Trade facilitation implications of carbon‑intensity requirements

5. Managing potential disruptions through trade facilitation frameworks

The implementation of carbon-intensity requirements at the border interacts closely with existing trade facilitation frameworks, particularly where new data-intensive and verification-based obligations must be integrated into established customs and border processes. Technical interoperability challenges emerge at this interface, as carbon-intensity requirements introduce additional data flows, documentation and coordination needs into systems that were largely designed to support tariff assessment and more traditional forms of regulatory compliance. These challenges may place pressure not only on core trade facilitation processes, such as automation, risk management and border agency co-operation, but also on the capacity of different actors within the border ecosystem – e.g. customs administrations or economic operators – to fulfil their respective roles effectively. Against this background, the mapping of regulatory approaches provides a basis for identifying where such requirements may generate frictions or disruptions in trade facilitation frameworks, while also highlighting facilitation-based solutions that can support their effective, proportionate and coordinated integration at the border.

5.1. Potential disruptions to existing trade facilitation frameworks

This section examines how the introduction of carbon-intensity requirements may disrupt existing trade facilitation frameworks at the border. It focuses on both procedural impacts on border processes and institutional impacts on the actors responsible for implementation, highlighting where additional data, documentation and coordination requirements may strain systems and capacities originally designed for more traditional forms of regulatory compliance. The analysis provides a basis for identifying pressure points that may affect the efficiency, predictability and proportionality of border procedures.

5.1.1. Procedural challenges for border clearance and control

Table 3 summarises the main trade facilitation areas where carbon-intensity regulations may create frictions or require adaptations to existing border procedures. Border processes may slow down where customs IT systems cannot process new carbon-related data elements, verification references or authorisations, limiting the effectiveness of automated clearance and pre-arrival processing and increasing reliance on manual procedures.

Risk management systems may also be affected, as new fraud and circumvention risks linked to emissions data are not yet integrated into risk profiles, potentially leading to less targeted controls. Traditional risk indicators, such as tariff classification, origin or declared value, may be insufficient to capture risks related to emissions data, verification status or supply chain structures. As a result, risk management systems that are not yet adapted to these new dimensions may be less effective in targeting high-risk consignments. Limited integration of carbon-related data into customs IT systems can also reduce the scope for automated risk management. In addition, circumvention strategies, such as rerouting, minor processing or shipment splitting to remain below specified thresholds, require analysis across consignments and over time, which may exceed current analytical capacities.

Table 3. Potential disruptions and challenges to core border processes

Trade facilitation area	Coverage and WTO TFA reference	Nature of the challenge	Potential implications
Information availability	Publication of information (in a non-discriminatory and easily accessible manner) on importation, exportation, and transit procedures, including on the internet, to enable governments, traders, and other interested parties to become acquainted with them (Article 1(1) of the WTO TFA)	Fragmented, technical or frequently evolving guidance on product scope, thresholds, documentation and compliance obligations	Reduced predictability for traders; higher compliance costs; inconsistent interpretation across ports of entry
Automated and electronic clearance	Electronic submission and processing of customs declarations to expedite the release of goods (Article 10(1) of the WTO TFA)	Existing customs systems not designed to process carbon-intensity related data, verification references or authorisation identifiers	Increased manual processing; slower clearance; reduced effectiveness of automated controls
Pre-arrival processing	Procedures allowing for the submission of import documentation and other required information in order to begin processing prior to the arrival of goods with a view to expediting the release of goods upon arrival (Article 7(1) of the WTO TFA)	Emissions data or verification outcomes not available at the time of pre-arrival submission	Limited ability to conduct early risk assessment; delayed release decisions
Risk management	Risk management for customs control to avoid arbitrary or unjustifiable discrimination, concentrating customs control on high-risk consignments, and basing risk management on an assessment of risk through appropriate selectivity criteria (Article 7(4) of the WTO TFA)	New risk factors (misclassification, circumvention, manipulation of emissions data) not yet integrated into risk profiles	Less targeted controls; higher fraud risks or over-control of low-risk consignments
Single Window	Single Windows enable traders to submit documentation and/or data requirements for importation, exportation, or transit of goods through a single-entry point to the participating authorities or agencies (Article 10(4) of the WTO TFA)	Parallel submission of information to multiple platforms or authorities	Duplication of reporting; reduced efficiency gains from Single Window systems
Interconnected systems for border co‑operation	Co‑operation and co‑ordination of procedures among border agencies both internally and externally (e.g. alignment of procedures) (Articles 8(1 and 2) of the WTO TFA)	Limited interoperability between customs systems and environmental or tax registries	Reliance on manual data movement; coordination delays
Post-clearance audits	Post-clearance audits are carried out to ensure compliance with regulations. They should be based on risk selectivity criteria and the audit results should be used in risk management (Article 7(5) of the WTO TFA)	Expanded audit scope to include emissions data, verification reports and upstream information	Increased audit complexity; capacity constraints for authorities
Authorised operator programmes (AEO)	Authorised Economic Operators (AEO) are operators who meet specific criteria and who are therefore benefiting from additional trade facilitation measures, such as low documentary and data requirements, low rate of physical inspections and examinations, rapid release time, deferred payment of duties, taxes, fees, and charges, use of comprehensive guarantees or reduced guarantees, a single customs declaration for all imports or exports in a given period, clearance of goods at the premises of the authorised operator or another place authorised by customs. The specified criteria may include an appropriate record of compliance with customs and other related laws and regulations, a system of managing records to allow for necessary internal controls, financial solvency, and supply chain security (Article 7(7) of the WTO TFA)	Unclear treatment of carbon-intensity compliance within AEO/ trusted trader frameworks	Missed opportunities for facilitation; uncertainty for compliant operators

