Exporters urged to prepare for European Union Green Deal

MANILA, Philippines — Filipino exporters must begin preparations to comply with the European Union’s (EU) Green Deal requirements to remain competitive and facilitate smoother entry into global markets, according to the country’s leading exporters’ organization.

The Philippine Exporters Confederation Inc. said it is pushing for preparations to be made with some policies under the EU Green Deal set to take effect by this year and next year.

Through the EU Green Deal, the EU aims to transform the bloc into a modern, resource-efficient and competitive economy.

Michaela Summerer, associate expert at the Green and Inclusive Value Chains Section of the International Trade Centre said the EU Deforestation Regulation, which aims to ensure products sold in the EU do not contribute to deforestation, will take effect on Dec. 30 of this year.

The EUDR covers commodities such as cattle, cocoa, coffee, oil palm, rubber, soy, wood, as well as selected derived products such as chocolate, leather and furniture.

“(There is) an obligation on companies placing products on the market or exporting them to exercise ‘due diligence’ to ensure their compliance with these criteria. Operators need to provide the geolocation of (the) production site and a self-declaration, supported by relevant documentation, through the EU’s Deforestation Due Diligence Registry,” Summerer said.

The Carbon Border Adjustment Mechanism (CBAM), which imposes a carbon tax on imported goods in high-emission sectors such as steel, cement, aluminum, fertilizers and electricity, is expected to take full effect next year.

Of the affected sectors, Summerer said the Philippines exported around $22.5 million to the EU in 2023.

“Exporters to the EU will need to calculate the carbon emissions of their products and EU importers will be responsible for ensuring that their suppliers comply with the CBAM and providing the necessary carbon content documentation for imports,” she said.

She said the Ecodesign for Sustainable Products Regulation will also become applicable next year.

The ESPR establishes a framework setting requirements for the design of products, focusing on energy efficiency, recyclability, durability and reduction of hazardous substances.

These will cover energy-related products including household appliances, heating and cooling products, consumer electronics and lighting, textiles, furniture, building materials and packaging.

Summerer said that the products covered by the ESPR accounted for the largest exports of the Philippines to the EU, amounting to a total of $6.1 billion in 2023.

She said manufacturers, importers and distributors will have to provide the correct product labelling and meet the performance and environmental criteria before making their goods available in the EU market.

“The directive works by setting mandatory product standards, ensuring compliance through monitoring and enforcement and promoting extended producer responsibility to ensure product life cycle sustainability,” she said.

To prepare for the EU Green Deal, she said exporters need to understand their obligation and due diligence requirements. They must also collect relevant data, perform analysis, risk assessment and mitigation, as well as monitor and maintain accurate reporting.

“Proactive action (is) needed,” she said, noting that while suppliers to the EU may not have the reporting obligation under the respective legislation, they may be asked by their buyers for relevant documentation and evidence.

She also said forging partnerships will be needed to prepare and comply with the requirements.