EU tightens environmental regulations: Challenges for Thai businesses under green global trade rules.

Accelerating the enhancement of capabilities in... ESG Developing sustainability information systems and investing in environmentally friendly production processes are not merely business costs, but strategic investments to maintain and enhance the competitiveness of Thai entrepreneurs in the global marketplace sustainably.

In recent years, environmental issues have expanded significantly, particularly as they become part of the new rules of global trade and directly impact the competitiveness of businesses, especially in developed markets that place increasingly strong emphasis on environmental standards. One of the key drivers of this global trend is the European Union (EU), which has consistently promoted environmental measures, making them an integral part of its economic and trade policy.

According to data from the World Trade Organization (WTO), the EU currently has approximately 3,400 environmental measures in place, reflecting a policy direction aimed at raising environmental standards alongside international trade and investment. This action falls under the framework of the European Green Deal, a plan to drive the EU economy towards a resource-efficient system, with the goal of becoming the first region to achieve net-zero greenhouse gas emissions by 2593.

Under this strategic framework, the EU has gradually introduced numerous new laws and measures, covering areas ranging from carbon emissions and waste management to product and packaging standards, ESG transparency, and sustainability throughout the supply chain. These regulations are becoming a cost to entering the EU market and increasing the conditions for trading partners and businesses within the supply chains of EU companies.

One widely known measure is the Carbon Border Adjustment Mechanism (CBAM), which requires EU importers to purchase CBAM Certificates to offset embedded carbon emissions in their goods. This measure came into full effect on January 1, 2569.

Furthermore, there is the EU Deforestation Regulation (EUDR), a law prohibiting the import, sale, and export of products derived from deforestation. This regulation has recently been postponed by one year, with medium and large-sized businesses complying on December 30, 2026, and small businesses on June 30, 2027. However, beyond CBAM and EUDR, there are many other important measures that Thai businesses should urgently study and prepare for, as they may impact Thai exports in the future.

PPWR…Modern packaging must be eco-friendly and truly recyclable.

The first measure is... Packaging and Packaging Waste Regulation (PPWR) The PPWR (Package Restriction on Packaging) will come into practical effect in August 2569. The essence of the PPWR is to require all types of packaging, including inner packaging that comes into direct contact with products, as well as transport and e-commerce packaging sold in the EU, to be designed to be truly recyclable. Furthermore, the packaging must not contain heavy metals and hazardous substances such as lead, cadmium, and mercury exceeding specified limits.

Specifically, food packaging must be free of PFAS (polypropylene-containing aerosols), single-use packaging must be limited, and waste must be managed systematically at the end of its lifespan. Furthermore, in the next phase, the EU plans to mandate standard labeling on packaging clearly indicating its material composition to ensure consumers can properly sort waste according to EU standards. This includes increasing the proportion of recycled materials in plastic packaging, prohibiting the use of packaging that artificially increases volume (such as double-walled containers, bottle bottoms, or unnecessary layers), and setting a limit on empty space in packaging to no more than 40% of the total volume for certain product categories by 2573.

This regulation applies to a wide range of businesses, including exporters, manufacturers of goods, packaging manufacturers supplying exporters, and all related businesses throughout the supply chain. If packaging does not meet the specified criteria, the product will be banned from sale, its import suspended, or immediately recalled from the market.

EmpCo…The era of creating a positive image of environmental protection is over. Stop the greenwashing.

Another important measure is: Empowering Consumers for the Green Transition (EmpCo) Which is designedWe are here to protect consumers from being deceived by exaggerated environmental advertising. Greenwashing It will come into full effect in September 2569, requiring companies to provide transparent and verifiable information under key principles such as: Reliability The information must be reliable, accurate, and supported by scientific evidence. Relevance Information regarding the significant impact of the product must be provided. Clarity It must be clear, easy to understand, and unambiguous. Transparency The source of the data and the assessment methodology must be disclosed transparently. Accessibility Consumers need easy access to information. In the past, many companies have used sustainability-related advertising to build their product image.

This measure will tighten environmental claims, requiring statements to be supported by verifiable data and evidence. Key requirements include prohibiting the use of broad definitions without reference to EU standards, such as "eco-friendly" or "environmentally friendly," and prohibiting claims of carbon neutrality based on purchased certifications; companies must reduce greenhouse gas emissions through actual production processes only.

