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

3. From lifecycle-related border challenges to env-TFIs measures

This section examines the challenges that arise at the border over the various stages of the product environmental lifecycle described above and explores how trade facilitation measures can address them. This framing highlights how these different stages interact with border procedures and relevant regulatory requirements.

Mapping lifecycle-related border challenges

The production segment

A relevant area in which trade facilitation measures could support environmental objectives on the production segment is the verification of imported products’ compliance with relevant regulations based on non-product-related processes and production methods (NPR-PPMs).

NPR-PPMs concern how a product is made, but do not alter its physical features. Regulations based on NPR-PPMs include requirements for producers to meet certain environmental process standards or comply with specific (environmental-related) certification schemes.1 For example, carbon border adjustment mechanisms or deforestation-linked regulations target the NPR-PPMs used to produce or manufacture goods, but do not alter the physical characteristics of the goods themselves. These regulations aim at reducing the embedded environmental impact of the production segment in the lifecycle of a product. This can include, for instance, curbing carbon emissions generated during the manufacturing processes of specific goods, or prohibiting that an agricultural product was produced on land linked to recent deforestation.

Compliance with regulations based on NPR-PPMs is therefore not directly observable at the point of entry, yet it must often be verified at the border. Unlike product standards that affect a good’s physical characteristics, customs authorities cannot measure upstream environmental impacts by inspecting the good itself. Compliance must instead be demonstrated through supporting documentation. This places a heavier reliance on upstream data, certifications, and traceability systems, and often involves actors and institutions far removed from customs procedures.

Environmentally related regulations based on NPR-PPMs also raise the challenge of documentation complexity and heterogeneity. They often rely on third-party certifications or prior validations stored in databases outside customs. Such documents vary in format, scope, and content, and are often not designed with the needs of customs administrations in mind. As a result: (i) traders must often navigate divergent rules across jurisdictions, adapting to different reporting formats or accepted verification bodies; (ii) customs and border agencies may face challenges related to the lack of guidance, legal mandate, or digital capacity to verify or interpret these documents effectively, leading to delays or inconsistent enforcement.

Risk management frameworks of customs and other border agencies are becoming increasingly relevant to border processes as environmental compliance criteria gain importance, but may require further adaptation. Existing selectivity tools typically focus on safety, security, or revenue concerns, less so on verification of environmental criteria. Integrating environmentally related NPR-PPMs data into customs’ risk analysis systems would require both policy adjustments and significant data infrastructure upgrades, including the identification of trusted data sources.

Finally, inter-agency co‑ordination becomes essential as compliance with regulations based on NPR-PPMs moves beyond the remit of customs alone. Environmental authorities, trade ministries, or conformity assessment bodies2 (which can be either public or private) are increasingly required to specifically collaborate on shared responsibilities for verification and enforcement of environmentally related NPR-PPMs. Without clear institutional mandates and interoperable systems between relevant agencies, there is a risk of duplication, gaps, or conflicting procedures at the border.

OECD (2025[2]) highlights that environment-related regulations account for a large share of recent regulatory activity, with around two-thirds of new environmental and social measures specifying border processes. However, only half define new documentary requirements and only around one-quarter specify the requirements for platforms underpinning the collection and delivery of information. The mechanisms for border agency co-operation appear less covered in related implementation guidance.

The use segment

In the use segment, trade facilitation intersects with environmental objectives primarily through its role in enabling the diffusion, affordability and deployment of environmental goods and technologies across borders. A growing body of analytical work highlights that challenges at the border – ranging from classification ambiguities and documentation requirements to fragmented conformity assessment procedures – can significantly raise trade costs for environmental goods (APEC, 2021[6]; WCO, 2023[7]; Moisé and Tresa, 2025[4]). This positions trade facilitation as a complementary policy lever in efforts to scale up trade in environmental goods.

