Environmental performance measures increasingly ask firms to report on their carbon footprints, demonstrate compliance with deforestation‑free rules, or verify upstream production practices. Without interoperable digital systems, these requirements can become burdensome and risk disrupting supply chains. This matters for the trade facilitation agenda: the same border systems that AI relies on for efficiency – digitised documents, common data standards, digital Single Windows, and secure cross‑border data exchange – will also determine whether new environment-related requirements can be integrated smoothly rather than only added as parallel, duplicative processes. In other words, promoting both AI‑enabled facilitation and the efficient integration of environmental performance requirements requires the same digital and interoperable architecture – linking registries, certificates, and product‑level attributes directly into risk management, documentary and data workflows.
Strengthening Supply Chains through Efficiency, Resilience, AI and Environmental Performance
Many governments are increasingly considering and introducing measures based on non‑product‑related process and production methods (NPR‑PPMs)1 in response to growing demand from consumers, investors, and regulators for more detailed and reliable information on how goods are produced (OECD, 2024[23]; OECD, 2025[24]). Such approaches have emerged notably in the area of environmentally performing supply chains, including information on carbon footprints, resource efficiency, and the assessment of products’ wider impacts on deforestation, pollution, or biodiversity (Jaax and van Lieshout, 2025[25]; Pauwelyn, 2024[26]; World Bank, 2025[27]).
What began as market‑driven environmental sustainability commitments is increasingly embedded in regulations, requiring companies to substantiate claims with verified data and to meet specific thresholds or performance criteria. This shift changes compliance costs for firms of all sizes: it raises the need for robust internal data systems, expands the scope of documentation and audits, and introduces potential trade frictions where requirements diverge across jurisdictions. For public authorities, the move toward mandatory rules necessitates ensuring availability and transparency of related requirements, enhanced verification capacity, and closer co‑ordination between customs and competent environmental agencies (OECD/BIAC/WEF, 2023[28]).
Policies with environmental objectives and with potential implications across supply chains are growing internationally. For instance, the OECD’s Inclusive Forum on Carbon Mitigation Approaches (IFCMA) Climate Policy Database documents 1 600 individual policy instruments grouped within 43 policy approaches (e.g., comparative energy efficiency labels, framework regulations, performance standards, subsidies, taxes, technology standards, and emission trading schemes) across 38 economies. Figure 4.2 shows the number of adopted policy approaches by countries as of 2024.
Note: The chart reflects information available for the 38 economies covered in the database. The database distinguishes 43 policy approaches across countries, which have adopted diverse climate mitigation strategies reflected in the number and approach of policy instruments in place. Each column shows how many of the 43 policy approaches are adopted in the country. There are five main instrument categories: Economic instruments, Regulatory instruments, Information instruments, Government consumption and investment instruments, and Voluntary approaches. Each of these instrument categories is further divided into instrument groups. Economic instruments are split into taxes, subsidies and trading schemes, while regulatory instruments are split into performance standards, technology standards and framework regulations.
Source: based on Inclusive Forum on Carbon Mitigation Approaches (IFCMA) Climate Policy Database, https://www.oecd.org/en/data/dashboards/ifcma-climate-policy-dashboard.html.
Moreover, the number notifications of environmental-related technical requirements to the World Trade Organization (WTO) have risen steadily (Figure 4.1), reflecting the growing reliance on regulatory tools to support environmentally performing supply chains. These notifications span eco‑design and energy‑efficiency rules, labelling and disclosure schemes, emissions reporting, and requirements for deforestation‑free or low‑carbon products (WTO, n.d.[29]).
Yet the regulatory landscape remains heterogeneous, differing in product scope, objectives, information requirements, thresholds, and institutional design – and this diversity can fragment compliance pathways. Some regimes emphasise product‑embedded emissions or carbon content (e.g., border carbon mechanisms), while others focus on due diligence obligations to identify and mitigate environmental risks in supply chains, or on scheme‑based recognition of environmental sustainability standards for specific commodities. These differences matter operationally: they influence what data must be collected, how it should be formatted and verified, and which authority must receive it – and at which stage of the transaction.
Some environmental measures require enforcement primarily behind-the-border – for instance, through periodic reporting obligations or corporate disclosure requirements. Others impose obligations at, or prior to, the point of import, where companies must demonstrate compliance before their goods can enter the market. In practice, many mandatory environmental-related initiatives trigger at least some enforcement at the border, creating new operational interfaces with customs procedures and raising practical questions about how environmental information is captured, linked to declarations, and incorporated into risk management and clearance processes (OECD, 2025[14]).
Note: Number of environment-related Technical Barriers to Trade (TBTs) notified to the World Trade Organization (WTO) by Members.
Source: based on WTO’s Environmental Database (EDB): https://edb.wto.org/.
While NPR‑PPMs are not new, the most recent wave of environment-related measures introduces a qualitatively higher level of operational complexity than earlier approaches. Many regimes now hinge on specific verification systems – such as Monitoring, Reporting, Verification (MRV) and Accreditation frameworks2 – and require firms to assemble and exchange granular information that extends well beyond the factory gate. Data elements can include both upstream and downstream (Scope 3) greenhouse‑gas (GHG) emissions, the use of standardised emissions factors, batch‑ or consignment‑level attributes, geolocation co‑ordinates for origin or land‑use verification, and digital attestations from accredited bodies.