Purchasing a carbon offset is not eligible for carbon neutrality claims, and the use of self-created sustainability symbols is prohibited. Sustainability symbols must be certified by an external agency or a transparent verification system.

This measure reflects that sustainability in the new era is not just about marketing communication, but about verifiable data. Thai businesses need to prioritize the systematic collection of environmental data, as well as seeking standards or certifications from internationally recognized external agencies.

ESPR…Modern products must be sustainable throughout their life cycle.

Another important law under... European Green Deal คือ Ecodesign for Sustainable Products Regulation หรือ espr Sustainable Product Design Act The overall policy framework was announced in 2567, and in 2569, additional regulations regarding product standards for various groups were gradually introduced. The key aspect of ESPR is legislation that mandates sustainable design throughout the product's life cycle, from design and material selection to manufacturing, transportation, usage, and end-of-life management.

The ESPR principle has three key aspects:

1) Performance requirements: Design standards must ensure durability, ease of repair, reusability, and true recyclability.

2) Data Requirements: Many product groups must display key product information throughout their lifecycle via a Digital Product Passport (DPP), such as the origin of raw materials, manufacturing processes, carbon emissions, repair, recycling, and post-use management.

In the next phase, all goods sold in the EU will be required to have a digital passport, allowing customers to scan and verify product information. This will be gradually implemented across product groups, such as iron and steel, textiles, apparel, and toys. In the future, the EU customs system will automatically verify the information. Without a digital passport, goods will be detained or rejected for import.

And 3) the requirement to prohibit the destruction of unsold goods. The EU strictly prohibits the burning or burying of unsold or unused stock. Unsold goods must be disposed of in transparent and verifiable alternative methods, aiming to push manufacturers to take responsibility for their products and reduce overproduction. The first group to be subject to these regulations is clothing and footwear, before expanding to electrical goods and other categories in the future.

This requirement covers all brands sold in the EU. By 2569, large fashion and apparel companies will be prohibited from destroying excess stock and will be required to publicly disclose information on how they manage these goods. This will be extended to medium-sized companies in 2573. Small businesses will still be exempt to prevent them from incurring excessive business burdens.

CSRD…Raise the standards ESG To become mandatory.

In addition to measures related to products and the environment, the EU is moving forward in upgrading sustainability disclosure from a voluntary process to a strict mandatory requirement through the Corporate Sustainability Reporting Directive (CSRD). This directive mandates that companies systematically and transparently disclose sustainability information using European Sustainability Reporting Standards (ESRS) as a reporting framework, covering environmental, social, and governance (ESG) dimensions.

This regulation, which has been in effect since 2567 for large EU companies listed on stock exchanges, will be extended to foreign companies operating in the EU under specified conditions in 2570. Failure to comply may result in varying penalties depending on the relevant laws of each country, such as Germany's LkSG law which specifies fines of up to 2% of global revenue.

Although many Thai exporters may not be directly subject to this law, in practice, EU trading partners are increasingly requesting ESG information from suppliers. This includes data on carbon emissions, energy use, waste management, human rights, and sustainable business practices. Therefore, companies that can provide transparent and verifiable ESG data will have a competitive advantage in maintaining long-term business relationships and accessing trade opportunities with the EU.

For Thai businesses, the challenges posed by EU environmental regulations extend beyond increased compliance costs. They reflect the need for structural business transformation, encompassing everything from designing products and packaging to align with sustainability standards, selecting raw materials, managing energy, systematically collecting and disclosing ESG data, and establishing traceability systems throughout the supply chain.

However, amidst this pressure, there are also significant opportunities for Thai entrepreneurs who can adapt quickly. Global trade in the coming period is likely to prioritize sustainable supply chains. Entrepreneurs who can demonstrate tangible sustainability, possess reliable, transparent, and verifiable data to international standards, will have a competitive advantage in building trust with trading partners and increasing their access to green finance.

Ultimately, EU environmental measures may not only be a requirement for trading with the EU, but are becoming the new trade standard for businesses worldwide. Therefore, accelerating the enhancement of ESG capabilities, developing sustainability information systems, and investing in environmentally friendly production processes are not just costs of doing business, but strategic investments to sustainably maintain and build on the competitiveness of Thai entrepreneurs in the global trade arena.

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