Expansion of the OECD Trade Facilitation Indicators in the area of environment

2. Environment-related TFIs: Scope, interpretation and caveats

Environment-related measures can affect border processes in different ways. They may require traders to provide information on the composition, origin, production process, use or end-of-life treatment of a product; to obtain permits, licences, certificates or conformity documents; or to comply with controls involving customs and other specialised agencies. From a trade facilitation perspective, the focus is not on assessing the environmental scope of these measures, but how they are operationalised and enforced at the border: whether requirements are transparent, documents and data can be submitted efficiently, agencies co-operate effectively, and controls are risk-based, predictable and non-duplicative.

To make sense of the wide range of environment-related requirements, this work uses the product environmental lifecycle as an organising lens (Box 1 and details in Annex A). Environmental compliance and traceability issues may arise at several points: raw material extraction, input processing, production, transport, use and end-of-life management. The lifecycle lens helps identify what types of information may be needed, where it is generated, which border agencies and regulators may be involved, and how this information can be transmitted and verified at the border. It is therefore used as a practical analytical tool to structure the assessment of trade facilitation challenges and solutions.

Box 1. Key segments of a product’s environmental lifecycle

The environmental lifecycle of a product comprises environmental impacts occurring during three main segments: production, use, and end-of-life (Figure 1).

The production segment encompasses all activities related to sourcing raw materials, production of inputs, and the transformation of these inputs into intermediate or final goods. It involves actors such as suppliers, farmers, manufacturers, and processors.

In contrast, the use and end-of-life segments refer to the movement of goods from producers to intermediate and end users – i.e. consumption and disposal or recycling of products (Figure 1). In the context of environmental policies, each segment presents distinct challenges and opportunities.

Policies targeting production activities often aim to reduce environmental impacts of a product’s supply chains. Measures targeting use and end-of-life stages generally focus on promoting consumption of more environmentally friendly products, end-use efficiency, and responsible waste management (i.e. circularity, recycling, and recovery of reusable inputs).

Figure 1. Key segments of the product lifecycle

Note: The “production” segment, as discussed in the text above, encompasses the materials extraction (1) manufacturing (2) and distribution (3) steps in the figure. The “use” segment aligns with step (4) in the figure, while the “end-of-life” segment aligns with step (5) in the figure.

Source: Adapted from information made available by: US Environmental Protection Agency (EPA), Sustainable Materials Management Basics | US EPA; European Commission, Life Cycle Assessment & the environment Footprint methods.

The env-TFIs build on the OECD’s long-standing economy-wide TFIs. Since 2013, the OECD TFIs have measured economies’ trade facilitation frameworks across core policy areas such as information availability, advance rulings, appeal procedures, fees and charges, formalities, automation, risk management, and border agency co-operation (Box 2). The env-TFIs apply this same trade facilitation logic to a more specific question: whether trade facilitation systems are equipped to handle environment-related requirements in an efficient, transparent, non-discriminatory and co-ordinated manner.

Box 2. Using the OECD TFIs to monitor and support policy reforms

The 11 OECD’s Trade Facilitation Indicators (TFIs) are each composed of several specific, precise and fact-based variables related to existing administrative processes at the border and their implementation in practice (e.g. the average time between publication and entry into force of new or adjusted trade-related regulations, the proportion of trade transactions that can be processed in advance of the arrival of goods at the border, or the coverage of certified trader programmes).

The OECD TFIs cover the full spectrum of border procedures for more than 160 economies across different income levels, geographical regions, and levels of development. The 11 TFIs cover four main policy areas.

Transparency and predictability areas

• TFI (A) Information availability: Publication of customs and trade-related regulations and information, feedback mechanisms, and specific functions for businesses (e.g. dedicated webpages/portals, user manuals).

• TFI (B) Involvement of the trade community: Structures, guidelines, and frameworks for consultations between border agencies and traders or other relevant stakeholders on proposed or amended trade-related regulations.

• TFI (C) Advance rulings: The rules and processes applying to prior statements by the administration to requesting traders concerning, for example, the classification, origin, and valuation method applied to specific goods.

• TFI (D) Appeal procedures: The possibility and modalities to appeal administrative decisions made by border agencies.

• TFI (E) Fees and charges: Disciplines on the fees and charges imposed on imports and exports.