Uncertainty about how carbon-intensity compliance should be reflected in AEO or trusted trader programmes may further reduce the effectiveness of existing facilitation tools, as compliant operators may not benefit from simplified procedures if these new requirements are not integrated into existing AEO frameworks.

Where de minimis thresholds are part of carbon-intensity regulations, they can introduce an additional enforcement challenge. In this case, customs authorities must determine whether an importer’s cumulative imports of covered goods exceed a volume or value threshold over a defined period, which requires linking consignments across time and traders. This might add complexity to risk management and compliance controls at the border.

5.1.2. Institutional and operational challenges for key actors

Carbon-intensity requirements create distinct challenges for each actor involved in border processes, highlighting the need for coordinated implementation. Carbon-intensity measures introduce further complexities linked to their reliance on quantified, methodology-dependent emissions data and verification systems. Table 4 provides an overview of potential disruptions by actor type, distinguishing between institutional, procedural, informational and technical dimensions. Economic operators may face increased compliance steps and uncertainty regarding data and methodologies, particularly where requirements differ across jurisdictions. Customs authorities may experience pressure on clearance times and post-clearance workloads as their role expands beyond traditional controls, while other agencies (including border agencies as well as authorities with compliance and enforcement mandates at and beyond the border) may need to develop new guidance, registries and coordination mechanisms. Accreditation bodies and verifiers face capacity and standardisation challenges, and central or supranational authorities, where applicable, must ensure consistency and interoperability across jurisdictions.

Table 4. Potential disruptions and challenges by type and key actor in the border ecosystem

Actor	Procedural disruptions	Informational disruptions	Technical disruptions
Economic operators (importers, exporters, producers, indirect customs representatives)	Additional compliance steps (authorisations, certification, verification); longer preparation times; increased interaction with multiple authorities	Difficulty accessing reliable product-level and upstream emissions data; uncertainty over accepted methodologies, default values and documentation	Need to adapt internal IT systems to multiple reporting formats and portals; limited interoperability with public registries or customs platforms
Customs authorities	Increased manual processing at clearance; pressure on release times and post-clearance workloads	Limited ability to assess credibility of self-declared emissions data; partial visibility over upstream production and verification outcomes	Legacy systems not designed to ingest or cross-check environmental data or digital credentials
Other border agencies, as well as authorities with compliance and enforcement mandates at and beyond the border (environmental, tax, market surveillance authorities)	Need for structured coordination with customs and other agencies	Responsibility for defining and updating methodologies, emission factors and compliance criteria; risk of inconsistent guidance	Development and operation of registries and reporting platforms; challenges ensuring secure and interoperable data movement
Accreditation bodies and third-party verifiers	Pressure on verification timelines; coordination challenges with authorities	Application of complex and evolving methodologies; access to reliable upstream data	Limited standardisation and interoperability of digital verification outputs
Central or supranational authorities (where applicable), acting as competent authorities for the management of carbon-intensity-related obligations	Management of transitional arrangements and regulatory updates	Consolidation and analysis of compliance data across economies; ensuring consistent interpretation	Design and governance of shared registries, surveillance systems or data hubs; interoperability with national IT systems

5.2. Potential solutions offered by trade facilitation tools in the enforcement of carbon-intensity requirements

As the introduction of carbon-intensity requirements is likely to have implications for existing border processes, a range of established and new trade facilitation and digitalisation tools across policy domains can help border agencies address these challenges. Many of the operational frictions associated with carbon-intensity requirements relate to areas highlighted in Section 4, suggesting that they can be integrated into border processes by relying on established procedural and digital frameworks. At the same time, carbon-intensity requirements introduce additional data elements, verification steps and coordination needs, implying that existing tools may not be sufficient in their current form and could require adjustment or supplementation.