Classification aspects for environmental goods (EGs) matter in building a shared understanding among interested countries and providing a practical basis for analysis. Over the past decades, considerable progress has been made in identifying and classifying environmental goods within the HS framework. Initiatives and work undertaken in the context of the OECD and APEC have led to the development of reference lists of EGs mapped to HS codes (Moisé and Tresa, 2025[4]). In parallel, successive updates to the Harmonized System (HS) by the WCO have progressively incorporated new headings and subheadings for environmental technologies (such as solar panels and methane detection equipment) further strengthening the ability of the HS to reflect environmental objectives. The HS 2028 amendments mark a further step in this direction, notably through more granular distinctions for plastics, including new subheadings differentiating primary plastics, plastic waste, and recyclable plastic materials, as well as clarifications relevant to environmentally sensitive goods and waste streams (WCO, 2026[8]). Recent initiatives such as the ACCTS have drawn on these classification efforts in the context of commitments related to environmental goods, bringing classification questions to the operational need for shared interpretations, transparency and consistent application of HS codes at the border.

Additional approaches have been aimed at refining these classifications by working within the constraints of the HS, which is internationally standardised only up to a 6-digit product level.3 Two key approaches have been adopted to improve the identification of EGs.

• First, the use of “ex-outs” to isolate and liberalise the environmentally relevant subset within a broader HS code without requiring structural changes to the HS itself. However, countries may interpret or apply sub-classifications (8- or 10-digit level) differently. This can lead to inconsistent treatment of the same product across borders, delays in clearance, and disputes over applicable duties or controls. Moreover, even with clear HS codes, traders may mis-declare conventional goods as environmental ones to benefit from reduced tariffs or simplified procedures, where these apply. Customs must thus manage risk and potentially conduct additional checks and physical inspection, adding to the operational burden.

• Second, end-use certification for the targeted treatment of dual-use goods, whereby importers attest that the good will be deployed in an environmental application (e.g. filters used in wastewater treatment), making them eligible for preferential treatment. While these approaches offer a practical workaround, their effectiveness depends on clear definitions and streamlined implementation, which are not always present.

Where the exporter’s certification is not automatically recognised and verification processes are imposed at the border, such processes are typically considered NTMs, with the most common being technical barriers to trade (TBT) (Moisé and Tresa, 2025[4]). Among TBTs, the most frequent requirements applying to environmental goods relate to: authorisation requirements; certification of conformity with environmental or technical standards; registration or licensing requirements for importers; and mandatory labelling, such as energy consumption or emission levels (Moisé and Tresa, 2025[4]). When testing, certification, labelling, or registration requirements are enforced at the border, they can generate extensive documentary requirements. Importers must submit certificates of conformity, test reports, or product registrations to prove compliance. If procedures for submitting and verifying these documents are not streamlined – through tools such as electronic submissions, pre-arrival processing, or integration into digital Single Windows – traders face additional administrative burdens and clearance delays.

At the border, authorities also face the challenge that certain environmental goods have to comply with energy efficiency or emissions standards, which cannot be verified through a simple physical inspection (see (Moisé and Tresa, 2025[4])). This makes effective risk management systems essential. By using tools such as common risk databases and targeting systems, authorities can focus controls on higher-risk shipments and avoid unnecessary delays for compliant goods.

Each of these requirements may involve multiple agencies depending on the product and national institutional setup, including environmental agencies, energy regulators, standards bodies, and consumer protection authorities. In many cases, training and technical expertise are also lacking, particularly in verifying environmental certifications or labels that fall outside traditional customs competencies. Confirming an eco-label or energy efficiency rating may also require access to databases maintained by environmental regulators rather than customs authorities.

This potential institutional fragmentation can result in procedural delays and overlapping mandates, especially where documentation is not standardised or digitised across entities. In the absence of integrated digital platforms and clear inter-agency co‑ordination procedures, clearance processes in this area may suffer from fragmentation, delays, and gaps in enforcement.

