural problem that makes it considerably difficult to meet EUDR compliance requirements.

The delegates also emphasized that Ethiopia’s coffee is not part of the deforestation problem; it is part of the solution, and that policies intended to protect forests must not end up harming the smallholder farmers who have safeguarded them for centuries.

The Chamber also warned that high compliance costs could push producers to withdraw from European markets, potentially shifting exports to more flexible buyers in China or the Gulf region. 

The EU Commission has estimated that compliance-related costs for companies could range between $170 million and $2.5 billion annually. 

Since the EUDR was announced in 2023, Ethiopia’s response has been fragmented. In February 2024, a 2.2 billion Birr roadmap was announced, including a national steering committee of the Authority, the Geospatial Institute, federal and regional agencies, growers, and exporters, tasked with creating a district-level coffee database. That same month, JDE Peet’s and sustainability nonprofit Enveritas partnered with the Coffee & Tea Authority to map coffee farms for EUDR compliance, but no progress updates have been publicly released. In December 2024, the Authority also signed a deal with local tech firm Vulcan ICT to develop a digital traceability platform for supply chain tracking.