Meeting these requirements at scale places new demands on corporate data architectures and on public digital infrastructures: firms need to capture, structure, and share machine‑readable evidence across multi‑tier supplier networks, while authorities need interoperable systems capable of ingesting, validating, and linking environmental attributes to customs declarations, trade facilitation programmes and risk‑management workflows. Absent such interoperability, compliance becomes burdensome, duplicative checks proliferate, and trade facilitation frameworks risk being disrupted just as they are delivering efficiency gains elsewhere (OECD, 2025[14]).
In the case of GHG emissions, intensity per output varies widely across sectors and products, reflecting differences in production processes, supply chain structures, and dependence on imported inputs (Figure 4.3). Some industries generate a large share of emissions directly through energy or materials intensive operations, while others embed significant emissions indirectly through the inputs they source from upstream suppliers (Balaban et al., 2025[30]). These patterns matter for the implementation of some environmental requirements: they shape the type of data firms must collect, the extent to which emissions information must be traced along supply chains, and the nature of evidence that border and regulatory authorities must verify.
Note: The figure shows greenhouse-gas (GHG) emissions per unit of final product (left axis), as well the import intensity of production (right axis). A distinction is made between “direct” emissions generated in the production of the final product itself and “indirect” emissions that arise upstream in the supply chain. The import intensity of production is a measure of the international fragmentation of production. It captures the cumulated use of imported intermediate inputs throughout the supply chain, expressed as a percent of the value of final output. The results in this chart can be interpreted as averages over all OECD countries.
Source: Balaban et al. (2025[30]).
Diverging emissions intensities across sectors and products can also influence where compliance burdens are likely to fall and highlight the critical role of digital tools and standardised data models in integrating environmental information into existing trade facilitation frameworks without creating additional friction:
Energy and raw materials intensive sectors (including basic metals, non-metallic minerals, coke and petroleum): in this case, high levels of direct emissions require robust MRV ready evidence, including plant-level data, metering information, and accredited verification. Where relevant, border processes would require specific capacity to ingest machine readable certificates and registry identifiers linked to tariff lines and consignments.
Mid-stream manufacturing (including chemicals, electrical equipment, paper, plastics, fabricated metals, wood): in this case, high indirect emissions imply firms must obtain detailed, product level emissions data from their suppliers. Interoperable data models and consistent identifiers (e.g., facility IDs, product or carbon footprint IDs) would be essential to enable customs systems, as relevant, to validate claims efficiently and avoid manual reconciliation.
Complex assembly sectors (including machinery, motor vehicles, electronics, textiles): these sectors tend to have lower direct emissions but high import intensity, making compliance dependent on reliable upstream information. Border authorities increasingly need the ability to access trusted registries or recognised scheme databases rather than rely solely on documents submitted at the point of import.
Agriculture, food and fisheries: although emissions profiles vary, these sectors face distinctive traceability demands, such as geolocation, land use, and vessel trip verification for deforestation free or illegal, unreported and unregulated fishing related requirements.
Pharmaceuticals and selected services sectors: these sectors sit at the lower end of emissions intensity but are still subject to reporting, due diligence, and supplier screening obligations. SMEs may face disproportionate challenges unless data templates, simplified digital reporting tools, and reusable documentation formats are available across jurisdictions.
Effective implementation also requires co‑ordination across a much wider ecosystem of actors than might be more characteristic of other border processes. Firms, customs administrations, environmental regulators, other border agencies, accredited verification bodies, and digital system providers would all play a role in generating, validating, transmitting, and using environmental data. This co‑ordination must support a structured sequence of checks: identifying the product and assessing whether the measure applies; verifying authorisations, certificates, or registry references; and enabling data exchange between customs and competent authorities before release.
As highlighted in the previous sections (see Section 2.2.1 on going paperless), the digitalisation of trade‑related documents and procedures is already complex and resource‑intensive for both firms and administrations and evolving environmental requirements may compound these challenges. Additional data demands, heterogeneous reporting formats, and new verification channels risk adding friction unless carefully integrated into existing systems. To ensure that environmental sustainability measures can be implemented effectively without undermining trade facilitation objectives, two forms of interoperability are essential. Regulatory interoperability concerns the alignment of information requirements – ensuring, for example, that emissions data or sustainability certificates collected under one jurisdiction’s rules can be recognised or reused in another.
Technical interoperability concerns the digital architecture itself: how different actors and systems exchange, process, and verify information in practice. Together, these forms of interoperability determine whether environmental requirements can be embedded into border processes in a predictable, efficient, and scalable way (OECD, 2025[14]; Stenzel and Waichman, 2023[31]). Against this background and building on existing work on going paperless (OECD, 2025[14]), this paper focuses on the technical interoperability challenges in the context of environmental-related requirements.
← 1. The use of measures based on process and production methods (PPMs) in trade regulation is a long-standing policy issue. Non-product-related PPMs (NPR-PPMs) refer to processes and production methods that do not affect products’ physical characteristics or functional performance but may have environmental or social impacts – unlike product-related PPMs, which alter the physical characteristics of products. The overall objectives of NPR-PPMs measures and approaches vary across economies and can include market-based incentives, regulatory thresholds, and eligibility criteria for public support.