Filipino exporters are urged to prepare for compliance with the Green Deal policies’ sustainability requirements to increase their competitive advantage in the European Union (EU) market and make it easier for them to penetrate other markets globally.

During the recent EU-Philippines Partnership Conference, Michaela Summerer, associate expert at Green and Inclusive Value Chains Section of the International Trade Centre (ITC), said the European Green Deal comprises over 50 policies, initiatives, and legislative proposals in support of the vision of a climate-neutral region.

Summerer particularly cited the EU Deforestation Regulation (EUDR), which will become applicable on Dec. 30, 2025; the Carbon Border Adjustment Mechanism (CBAM) which is expected to become fully effective from 2026; and the Ecodesign for Sustainable Products Regulation (ESPR), which is also expected to be applicable from 2026.

She said the EUDR prohibits the placing or making available on the EU market, as well as the export from the EU, of certain commodities and products unless they are deforestation-free and have been produced in accordance with relevant legislation of the country of production.

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

Exercising due diligence

“(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,” she added.

Summerer said CBAM imposes a carbon tax on imported goods in high-emission sectors such as steel, cement, aluminium, fertilizers and electricity, based on the carbon intensity of their production.

She said that of the affected sectors, 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.

Report carbon content

Summerer said exporters have to report their carbon content and pay a fee based on the difference between their country’s carbon price and the EU’s.

Moreover, Summerer said the ESPR is framework legislation enabling subsequent concrete design requirements for products focusing on energy efficiency, recyclability, durability and reduction of hazardous substances through delegated acts.

These will cover energy-related products including household appliances, heating and cooling products, consumer electronics and lighting; textiles; furniture; building materials and packaging, among others and introduces a digital product passport, she said.

Summerer said ESPR covers an array of product categories, including many products under Harmonized System Chapters 84 and 85, which combined are the largest exports of the Philippines to the EU, equalling $6.1 billion in 2023.

She said manufacturers, importers and distributors shall ensure correct product labeling and meeting the performance and environmental criteria before placing them on 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 added.

To decode the EU green deal policies, Summerer said they need to understand their obligation and due diligence requirements; collect relevant data; perform analysis, risk assessment and mitigation; and monitor and maintain accurate reporting.