The end-of-life segment

Trade facilitation measures can play a key role in supporting environmental objectives on the end-of-life segment by enabling environmentally sound transboundary movements of waste, recyclable materials, and end-of-life products. Such measures can contribute to closing material loops and achieving objectives of resource efficiency and circularity. International trade allows recoverable waste and recyclable materials to reach specialised treatment and recycling facilities, which can benefit from economies of scale and improve profitability in sectors such as lithium-ion battery recycling (Moisé and Rubinova, 2023[9]), plastics recovery (Moisé and Tresa, 2023[3]), and other reverse value chains (Yamaguchi, 2022[10]). A major challenge in this context is the differences across national regulations to define and classify waste and non-waste products, and hazardous and non-hazardous waste, which ultimately also presents challenges for customs authorities. While the HS classifies waste materials and scrap largely by physical properties, national regulations often consider processing methods, market value, intended use, or degree of recovery, adding further complexity. Some jurisdictions treat end-of-life products destined for recovery as recyclable materials, while others categorise them as waste subject to stricter controls. Governments apply both international and national regulations to ensure environmentally sound management of waste. International frameworks such as the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (hereafter “Basel Convention”) and the OECD Decision of the Council on the Control of Transboundary Movements of Wastes Destined for Recovery Operations (hereafter “OECD Decision”) regulate the transboundary movement of hazardous and certain other wastes through prior informed consent (PIC) and notification procedures, but they differ in scope, membership, and flexibility. Therefore, the lack of harmonised criteria – for instance, for when waste ceases to be waste – creates legal uncertainty and complicates enforcement (OECD, 2025[11]).4

Another practical challenge for customs authorities arises when classifying secondary materials and used products (for reuse, repair and remanufacturing), which may not be considered as waste. The HS does not systematically differentiate new from used goods across most product categories, nor does it explicitly identify goods by intended use, such as inputs for remanufacturing processes. As a result, re-manufacturable items are often captured under general waste or scrap codes, or under general goods code, leaving their status unclear. Some countries attempt to address this gap through national-level HS ex-outs or import declarations, but such approaches are not internationally harmonised. Externally, used or remanufactured items may appear identical to new ones, making it difficult for customs officers to verify their condition without supplementary documentation.5 While the OECD Decision allows participating countries to distinguish waste from used goods destined for recovery operations, it operates alongside rather than within the HS system, frequently challenging consistency in application at the border. The Basel Convention establishes legally binding controls on transboundary movements of hazardous and certain other wastes, based primarily on the concept of waste and PIC, but does not operate through the HS nomenclature and provides limited operational guidance for distinguishing waste from reusable or re-manufacturable goods at the product level.

Therefore, shipments involving waste or secondary materials often require multiple layers of documentation due to overlapping national, regional, and international controls. Depending on the product, exporters and importers may need to submit evidence of intended use and final destination, material purity, compliance with recovery standards, and declarations of conformity with environmental or circular economy regulations. Additional complications arise under the PIC procedure required by the Basel Convention (Box 3), which mandates notifications and approvals from multiple competent authorities (UNEP, 2024[12]). The Amber-list control system under the OECD Decision, which applies to wastes destined for recovery between OECD Members, aims to be faster and more flexible than the Basel PIC, allowing general notifications covering multiple shipments, streamlined tacit consent, and pre-consented facilities. However, divergences in national requirements – including specific national controls under the OECD Decision – can lead to increased documentation burdens and potentially inconsistent treatment across borders.

Box 3. Challenges identified as regards the operation of the PIC procedure under the Basel Convention

The UNEP (2024[12]) report on challenges in the implementation of the prior informed consent (PIC) procedure by the Parties to the Basel Convention notes that the PIC procedure is facing a set of persistent challenges that undermine its effectiveness and predictability:

• Delays and lack of timely responses: Many Parties report significant delays in receiving acknowledgements or decisions from importing and transit states. In some cases, there is no response at all, leaving exporters uncertain whether shipments can proceed.

• Inefficient communication channels: Outdated or incomplete contact information for competent authorities, reliance on paper-based systems, and inconsistent acknowledgement of notifications hinder smooth communication.

• Divergent interpretations and definitions: Parties apply different definitions of waste (hazardous and non-hazardous), creating inconsistencies in classification and enforcement. This is particularly problematic for plastics and electronic waste.

• Transit-related difficulties: Growing numbers of transit countries require consent, often with unclear or highly demanding documentation requirements. There is also a lack of harmonisation of what constitutes a “state of transit.”

• Short permit durations and mismatched timelines: Export permits are sometimes issued with timeframes too short to be practical, while transit consents do not automatically align with the timelines set by importing states.

• Capacity constraints: Many competent authorities, particularly in developing countries, face resource and technical limitations that hinder efficient implementation of the PIC procedure.