Automating and streamlining procedures areas

• TFI (F) Documents: Harmonisation and simplification of trade-related documents in accordance with international standards.

• TFI (G) Automation: Aspects such as the electronic acceptance of data and use of automated risk management.

• TFI (H) Procedures: Aspects such as the streamlining of border control (inspections, clearance), implementation of single windows for trade, or certified trader programmes.

Border agency co-operation areas

• TFI (I) Internal border agency co-operation: institutional frameworks, mechanisms, and IT systems for domestic co-operation between various border agencies.

• TFI (J) External border agency co-operation: institutional frameworks, mechanisms, and IT systems for co-operation between various border agencies with neighbouring economies and other trading partners.

Governance and impartiality areas

• TFI (K) Governance and impartiality: transparency of customs structures and functions, as well as accountability and ethics policies.

The indicators can help policymakers in developed and developing countries alike to assess the state of their trade facilitation efforts, pinpoint challenges and identify opportunities for progress. They also support governments’ ability to mobilise technical assistance and capacity building in a more targeted way.

In this sense, the env-TFIs complement the economy-wide TFIs. The economy-wide indicators assess the overall quality of trade facilitation frameworks. The env-TFIs zoom in on the interface between those frameworks and implementation of environment-related requirements. For example, where information on trade procedures is available online, the env-TFIs ask whether relevant environmental permits, licences, certificates or compliance procedures are also covered. Where a Single Window or digital customs system exists, they ask whether environment-related documents and data requirements are integrated. Where border agency co-operation mechanisms are in place, they ask whether the authorities responsible for environment-related controls are effectively included.

The env-TFIs therefore measure the degree to which implementation of environment-related requirements is embedded in mainstream trade facilitation systems. They capture whether such requirements are visible to traders, whether related documents and data can be submitted through streamlined and paperless channels, whether relevant agencies exchange information, and whether controls are organised in a risk-based and predictable way. Their focus is operational: how environmental requirements are handled at the border, and whether this handling supports traceability and compliance without generating unnecessary procedural frictions.

In simpler terms, the economy-wide TFIs ask whether the trade facilitation “infrastructure” exists; the env-TFIs then ask whether the implementation of environment-related requirements is connected to that soft infrastructure. For this reason, the env-TFIs score would not exceed the corresponding economy-wide TFI score – they show how far environment-related requirements are integrated into existing trade facilitation systems; if a trade facilitation tool is not available in the general border system, it cannot be considered available for environment-related procedures.

In addition, a higher env-TFI score should not be read as evidence that a country has more ambitious or more effective environmental regulation. It indicates that, where environment-related requirements exist, they are more fully integrated into trade facilitation frameworks. Conversely, a lower score does not necessarily imply weaker environmental policy. It may indicate that environment-related procedures are managed outside mainstream trade systems, rely more heavily on manual or fragmented processes, or involve agencies that are not yet fully integrated into border co-operation mechanisms.

This distinction is central to the interpretation of the indicators. The env-TFIs are not designed to identify environmental goods, circular economy goods or other products for the purpose of receiving preferential treatment at the border. Nor do they assess the appropriateness, stringency or environmental impact of specific regulations. Their purpose is to show whether broad trade facilitation reforms – transparency, automation, risk management, streamlined formalities and agency co-ordination – also support the efficient handling of environment-related requirements. In doing so, they remain consistent with the principle that trade facilitation should improve border processes in a non-discriminatory manner.

Figure 2. How to interpret env-TFIs

The env-TFIs provide a practical diagnostic tool to help identify where trade facilitation systems are already capable of supporting environment-related traceability and compliance, and where gaps remain. Their value lies in showing whether environmental information, documents, agencies and controls are properly incorporated into border processes. This is increasingly important as environmental regulations and traceability demands extend across product lifecycles, requiring reliable flows of information between firms, regulators and border agencies. The env-TFIs offer a way to assess how trade facilitation can support environmental objectives while preserving efficient, predictable and well-functioning trade procedures.

Figure 2 provides a simplified guide to interpreting the env-TFIs. It shows that the indicators focus on three main dimensions: transparency and predictability, automation and streamlining, border agency co-operation, all translating to border enforcement in practice. Across these areas, the common question is whether environment-related requirements are effectively integrated into trade facilitation systems and border processes for the purposes of effective implementation.