Esta especie es pequeña.

Because especie is a feminine singular noun, and the demonstrative has to agree with it.

• este = this, for masculine singular nouns
• esta = this, for feminine singular nouns

So:

• este libro = this book
• esta especie = this species

Agreement is a very common feature in Spanish.

In Spanish, noun gender is not determined only by the last letter. While many feminine nouns end in -a, plenty of feminine nouns end in other letters too.

Especie is simply a feminine noun, so it takes feminine words with it:

• esta especie
• la especie
• una especie pequeña

This is something you usually have to learn together with the noun: la especie, not just especie.

Es is the third-person singular form of the verb ser.

• ser = to be
• es = is

So in this sentence, es means is.

A few forms of ser are:

• soy = I am
• eres = you are
• es = he/she/it is
• son = they are

Here, esta especie is singular, so you use es.

Because adjectives usually agree in gender and number with the noun they describe.

Since especie is feminine singular, the adjective must also be feminine singular:

• pequeño = small, masculine singular
• pequeña = small, feminine singular

Compare:

• un animal pequeño
• una especie pequeña

The ñ is a separate letter in Spanish. It sounds roughly like the ny in canyon.

So pequeña is pronounced approximately like peh-KE-nya.

It is not the same as a plain n. For example:

• ano and año are different words
• pena and peña are different words

So the tilde on ñ is important.

In Spanish, adjectives often come after the noun, especially when they are simply describing a characteristic.

So:

• una especie pequeña = a small species

This is the most normal order here. Spanish can sometimes place adjectives before the noun, but that often changes the style, emphasis, or meaning. For a basic descriptive sentence, noun + adjective is the standard pattern.

Yes, but it means something slightly different.

• Esta especie es pequeña = This species is small
• La especie es pequeña = The species is small

So the grammar is fine in both cases, but esta specifically points to this species, not just the species in general.

No. They are different words.

• esta = this, feminine singular demonstrative
• está = is, from the verb estar

So:

• esta especie = this species
• está pequeña would not be the normal choice here

In your sentence, the correct word is esta with no accent mark.

Because ser is normally used to describe an inherent or defining characteristic, while estar is more often used for states, conditions, or location.

Here, small is describing the species as a characteristic, so ser is the natural choice:

• Esta especie es pequeña = This species is small

Using estar here would usually sound wrong or at least very unusual in normal Spanish.

Yes. Especie can mean species, but in some contexts it can also mean kind, sort, or type.

For example:

• una especie de error = a kind of error
• una especie de broma = a sort of joke

But in Esta especie es pequeña, the most natural meaning is the biological or general category sense: this species.

Normally, no. Modern standard Spanish usually writes it as esta without an accent, even when it means this one.

So:

• esta especie is correct
• ésta especie is not standard

Older materials may sometimes show an accent on demonstrative pronouns such as éste, ésa, aquél, but today the usual recommendation is no accent, except in very rare cases of ambiguity. In your sentence, definitely use esta.