Trade facilitation implications of carbon‑intensity requirements

6. Practical considerations and implications for identifying implementation readiness

Applying a trade facilitation perspective can help not only to identify potential disruptions and mitigation options, but also to understand implementation readiness and gaps associated with the introduction of carbon-intensity requirements. This is grounded in the elements of technical interoperability identified in this report, including those linked to documentary requirements, data elements and exchange systems, and their relation to procedural steps and institutional roles. This analysis helps to identify where tools used in existing border processes, data infrastructures and coordination mechanisms may already provide a basis for implementation and where additional adjustments, capacity building, training or testing may be required as also highlighted by stakeholders consulted during the preparation of this report.

Figure 5 presents a framework that can be used to assess the readiness of actors involved in the implementation of border-enforced carbon-intensity requirements. The framework translates the trade facilitation perspective developed in this paper into five key implementation dimensions. It can be used by policymakers and authorities to identify implementation gaps, sequencing needs and linkages across actors, procedures, data and systems, and to map how specific carbon-intensity requirements interact with customs processes, border procedures and existing trade facilitation mechanisms. A detailed checklist of areas underpinning this framework is provided in Annex B.

Figure 4. Framework for implementing carbon-intensity requirements at the border

Note: See checklist of areas and questions under each item in Annex B.

6.1. Implementation readiness across actors

Implementation readiness can be expected to differ across the key actors involved in border enforcement. Carbon-intensity enforcement requires capabilities that are unevenly distributed, including the ability to generate and verify emissions data (OECD, 2025[3]), manage digital information flows, and integrate new controls into existing clearance and risk management systems.

These capabilities can be understood along two complementary dimensions: operational readiness and systems and data readiness. Operational readiness addresses actors’ ability to embed new requirements into existing border procedures through appropriate mandates, workflows, staffing and coordination practices. Systems and data readiness refers to the availability of digital infrastructure, interoperable IT systems and structured data environments needed to generate, exchange and process emissions-related information as these link to trade transactions. Interviews with both private sector operators and customs administrations underscored that these two forms of readiness do not always coincide and are unevenly distributed across firm sizes and contexts.

Economic operators may face challenges in generating, consolidating and verifying product-level or upstream emissions data and in adapting internal IT systems and compliance processes to new data and documentation requirements. These challenges are likely to differ between large firms, which may already operate environmental reporting systems and digital compliance tools, and SMEs, which face resource and data constraints. Similar structural constraints may affect firms operating in or exporting from developing economies, where access to emissions data, accredited verification services and digital infrastructure may be more limited.

Customs authorities may in turn encounter limitations in integrating non-traditional regulatory checks into existing clearance, risk management and IT systems, particularly where digitalisation and inter-agency data movement are still evolving. Other border agencies, competent authorities and verification bodies may face capacity, coordination and governance challenges when operationalising new mandates and managing new data registries.

Figure 5. Indicative readiness of actors for implementing carbon-intensity requirements

Notes: Indicative overview of actors’ readiness with respect to operational and systems and data aspects. “Operational readiness” refers to actors’ ability to embed new requirements into existing border procedures through appropriate mandates, workflows, staffing and coordination practices. “Systems and data readiness” reflects the availability of digital infrastructure, interoperable IT systems and structured data environments needed to generate, exchange and process emissions-related information as these link to trade transactions. The categorisation of readiness levels (high, medium, low) is based on the qualitative analysis drawing on publicly available information, stakeholder consultations and targeted interviews conducted for this report, and should be interpreted as illustrative rather than exhaustive or definitive.

Figure 5 provides an indicative overview of differences in readiness across actors involved in implementing carbon-intensity requirements, distinguishing between operational readiness and systems and data readiness. Implementation challenges arise not only from overall capacity gaps, but also from imbalances between procedural capability and digital systems capacity at the border. More generally, strengthening readiness for carbon-intensity requirements will depend on the specific regulatory design, the actors involved in the border ecosystem, and the timelines for implementation.

6.2. Implementation readiness across sectors

Beyond stakeholder-specific differences, implications of carbon-intensity requirements for border processes are also likely to be sector specific. Readiness and implementation challenges depend in part on how easily regulatory conditions can be operationalised using the information typically available at importation, such as product classification, quantity, origin and customs procedure codes. In this context, the risk of product misclassification may be higher in sectors where customs classification is inherently complex and regulatory scope differs within closely related tariff headings, such as chemicals, fertilisers and certain iron and steel products. Indeed, stakeholder discussions indicated that more homogeneous products with clearer tariff definitions, such as cement, may present fewer classification and enforcement challenges at the border.

Box 3. Implementation readiness for carbon-intensity requirements across specific goods such as oil, gas and electricity

Certain goods covered by carbon‑intensity requirements, such as natural gas, fluorinated gases (F‑gases), crude petroleum and electricity, present distinct challenges at the border due to the way they are transported and traded. While these products are considered goods under WTO rules and are assigned Harmonised System (HS) codes, they are typically conveyed through pipelines or electricity transmission lines rather than as discrete physical consignments. As a result, they cannot always be verified or controlled by customs on a shipment‑by‑shipment basis at the time of border crossing.

