PEN-CP Observatory on Green Customs, Circular Economy, and Sustainability Developments
Setting the scene
Governments at the international, EU and national level are making ambitious plans - such as the Paris Agreement, the European Green Deal, and Circular Economy Action Plan - to address circular economy and sustainability challenges. Developments such as the Carbon Border Adjustment Mechanism, the proposal for the new Battery Regulation, the proposal for Regulation on deforestation-free supply chains, the proposal for the Eco-design for sustainable products regulation, and the Critical Raw Materials Act are just a few of the many examples where monitoring for circularity and sustainability is enhanced. All this is expected to introduce new regulatory requirements, for example regarding the percentage of recycled materials in new products or the requirement that products brought to the EU market must not cause deforestation. These regulations also define the role of digital infrastructures and digital product passports that can contribute to better availability of information about products and materials.
Customs already has some responsibility regarding sustainability and the environment, e.g. the Regulation on FLEGT licensing scheme for imports of timber; the Regulation aimed at establishing a community system to prevent, deter and eliminate illegal, unreported and unregulated fishing; the Regulation on substances that deplete the ozone layer; and the CITES, Convention on International Trade in Endangered Species of Wild Fauna and Flora. It is not yet entirely clear how customs will be affected by the new regulatory developments related to circular economy and sustainability. But customs will certainly continue to play an important role when goods are moved across borders. From the customs risk management standpoint, these new regulatory developments will affect a wide array of products and require data sources and detection technologies and innovations that can allow analysis, not only at a product level, but at the level of the material composition and the provenance of these materials.
How can customs cope with such new challenges? Customs is already investing in innovations including the use of external business data sources for customs risk management, and the development of advanced detection technologies. Investing in customs' current innovative solutions for addressing safety, security, and revenue collection challenges in traditional and eCommerce streams will establish a strong foundation for customs to effectively tackle future challenges related to the Circular Economy monitoring. A good understanding of the regulatory, business, and technology developments that happen outside of customs now in the area of circular economy and sustainability, will certainly help customs prepare for the future. And from a policy perspective, the EU Customs reform proposal sets an ambitious vision about the role that customs can play with respect to Circular economy and sustainability and about new approaches that will enable truly data-driven customs.
Sector specific initiatives
Sector-1: Timber and deforestation-free supply chains
(includes platforms & initiatives that may be relevant for customs or supply chains aiming to show transparency)
Provisional political agreement between the European Parliament and the Council on an EU Regulation on deforestation-free supply chains
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World Forest ID is creating the world's largest collection of physical samples of forest risk commodities, including timber, to facilitate the determination of species and location of harvest for products traded globally. The samples are analyzed using different chemical and biological techniques and data is added to a global open source reference hub that is designed to empower enforcement officials to objectively scrutinize supply chains and traceability claims. Science-based scrutiny of this sort is possible because plants have chemical, anatomical and genetic features which change across landscapes; meaning that comparison with reference data developed at scale can be used to (in-)validate a declared location of harvest or origin, facilitating investigations and prosecutions.