• Inconsistent risk and compliance monitoring: Weak monitoring mechanisms limit the ability to track shipments and ensure environmentally sound management at their final destination. This also raises risks of illegal traffic.

• Reluctance of carriers: Some shipping lines refuse to transport waste due to uncertainty over regulatory requirements and risks of shipments being blocked in transit.

Overall, these challenges are estimated to result in increased costs, procedural uncertainty, and risks of diversion to informal or illegal trade channels, undermining both trade predictability and environmental protection.

Source: (UNEP, 2024[12])).

Applicable trade-related documents, physical inspections and testing at the border can also be determined by product requirements related to PR-PPMs (see Table 1 for illustrative examples). Examples of related documents include proof of functionality and reuse intent for second-hand electronics (e.g. European Union, Singapore); documents proving quality or purity thresholds needed to classify plastic and metal scrap as non-waste (e.g. Japan, European Union). The proliferation of criteria can result in different documents being required across export markets and increased compliance costs.

Table 1. Product requirements relevant to circular economy policy: Illustrative examples

Circular economy policy	Related requirements
Extended producer responsibility (EPR)	Material content Recycled content Hazardous content Recyclability Reparability Production with environmental criteria
Eco-design
Public procurement with environmental criteria
Labelling
Recycling	Material quality (e.g. for waste and scrap and for secondary raw materials)
Refurbishment and remanufacturing	Product quality
Second-hand goods
Labelling

Notes: EPR is an environmental policy approach in which a producer’s responsibility for a product is extended to the post-consumer stage of a product’s lifecycle. Eco-design is an approach that integrates environmental considerations into product design, with the aim of reducing environmental impacts over the product’s entire lifecycle.

Source: Based on (Yamaguchi, 2021[13])).

Beyond the identification issues mentioned above, customs authorities face considerable challenges when determining the customs value and inspecting second-hand goods, recyclables, and waste. Standard valuation approaches under the WTO Customs Valuation Agreement are often difficult to apply, as second-hand goods may lack clear transaction values or market comparable values. Customs may need to resort to depreciation formulas, expert assessments, or fall-back valuation methods – all of which increase subjectivity and require specialised training. Furthermore, certification documents related to circular economy attributes (e.g. recycled content, reparability) may not be standardised or digitally readable, leading to physical inspection backlogs and duplicative assessments.

Risk profiling in waste and second-hand goods trade is particularly complex due to the variability of shipments and persistent classification uncertainties. The risk of fraud and mis-declaration is high, as items may be reported as scrap, refurbished, or non-functional to avoid stricter controls or benefit from lower tariffs. These practices complicate tariff application and regulatory compliance, especially when second-hand goods are also subject to additional environmental or product safety requirements.

The management of these risks requires close co-ordination among customs, environmental regulators, standards agencies, and health or safety authorities (Box 4). (Isarin et al., 2024[14]) highlight that digital technologies are increasingly being applied to improve compliance with waste management laws and the detection of violations, making monitoring and enforcement efforts more effective and cost-efficient. While early progress has been focused on digitising data and closing information gaps across value chains, major challenges remain in data quality, interoperability, and access across authorities and borders, limiting the use of digital tools for efficient enforcement.

Box 4. Role of Customs and inter-agency co-operation under the Basel PIC procedure

Under the Basel Convention, the PIC procedure requires exporting countries to notify and obtain consent from importing countries before hazardous wastes or other controlled wastes are shipped. While the consent process is managed by designated competent environmental authorities, customs administrations are responsible for enforcing these requirements at the border. Their role includes verifying that shipments are accompanied by the correct Basel movement documents, checking that the content matches the approved consent, and preventing shipments that lack authorisation or appear fraudulent. Customs therefore serves as the operational gatekeeper that ensures the legal provisions of the Convention are respected in practice.

Customs also plays a key role in detecting and stopping illegal traffic, which the Convention defines as criminal activity. This often involves identifying mis-declared shipments (e.g. hazardous waste presented as recyclable goods), stopping transits to unauthorised facilities, and seizing shipments that bypass the PIC procedure altogether. To do this effectively, customs aim to apply risk-profiling tools, targeting techniques, and intelligence-led enforcement.

