Key points:
- Germany plays a major role in the global coffee trade as both an exporter and importer, with strong domestic consumption.
- Coffee exports earned USD 3.2 billion for the German economy in 2024, most of which comes from roasted coffee processed by local industry.
- Climate change is already disrupting the ecosystem services that underpin agricultural production, increasing economic risk across global food supply chains, including for the coffee industry.
- Germany imports nearly all of its green coffee directly from producing countries and over 98% of Germany’s coffee imports are classified as highly or moderately vulnerable to climate change.
- Climate finance can support agricultural supply chains by improving on-farm resilience that reduces yield loss from climate shocks and improves yield efficiency. As well as supporting farmers, this also supports coffee processing in the value chain and helps to keep prices down for consumers.
- Germany is a major provider of climate finance through its overseas development aid contributions and via state bodies GIZ and BMZ, which invest in adaptation projects.
- In Ethiopia, for example, German climate finance has helped to improve farmers’ livelihoods while also stabilising Ethiopian-origin coffee imports and improving market access for German businesses.
Germany is a key hub in the global coffee market
Germany is a major player in the global coffee market, both as a leading importer of green (unroasted) beans and a leading exporter of roasted coffee, while also satisfying a sizeable domestic market – the fourth largest globally – worth EUR 20 billion a year.
Coffee exports generated USD 3.2 billion for the German economy in 2024. While some of this is re-exported to neighbouring countries, most is roasted coffee, worth USD 2.09 billion, making Germany the world’s third-largest exporter of roasted coffee by value. This local value addition is driven by the country’s sizeable roasting industry, which generates over 20% of the EU’s roasted beans. The country is home to a number of major coffee companies, including the world’s largest coffee trader, Neumann Kaffee Gruppe (NKG), which, according to Bloomberg, handles one in every eight beans consumed worldwide.
This local industry relies exclusively on imported inputs, largely from smallholder farms. Germany was the second-leading importer of coffee in 2024, and the top importer of green coffee in Europe, with over 90% of this originating directly from producing countries.
Climate change is threatening coffee supply chains, driving price hikes for consumers
The ecosystem services on which the coffee industry relies, such as clean water and air, weather regulation and pollination, are threatened by climate change. The Inter-American Development Bank expects that climate change will reduce the land suitable for growing coffee by 50% by 2050.
Numerous scientific studies have outlined the risks of climate change on coffee production and its stakeholders. Climate impacts on coffee farms can cause supply shocks that propagate through the supply chain to roasters, retailers and consumers. Leading coffee traders, including Germany’s NKG, have recognised the self-interest argument in protecting against the resulting crop failures, delayed harvests, disease outbreaks, and changing microclimates.
Already, adverse climate conditions have resulted in surging coffee prices globally, including a nearly 40% increase on average in 2024 due to climate-related supply-side disruptions in producing countries. Deutsche Welle reports that roasted coffee prices for German consumers in 2025 increased 43% from 2024 due in large part to climate stressors.
Germany’s coffee industry is highly exposed to climate-vulnerable supply chains
To understand the scale of exposure to climate risks in Germany’s coffee industry, we mapped the coffee-producing countries supplying Germany against their ND-GAIN climate vulnerability ranking, which assesses countries’ vulnerability to the impacts of climate change and adaptation readiness.
This revealed that over 98% of Germany’s coffee imports1By both weight (98.54%) and value (98.03%) of imports. originate from countries classified as highly or moderately vulnerable to climate change.2Countries were classified into four vulnerability categories based on their ND-GAIN index scores using a standard deviation (SD)-based approach from the mean (mean = 49.6, SD = 10.6) using a ±0.5 SD. “High vulnerability” for scores below mean − 0.5 SD (approximately <44.3), “medium-high vulnerability” for scores between mean − 0.5 SD and the mean (44.3–49.6), “medium-low vulnerability” for scores between the mean and mean + 0.5 SD (49.6–55.0), and “low vulnerability” for scores above mean + 0.5 SD (>55.0). This poses significant revenue risk to German roasting companies, such as Tchibo and Dallmayr, which rely on these countries to supply green coffee beans.
