"Preemptive ESG Data Collection Is Essential"...KCCI and MOTIE Hold Seminar on EU Trade Regulations

EU Green Trade Barriers Are Rising
"Preemptive Life-Cycle Risk Management Is Key to Securing Markets"

As the European Union's (EU) green trade barriers, such as the introduction of the Carbon Border Adjustment Mechanism (CBAM), continue to rise, a recommendation has been made that companies should secure trust in global markets in advance by inspecting the entire life cycle of their products and managing risks preemptively through the collection of ESG (environmental, social, and governance) data.

The Korea Chamber of Commerce and Industry (KCCI) announced that on the 11th it held the "Seminar on Changes in the EU Trade Environment and Response Strategies" at the KCCI building in cooperation with the Ministry of Trade, Industry and Energy. The event was organized to review key EU regulations such as CBAM and the Corporate Sustainability Due Diligence Directive (CSDDD), whose implementation is becoming more concrete, and to enhance companies' practical response capabilities. Around 150 participants attended the seminar, including Yoon Cheolmin, Head of the International Trade and Commerce Division at KCCI, Park Jeongseong, Deputy Minister for Trade at the Ministry of Trade, Industry and Energy, and Ugo Astuto, Ambassador of the EU Delegation to the Republic of Korea, as well as corporate representatives.

Yoon stated, "We must seize the EU's new trade norms as an opportunity for business innovation and turn sustainability and transparency into corporate competitiveness," adding, "What is needed is not ex-post responses, but a preemptive and systematic management strategy that covers the entire process from planning and production to distribution."

Deputy Minister Park said, "This is the time when the government and companies must respond as one team to the EU's new trade order," and added, "The government will provide full support for companies' expansion into the global market, serving both as a shield and a compass." Ambassador Astuto stressed, "The EU's environmental regulations are not intended to burden companies but are part of the preparation process for future competitiveness," adding, "The EU will support a predictable and transparent transition through close cooperation with the Korean government and companies."

Seeking opportunities for strategic trade cooperation between Korea and the EU

The first session defined EU regulations not merely as environmental regulations but as a "new trade order," and discussed strategic response measures to use them as an opportunity to strengthen corporate competitiveness, as well as the importance of Korea-EU cooperation. Jang Youngwook, Head of the North America and Europe Team at the Korea Institute for International Economic Policy (KIEP), said, "The EU is currently striving internally to restore industrial competitiveness through regulatory rationalization, while externally it is contemplating how to respond to changes in the global economic order driven by trade pressure from the second Trump administration," and advised, "Korean companies should identify both the opportunity factors and the challenges presented by EU regulations and leverage them as strategic assets."

Walter Van Hattum, Minister-Counsellor at the EU Delegation to the Republic of Korea, said, "At a time when the global trade environment is under challenge, the EU is pursuing a trade agenda that strengthens multilateralism, diversifies trade, and consolidates economic security," and emphasized expanded cooperation between the two sides by adding, "The EU hopes to jointly respond to changes in the trade environment with Korea, a key partner, and to continuously expand cooperation to strengthen economic security and supply chain resilience."

"Urgent need to diagnose risks across the entire product life cycle"

The second session focused on detailed provisions and response strategies for each system to support companies' practical responses. Ko Soonhyun, Vice President of Eco & Partners, said regarding CBAM and the battery regulation, "We must now move away from a system focused on managing emission facilities at business sites and completely transform our business structure into a 'life cycle approach' that covers the entire process from product design and raw material procurement to production and disposal," and pointed out, "If the chief executive officer does not lead the change, companies will find it difficult to avoid massive environmental cost expenditures."

Kim Dongsoo, Head of the ESG Research Institute at Kim & Chang, said, "For large corporations to comply with the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD), they will need information from their suppliers, which means the actual scope of impact will be considerable," and added, "Suppliers should also respond with the possibility of indirect application in mind." Next, Cho Seongmun, Head of the Green Transition Office at the Korea Environmental Industry & Technology Institute, said, "Starting this year, delegated acts setting eco-design requirements for each product group will be adopted sequentially," and advised, "If products fail to meet 16 requirements, including durability, reparability, and carbon footprint, their distribution within the EU may be restricted, so companies need to check in advance their level of compliance with these requirements and preemptively secure relevant supporting data."

Regarding the Packaging and Packaging Waste Regulation (PPWR), Lee Hanyeong, CEO of the Eco-friendly Packaging Technology Testing Institute, stressed, "In line with its implementation in August, companies must operate a realistic response roadmap, such as reviewing the entire packaging supply chain and securing the stability of recycled material supply." Lawyer Park Soyoung of Yulchon LLC emphasized, "Since the Foreign Subsidies Regulation can directly affect the transaction structure and timetable of Korean companies participating in investment, mergers and acquisitions (M&A), and procurement within the EU, it is necessary to accurately understand the structure of the system, including the concept of subsidies, notification thresholds, and investigation procedures, and to establish pre-checks and internal response systems."

In the final session, the support programs currently being implemented by the Korea Trade-Investment Promotion Agency (KOTRA) for entry into the EU were introduced. Lee Hyoyeon, Head of the Trade Cooperation Team at KOTRA, said, "As EU trade regulations are being fully implemented this year, corporate demand for information is surging," and added, "KOTRA plans to swiftly share local developments and substantially ease the burden of corporate responses through the Ministry of Trade, Industry and Energy's 'Emergency Support Voucher' program."

Meanwhile, KCCI plans to hold this seminar on a roadshow basis, focusing on export and manufacturing hub regions such as Changwon and Busan following Seoul, and will continue to support corporate responses to changes in EU systems through related seminars and policy recommendation activities in the future.

This content was produced with the assistance of AI translation services.