Because customs authorities do not themselves issue consents under the PIC procedure, close co-operation with national environmental authorities is essential. Environmental agencies should provide customs with information on authorised shipments, the scope of consent granted, and any restrictions that apply. Customs, in turn, should report back on shipments intercepted or suspected of being illegal. This two-way flow of information ensures that enforcement at the border is aligned with regulatory approvals.

In turn, the OECD Decision’s amber control procedure aims at simplifying the Basel PIC procedure for transboundary movements of wastes destined for recovery within OECD Member countries. Customs may work with general notifications covering multiple shipments, while the standardised OECD forms can help authorities apply more consistent checks. The use of pre-approved recovery facilities can also reduce the burden on customs at the border.

At the international level, customs authorities collaborate with bodies such as the WCO, INTERPOL, and the Basel Convention’s enforcement networks. Joint operations and information exchange across countries are critical, since illegal waste shipments often involve complex transboundary routes. Such inter-agency co-operation – both domestically and internationally – is therefore the backbone of effective PIC procedures enforcement, ensuring that hazardous waste is managed safely, and that environmental and health risks are minimised.

Source: Basel Convention Guidance Manuals, https://www.basel.int/Implementation/Publications/TrainingManuals/tabid/2364/Default.aspx.

Environment-related TFIs measures

To translate the challenges identified in the previous section into trade facilitation solutions, this section summarises the env-TFI measures presented in Table 2 below. These measures seek to determine whether relevant information is transparent, whether documents and procedures are streamlined and digitalised, whether agencies co-operate effectively, and whether institutional responsibilities are clear.

Transparency and predictability

The first set of env-TFIs examines whether information relevant to the implementation of environment-related requirements is transparent, accessible and up to date for traders. This includes whether information on applicable duties, import and export procedures, required forms, permits, licences, certificates, classification decisions, enquiry points, appeal procedures, and fees and charges is available and up to date. The focus is not only on whether such information exists, but whether it is sufficiently clear and accessible to allow traders to understand the steps required to comply. It also accounts for how traders are specifically consulted regarding changes to related legislation and requirements. Higher scores therefore indicate that such environment-related requirements are more visible to traders and more predictable in their application.

Automation and streamlining of documents and procedures

A second set of indicators assesses whether documents and procedures related to implementation of environmental requirements are integrated into streamlined and digital trade facilitation systems. These measures look at whether copies of related documents are accepted, whether related documentation follows relevant international standards, whether the specific documentation requirements from part of periodic reviews, and whether procedures can be processed electronically. They also examine whether relevant documents and procedures are included in Single Window systems, whether electronic signatures are used, and whether risk management, post-clearance audits and Authorised Operator programmes are applied in ways that can support environment-related compliance. This area is central to the env-TFIs because implementation of many environment-related requirements depends on the submission, verification and exchange of information. Higher scores suggest that these requirements are handled through more efficient, paperless and risk-based processes, rather than through fragmented or manual channels.

Domestic and cross-border agency co-operation

The env-TFIs also capture the extent to which environment-related controls are supported by effective co-operation among agencies. Domestically, this includes co-ordination of data requirements, interoperable computer systems, co-ordinated inspections, co‑ordination on risk management systems, co-operation on certified trader programmes, and shared infrastructure or equipment. Cross-border co-operation covers similar issues with neighbouring or partner countries, including harmonised data requirements, compatible computer systems, shared risk analysis, exchange of control results, and co-operation on Authorised Operator (certified trader) arrangements. This is particularly important for implementation of environment-related measures at the border, which often involves customs alongside environmental authorities, licensing bodies, market surveillance authorities or other specialised regulators. Higher scores indicate that enforcement is less siloed and that agencies are better equipped to share information, target controls and avoid unnecessary duplication.

Governance and impartiality

The final set of env-TFIs focuses on the governance conditions that support predictable and impartial implementation. These indicators examine whether the functions of customs and other relevant border agencies are clearly established and publicly described, and whether customs annual reports or similar public reporting tools include sufficient information on activities linked to environment-related controls at the border. This is important because implementation of environment-related requirements often involves several institutions with distinct mandates. Clear institutional responsibilities help traders understand which agency is responsible for which requirement, and help governments ensure that procedures are applied consistently. Higher scores should therefore be read as evidence of stronger institutional transparency and clearer accountability in the handling of environment-related requirements at the border.