For such goods, customs procedures can rely on aggregated, periodic or system‑level data rather than real‑time consignment information. This can lead to delays between the physical importation and the submission of customs declarations, with supplementary or simplified declarations used to reconcile traded volumes over a defined reference period. In the case of electricity imports, for example, mismatches may arise between market settlement periods, metering data and customs declaration cut‑off dates, requiring harmonised reporting rules and close coordination with grid operators and energy market authorities.

These characteristics have implications for the implementation of carbon‑intensity requirements. Enforcement in these sectors may depend more heavily on digital reporting systems, trusted data sources and inter‑agency co-operation than on traditional border controls. Where emissions‑related requirements are linked to quantities, origin, or production characteristics that cannot be directly observed by customs at clearance, reliance on supplementary declarations, post‑clearance reconciliation and cross‑checks with sectoral regulators becomes particularly important.

Source: The analysis of implementation experiences draws on stakeholder interviews conducted with representatives from the private sector (operating across diverse markets), public authorities and international organisations for the purposes of this project.

Readiness may also vary across sectors depending on how closely trade flows can be handled through established customs procedures. For example, electricity, which is traded as a continuous cross-border flow rather than a physical consignment, may require reliance on system-level data and coordination with grid and market authorities, making enforcement more dependent on digital systems and inter-agency co‑operation than in the context of more standard customs processes (see Box 3).

6.3. Implementation readiness from the perspective of developing economies

Differences in firms’ capabilities for collecting, compiling, and reporting data directly affect the feasibility of implementing carbon‑intensity requirements at the border. From the perspective of developing economies, their exporters and SMEs in particular may have limited access to emissions‑related data, technical expertise and accredited verification services. Stakeholder insights suggest that these constraints can affect firms’ ability to comply with requirements that rely on quantified and standardised emissions information, especially where such information is not already collected for business or regulatory purposes.

Firms’ positions within global value chains also shape how carbon‑intensity requirements can be operationalised in practice. Many firms in developing economies operate as upstream suppliers and have limited experience with emissions accounting methodologies or reporting formats used in destination markets. When emissions‑related information is generated or consolidated by downstream actors, upstream firms may also have limited scope to influence policy design. This can constrain their ability to adapt to border‑based requirements and may increase the risk of exclusion from certain export markets. Cost structures and requirements also influence whether firms can absorb and sustain compliance with carbon‑intensity requirements over time. Stakeholder discussions suggest that the costs associated with emissions measurement, verification and certification can represent a relatively higher burden for SMEs than for larger firms. As an indication of magnitude, internal accounting and reporting activities have been estimated to account for around 1% of revenues for large firms and up to 3% for small firms, with Scope 3 emissions reporting being particularly resource‑intensive (Patchell, 2018[26]). As these costs are often fixed rather than proportional to export volumes, they may weigh more heavily on firms with small or irregular shipments, potentially affecting their continued participation in some export markets.

Differences in digital and institutional readiness also affect how effectively emissions‑related information can be integrated into border processes. While, in general, improvements in trade facilitation at the border have been strongest in developing countries1, particularly low-income and lower-middle income economies as shown by the TFIs (OECD, 2025[21]), trade costs remain high and access to reporting tools and to verification services recognised by importing jurisdictions may remain uneven. Differences between domestic data practices and those required for border enforcement may also increase reliance on default values or supplementary procedures.

6.4. Conclusions and policy observations

Carbon-intensity requirements pose new challenges at the border, as their enforcement relies on quantified and complex metrics linked to a range of production processes that are not directly observable at importation. As a result, traditional border control systems alone are insufficient for enforcement. Where implementation is not supported by adequate data infrastructure and verification mechanisms, carbon-intensity requirements risk increasing trade frictions and costs, creating uncertainty for firms, and encouraging circumvention.

The analysis in this paper suggests that effective enforcement depends on the ability of customs and other relevant authorities to act within a broader system of compliance mechanisms. In this context, trade facilitation tools, notably automation, digital clearance processes, risk-based controls and inter-agency co-operation are essential to reduce costs and to make enforcement feasible at scale.

At the same time, readiness to implement and to respond to the demands of carbon intensity requirements will vary significantly. Differences depend on regulatory design, sectoral characteristics, the complexity of supply chains, and the capacity of actors to generate and transmit reliable data. Particular attention is needed to sectors with complex classification or non-standard trading structures, as well as for SMEs and firms in developing economies, for whom compliance costs may be proportionately higher.

These findings point to a set of policy observations:

• Technical interoperability of customs and carbon-intensity-related documents, data, and exchange systems is key to ensure effective implementation at the border. Carbon-intensity-related information should be embedded into risk based and automated border processes as well as certified trader programmes to allow controls to focus on higher risk transactions while maintaining predictability for compliant traders.

• Reliable digital infrastructure, standardisation of relevant data elements and legal recognition of electronic documents are enabling factors for the broader border ecosystems necessary for the implementation of carbon-metrics requirements and their enforcement at the border.

• Border agency co-operation mechanisms in this context could usefully set out clear operational arrangements to facilitate coordination between customs, environmental authorities and other relevant sectoral regulators to address complex cases, resolve ambiguities and support ongoing learning.

• International co-operation could be strengthened, particularly at the technical level, to promote compatible data formats, documentation and digital systems for managing cross-border trade. This would help reduce inconsistencies and compliance burdens for firms, particularly smaller firms and those in developing economies.

Note

← 1.  In OECD and other advanced economies, improvements in trade facilitation performance have been more modest, given they already perform at high levels across TFI areas.