5.2.1. Leveraging automated and digital customs clearance

Digital platforms, in particular Single Window environments, may play a role in facilitating document and data movement for carbon-intensity requirements. While many economies worldwide have developed different national trade Single Windows to allow traders to submit information through a single digital entry point, some regions have also established regional Single Window frameworks. For example, the EU Single Window Environment for Customs1, introduced in 2022, is designed to enable electronic data sharing between customs administrations and other border authorities. While its primary focus to date has been on authority-to-authority exchanges, future phases envisage broader integration with business-to-government processes. The ASEAN Single Window, operating since 2018, connects the National Single Windows of ASEAN Member States and aims to enable the cross-border exchange of electronic trade documents, such as certificates of origin and customs declaration data, to expedite clearance and support paperless trade.2

Box 2. Using condition codes and regulatory identifiers in customs clearance

A common approach to enforcing non-tariff regulatory requirements at the border is the use of condition codes or regulatory identifiers embedded in customs declarations, alongside HS-based product classification. These identifiers signal whether specific conditions (such as licences, authorisations, exemptions or thresholds) are met and can be verified automatically by customs systems, without reassessing substantive compliance at clearance.

Condition codes and regulatory identifiers are widely used across jurisdictions worldwide. For instance, in the European Union, HS codes are extended through the 10-digit TARIC classification, which integrates tariff and non-tariff measures and is complemented by document and condition codes (such as Y-codes) to indicate licensing requirements, exemptions or regulatory conditions directly in the customs declaration. In the United States, HS codes are combined with Partner Government Agency (PGA) message sets requiring licence or permit references for agencies such as the EPA, FDA or USDA. Canada’s Single Window Initiative similarly links HS codes with Other Government Department (OGD) identifiers to validate licences and certificates electronically. In several ASEAN economies, national Single Windows connect HS-based declarations with licence or certificate references for sanitary, environmental or strategic goods controls. Under CITES and the Basel Convention (see also Annex C), HS codes are paired with permit or notification identifiers issued by environmental authorities to determine admissibility or prohibitions without reassessing underlying environmental decisions at the border.

Source: Drawing on (Grainger, 2024[24]).

Machine readable codes also support automated and streamlined customs clearance. As carbon-intensity requirements necessitate additional customs checks (such as the verification of authorisation or eligibility for exemptions), the use of regulatory identifiers or references to electronic registries can help automated clearance without assessing detailed emissions information at the point of enforcement (see Box 2). In addition, AEO programmes could be adjusted to reflect compliance criteria, risk management and trade facilitation benefits with respect to carbon-intensity requirements, although the design and implications of such adjustments would need careful consideration. Where carbon‑intensity regulations include de minimis thresholds (e.g. based on mass or value), real‑time customs data and condition codes could be used to monitor cumulated imports and automatically flag when an importer reaches the threshold.

5.2.2. Leveraging customs risk management tools

The targeted use, adaptation and modernisation of customs risk management tools including the development of new risk criteria, risk indicators and profiles (WCO, n.d.[25]) can help address emerging fraud and circumvention risks. As carbon-intensity requirements introduce new risk factors such as product misclassification, circumvention through changes in routing or processing, “place-of-origin washing” or the manipulation of emissions-related information., these risks can be incorporated into existing risk‑based control frameworks. Customs authorities are increasingly using risk management and surveillance systems to assess compliance using advance and real‑time data (OECD, 2025[21]), suggesting that emissions‑related risks could be integrated into established systems and processes rather than requiring entirely new control mechanisms.

In this context, risk management systems’ parameters may need to be reviewed and, where appropriate, adapted. This may involve developing new risk criteria that incorporate emissions-related variables, registry references or verification status into automated risk profiles, as well as identifying indicators of unusual routing patterns, repeated use of thresholds or inconsistencies in emissions data. Strengthening data linkages between customs systems and relevant registries or other authorities can support cross-checks of declarations and improve the reliability of risk assessment. Enhanced analytical approaches, including pattern analysis across shipments and traders, can help detect circumvention strategies, while targeted post-clearance audits can complement controls at clearance where risks relate to complex upstream information. Closer inter-agency co‑operation between customs, environmental regulators and accreditation bodies can further improve information exchange.

5.2.3. Leveraging border agency co-operation to address specific issues at the border

Carbon‑intensity requirements can raise specific implementation issues at the border that may be particularly challenging for any single authority to resolve. These include specific cases such as the correct identification and handling of non-physical goods at the border (i.e. electricity), goods placed under specific customs procedures (e.g. inward and outward processing), and goods traded by indirect and direct customs representatives. Targeted co‑operation between customs and other relevant authorities, notably environmental regulators, accreditation bodies and energy or product‑specific agencies, can help address these challenges. For instance, practical mechanisms such as standing or ad‑hoc inter‑agency working groups, targeted manuals and trainings for officials, and coordination on risk management issues can support joint interpretation of these complex cases.

Notes

← 1.  The EU SWE-C, introduced in 2022, enables electronic data sharing between customs and other border authorities. It is being rolled out in phases, with a Business-to-Government component expected by 2031. National Single Windows must be operational by 2025 (European Commission, The EU Single Window Environment for Customs[28]).

← 2.  See https://asean.org/our-communities/economic-community/asean-single-window/.