Brazil and Vietnam – both classified as having medium-high climate vulnerability – provide over 58% of Germany’s green coffee beans, of which more than 40% comes from Brazil. This exposes Germany to supply volatility. Brazilian coffee export volumes dropped by 20.8% in 2025, while its value simultaneously rose by 24.1%.
Vulnerability to price shocks from concentrated sources will rise as European coffee stockpiles decline, further making the case for diversifying suppliers
Stockpiles of coffee beans act as an insurance policy against climate-induced supply shocks by providing a backup supply when crops fail, which helps keep prices steady. A report from the European Coffee Federation shows that European coffee stockpiles declined by 37% between January 2022 and February 2025, and have not yet recovered since a supply squeeze in 2023.
As coffee prices remain elevated on the back of adverse weather events, the likelihood of rebuilding stockpiles appears to be falling. Reuters reported in early 2025 that, according to a coffee broker, companies are “buying only what is necessary for the moment and eschewing stockpiling” due to climate-induced supply constraints driving up prices.
The loss of stockpiles makes it more important to build resilience in existing trade sources and also diversify coffee sources to minimise supply disruptions.
A set of guidelines published by the European Union under the European Food Security Crisis preparedness and response Mechanism underscores that diversification of import sources enables stable supplies and prices for consumers. By ensuring raw inputs, such as coffee beans, are sourced from a wide variety of trade partners, the share of the EU food industries exposed to local crises in origin countries is reduced.
Climate finance can stabilise coffee trade with established partners while strengthening less developed trade relationships, supporting Germany’s coffee market.
Climate-focused investments ultimately translate into more stable supply chains and consumer prices in two primary ways. First, strengthening on-farm resilience through methods such as adaptation, agroforestry and producer capacity can reduce yield loss from climate shocks and improve resource efficiency, maintaining supply levels. Second, import sources can be diversified by applying these methods in areas with weaker trade relationships, alongside targeted support for farmers’ market access, reducing exposure to climate-induced supply disruptions in other regions.
Adaptation funding for climate resilience in Brazil, for example, would help combat the estimated 8% decline in overall coffee yields expected in the second half of the century due to climate change.3Based on 2009-2018 baseline. Further, climate finance in Africa can help improve the diversity of German coffee sources by strengthening weaker trade partnerships. East African coffee growers currently account for about 11% of Germany’s coffee imports,4East African green coffee producers with green coffee imports into Germany are Ethiopia (5.88%), Uganda (3.22%), Kenya (1.154%), Tanzania (0.78%), Rwanda (0.17%) and Burundi (0.11%) but these countries are also highly vulnerable to climate change and have limited domestic resources for adaptation measures. Providing financial support to these countries could increase their market share in Germany’s coffee sector, a win-win.
A 2023 analysis by Climate Focus on international public climate finance flows to sustainable agriculture and family farmers found that Germany has been one of the biggest funders of sustainable agriculture in recent years, alongside bodies such as the EU and World Bank.
Reports from the OECD and IPCC show that adaptation finance is most effective when delivered directly to local, grassroots and rural communities, such as farmers and farmers’ organisations, due to their more nuanced understanding of climate hazards and vulnerabilities.
However, smallholder farms – which make up 80% of global coffee production – continue to experience a lack of financing, which acts as a major barrier to food system adaptation. A report from Family Farmers for Climate Actions finds that smallholder farmers receive 0.36% of the needed adaptation finance due to barriers such as complex and time-consuming application requirements and expensive application fees.
Germany is already a leading provider of climate finance
Germany is a top provider of official development assistance (ODA), ranking second among the OECD’s development assistance committee (DAC) in 2024 with an expanding share dedicated to climate finance. In 2022-2023, 48% of its total bilateral allocable ODA (USD 11.8 billion) targeted climate-related objectives, up from 33.3% in 2020–2021. Germany’s percentage of ODA dedicated to climate action has a nearly 14-point lead over the DAC average of 34.8%.