Table 2. Env-TFIs: Summary of measures

Main area	Core question addressed by the env-TFIs	Illustrative measures covered	Areas and number of relevant items in the env-TFIs	Product lifecycle relevance	How to read a higher score
Transparency and predictability	Are environment-related requirements visible, understandable and predictable for traders?	Publication of duties, procedures, required documents, classification decisions, enquiry points, consultations, advance rulings, appeals, fees and charges	Information availability [23] Involvement of the trade community [8] Advance rulings [9] Appeal procedures [8] Fees and charges [16]	Production requirements, including environmental-related NPR-PPMs; environmental goods in the use phase; waste, reuse and remanufacturing at end-of-life	Environment-related requirements are easier to identify, understand and anticipate, reducing uncertainty for traders and agencies
Automation and streamlining of documents and procedures	Can environment-related documents and procedures be handled through efficient, paperless and streamlined channels?	Acceptance of copies, use of international standards, review of documentation, electronic processing, Single Window integration, electronic signatures, risk management, post-clearance audits, Authorised Operator programmes	Formalities – Documents: [12] Formalities – Automation [19] Formalities – Procedures [17]	Relevant across production, use and end-of-life, especially where permits, certificates, notifications or movement documents are required	Environment-related procedures are more embedded in digital and streamlined border systems, reducing duplication and administrative costs
Domestic and cross-border agency co-operation	Are the agencies involved in environment-related controls co-ordinated domestically and with partner countries?	Harmonised data requirements, interoperable systems, co-ordinated inspections, shared risk management, co-operation on certified trader programmes, exchange of control results	Domestic border agency co-operation [27] External border agency co-operation [21]	Particularly important for waste movements, reuse and remanufacturing, and requirements involving specialised environmental or regulatory agencies	Relevant agencies can exchange information, co-ordinate controls and avoid fragmented or duplicative border procedures
Governance and impartiality	Are responsibilities, mandates and institutional arrangements clear and transparent?	Public description of agency functions, clarity on the role of customs and other border agencies, reporting on activities related to environment-related controls	Governance and impartiality [8]	Relevant wherever multiple agencies share responsibility for enforcement at the border	Traders and agencies benefit from clearer accountability, better institutional transparency and more predictable implementation

Note: The env-TFIs are scored on the same broad logic as the economy-wide TFIs: higher scores indicate stronger integration of relevant requirements into trade facilitation systems. They should not be interpreted as measuring the ambition or effectiveness of environmental regulation itself.

Notes

← 1.  NPR-PPMs can extend beyond environmental requirements and also cover labour-related regulations. For instance, measures prohibiting the import of goods produced with forced labour or child labour are likewise based on the way products are made rather than on their physical characteristics.

← 2.  Conformity assessment bodies (CABs) are organisations that evaluate whether products, processes, services or management systems comply with specified technical regulations, standards or conformity requirements. They may be public bodies (such as government agencies or regulators) or private bodies (such as accredited testing laboratories, inspection bodies or certification firms), provided they are formally designated or accredited to perform conformity assessment functions.

← 3.  While the HS is harmonised internationally only up to the 6-digit level, countries can of course typically expand product detail at the 8- or 10-digit level in their national tariff schedules, which can vary across jurisdictions.

← 4.  A recent case is electronic and electrical waste (e-waste). In June 2022, the Basel Convention was amended to require that transboundary movements of e‑waste be subject to the prior informed consent (PIC) procedure, thereby introducing stricter controls. Among OECD Members, no consensus was reached on the (automatic) incorporation of this amendment into the OECD Decision. As a result, each OECD Member now applies controls to the transboundary movements of e‑waste, in conformity with its domestic legislation and international law. Some members continue to apply the current OECD Decision rules for e‑waste, while others have adopted the Basel Convention controls.

← 5.  Remanufacturing items traditionally have not been classified separately in the HS primarily because they are produced to like-new (or better) standards / specifications.