Ethiopia's coffee sector has recently achieved remarkable milestones, with export revenues reaching a record US$2.65 billion in the 2024/25 fiscal year, surpassing targets by 147%. This growth is attributed to government reforms enhancing production and quality. However, the European Union's new deforestation regulations, effective January 2025, pose challenges for Ethiopian coffee exports. These rules require proof that products are not linked to deforestation, necessitating precise traceability. Given that many Ethiopian smallholders lack digital infrastructure and formal land registries, compliance is daunting. How can Ethiopia balance its impressive export growth with the need for environmental sustainability and compliance with international regulations? What strategies could be implemented to support smallholder farmers in meeting these new standards?