In 2024, Germany’s international climate finance reached €11.8 billion, including mobilised private capital leveraged through public funds, outsizing non-climate-focused ODA commitments in nearly all areas.
Changing geopolitical realities have resulted in a sustained fall in ODA since 2024, with OECD’s preliminary data for 2025 ODA showing a 23.1% decline in DAC spending. The majority of this is related to the US pullback from global aid, with other major economies, including Germany, also reducing ODA to make space in the budget for defence spending.
Germany’s ODA has fallen year-on-year since 2022, taking Germany’s contribution below the international target of 0.7% of gross national income. Despite this decrease, Germany remains a significant donor in 2025, becoming the largest overall contributor among DAC for the first time and ranking sixth for ODA as a percentage of gross national income (GNI). VENRO, the Association of German Non-Governmental Organisations for Development Policy and Humanitarian Aid, has urged the country to adhere to its voluntary commitments, warning that failure to follow through will undermine efforts to confront the climate crisis.
German climate finance in Ethiopia’s coffee sector is helping to safeguard the future of Germany’s coffee supply – and the livelihoods of hundreds of smallholder farmers
One example of the way in which adaptation finance can be deployed in sectors with mutual benefits for local communities and German businesses is to support coffee farmers to protect and renew coffee-growing areas. A project to restore the Yayu Forest Biosphere Reserve ran from September 2018 to June 2025 with funding of EUR 1.5 million from the German government’s International Climate Initiative (IKI).
The Yayu Forest Biosphere Reserve is the origin of Arabica coffee and a genetic reservoir for wild coffee. The project helped smallholder farmers sustainably maximise coffee yields on their existing land by providing training in Good Agricultural Practice (GAP). These techniques included agroforestry, natural fertilisers, and pruning techniques, which can double harvests.
The initiative facilitated crop and income diversification, improved coffee processing and storage, and improved market access for hundreds of farmers. During the project’s lifetime, 11,905 coffee seedlings were planted, and 3,815 old coffee trees were rejuvenated. This increases coffee output and land-use efficiency and protects future harvests from climate risks – working to both stabilise Ethiopian-origin coffee and improve access to Ethiopian beans by German businesses.
Beyond these impacts, the project targeted resilience in key ecosystem services essential to agriculture, including soil quality, water purification, and regulation, and biodiversity – notably coffee biodiversity, which is essential for maintaining coffee yield stability worldwide.
German climate finance around the world helps to expand opportunities for coffee producers and strengthen future supply chains
Similar projects include the EUR 13.4 million Coffee++ initiative in Indonesia, Côte d’Ivoire, the Philippines and Thailand, funded by Nestle and Germany’s GIZ5Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) is a federal enterprise that works with international organisations, the scientific and academic community, civil society and the private sector on behalf of the German government. under an integrated development partnership. The programme aims to improve climate resilience in the coffee industry through regenerative and agroforestry techniques.
GIZ also funds the EUR 65.55 million Sustainable Agriculture for Forest Ecosystems (SAFE) in Brazil, Burundi, Cameroon, Congo, Ecuador, Indonesia, Peru, Uganda, Vietnam and Zambia, targeting the promotion of deforestation-free value chains for many agricultural products, including coffee, helping smallholders comply with the EU Deforestation Regulation and maintain legal market access in Germany.
The German Federal Ministry for Economic Cooperation and Development (BMZ) has also funded the Global Coffee Platform (GCP) since 2017. In December 2025, the platform announced a EUR 2 million partnership with the private sector and the BMZ-funded Sustainable Agricultural Supply Chains Initiative (SASI) to support sustainability initiatives in Kenya and Uganda. These initiatives target rehabilitation, rejuvenation, and agroforestry with the goal of improving climate resilience and bringing new producers into German supply chains.
