Environmental Goods Agreement: Draft Report “Trade Sustainability Impact Assessment”

The European Commission has published the Draft Final Report on the “Trade Sustainability Impact Assessment (SIA) in support of negotiations on the Environmental Goods Agreement (Green Goods Initiative)”.  This document will be discussed on 1 February 2016 in the framework of the Civil Society Dialogue Meeting organised by the DG TRADE of the European Commission.

Copy of the document is available at the following link:


The Environmental Goods Agreement aims at removing tariff barriers to trade in selected countries including China, Israel, Japan, Norway, Switzerland, and Turkey. For this reason, this issue is considered of importance for EOS Members.

Products under the code 4403 “Wood in the rough, whether or not stripped of bark or sapwood, or roughly squared” are not included in the EGA negotiation.

In a nutshell the key elements of the Report

Environmental goods focuses on goods with an environmental end use, which are goods that contribute to sustainable development or less environmental degradation in their application. The EGA list, however, was formed in the lead-up to an agreement where political arguments are taken into consideration.

Although there were no formal criteria for defining “environmental goods”, parties to the EGA negotiations took into account the considerations:

  • Goods with an environmental end-use;
  • Goods that contribute to tackling different environmental challenges along the 10 environmental areas (including: cleaner and renewable energy; energy efficiency; resource efficiency, etc)
  • Part of a system (e.g. waste management chain, water treatment);
  • Main product and its parts;
  • Industrial goods with major focus on industrial applications, a few consumer goods and equipment;
  • Positive environmental.

Tariffs imposed on environmental goods and services differ greatly between regions. Overall, the tariff structure in EGs would be equivalent to a 3.4 % uniform tariff. The EU, the United States and East Asia apply the lowest tariffs on average while South Asia, Sub-Saharan Africa and Latin America and the Caribbean apply the highest.

DG Trade analysis concluded that a successful conclusion of the EGA which included a broad range of identified environmental goods could lead to up to a 0.9 % or EUR 21 billion increase in the value of trade worldwide.

The construction sector is responsible for more than a third of global resource consumption, including 12 % of all fresh water use, and significantly contributes to the generation of solid waste, estimated at 40 per cent of the total volume.  This is why subsidies and environmental standards should continue to play a big role in incentivising the adoption of green building technologies. 

The Report put great emphasis on the importance of instruments for proofing the legality of harvested wood: indeed the document states that “labelling schemes for sustainably harvested wood (as opposed to wood produced from deforestation) play a significant role in encouraging the development and commercial proliferation of more efficient and more environmentally friendly products” (please see page 50 of the Report). Moreover, wood is certainly  considered a material that has the “potential to be sustainable and renewable. The sensitivity of wood is that overharvesting this resource leads to deforestation, which could create a host of environmental problems from soil erosion to carbon emissions, which could potentially be mitigated sustainability certification of forests”.

The Report suggests that considering that “certification usually comes with a cost, wood products from certified sustainable timber plantations could command higher premiums compared to non-certified wood products”. (Page 70)

This document recognises that strict building efficiency regulation should consider how materials can be used for improving the insulation level of the building in Europe. Renewable construction materials, such as wood, not only produce little to no pollution or waste when they are grown and processed, but also improve building energy efficiency, and companies in Europe are the world’s largest source of sustainably grown wood.

Concerning plywood (HS 441239), the report states that plywood made from coniferous wood is a construction material, which demonstrates strong EPP (Environmentally preferable products) features. It can be used for indoor and outdoor building projects offering durability and lightness. With regard to a life-cycle analysis, wood uses less water and causes less GHG emissions. However, there is concern with regards to glues used to glue plies together as these produce gases which are not environmentally friendly. (Page 150)

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