‘PHL business must be ready for EU green initiatives’ impact’

AN International Trade Centre (ITC) expert has urged the Philippines to prepare its domestic business environment and micro, small and medium enterprises (MSMES) for the anticipated trade impacts amid the new European Union (EU) green initiatives.

Tobias Dolle of ITC stressed that it is critical that developing countries consult and coordinate with the EU on these green initiatives in order to enhance their respective domestic business environments and make them conducive to sustainable economic development, gender and diversity inclusion, and the effective participation in trade by MSMES.

Dolle was quoted in a report by the Philippine Exporters Confederation, Inc. (Philexport) on April 29.

In recent years, The EU has launched a number of broad and extensive green initiatives toward climate neutrality, all of which involve various specific regulatory initiatives. They are expected to result in major trade impacts for developing economies trading with the EU, including the Philippines.

In an online presentation, Dolle touched on three of these new initiatives, which are comprehensive, interconnected but distinct: European Green Deal, Farm to Fork Strategy, and Fit for 55 Package.

The European Green Deal, presented by the EU in December 2019, includes a set of policy initiatives meant to make the EU’S economy sustainable, more circular and climate-neutral by 2050.

“It has massive implications for businesses, leading to both changes in production and supply chain strategies around the world,” said Dolle.

The Fit for 55 strategy seeks to deliver the EU’S 2030 climate target by reducing emissions by at least 55 percent by 2030 from 1990 levels on the way to climate neutrality by 2050.

This strategy covers a wide range of proposed legislative initiatives, such as but not limited to, revising the EU regulation on land use, revising the energy efficiency directive, and revising the renewable energy directive.

Particular initiatives under the Fit for 55 that will have a major impact on trade for businesses in developing countries in the future were highlighted by Dolle.

One of these is the EU Proposal for a Sustainable Products Regulation (EcodesignDirective), which anticipates rules to make almost all physical goods on the EU market friendlier to the environment, circular, and energy efficient throughout their whole lifecycle, from the design phase through to daily use, repurposing, and end-of-life.

Under this proposal, all regulated products will have Digital Product Passports, to make it easier to repair or recycle products and facilitate tracking of substances of concern along the supply chain.

The regulation will allow the EU to set new labeling requirements, for instance, on reparability.

The Fit for 55 Strategy was published in March 2022, and according to Dolle, a public consultation will be launched as the legislative process is now ongoing.

He said the ability of developing countries’ policymakers and private sector operators to timely, effectively, and successfully engage in the relevant fora can be improved through dedicated capacity building and technical support from development partners.

“Consultation and coordination is also vital as it will serve to attract investment and support economic recovery after the Covid-19 pandemic,” Dolle said.

Other examples of specific legislative initiatives under the European Green Deal are the EU Directive on Single-use Plastics, EU strategy for sustainable textiles, legislative proposal for substantiating green claims made by companies, and a sustainable products policy initiative including a revision of the Ecodesign Directive.

Meanwhile, the EU’S Farm to Fork (F2F) Strategy, which is part of the EU Green Deal, aims to redesign current food systems to become fair, healthy and environmentally friendly. It will highlight good agricultural practices, food security, and food safety.