On 15 April 2025, the European Commission introduced new guidance and simplification documents to ease the implementation of the EU Deforestation Regulation (EUDR). Hong Kong sellers may recall that the EUDR will become effective at the end of 2025. These updates aim to reduce administrative burdens for companies and ensure consistent application across the EU.

EU Member States are considering relaxing some requirements of proposed EU rules regarding green claims. According to the negotiating document, as reported by MLex, the current subjects under consideration are labelling systems, verification, and information for consumers. These possible changes come ahead of the next round of talks with the European Parliament, scheduled for 24 April 2025.

While global climate issues have become ever more pressing, countries around the world have accelerated their formulation of remedial environmental policies. In the case of China, it has set out to fulfil the commitments it made as part of the Paris Agreement by setting “dual carbon” goals relating to carbon peaking and carbon neutrality. In line with central government policies, the GBA cities are prioritising their development of a green, low-carbon and circular economic system. Against this backdrop, all GBA enterprises will have to comply with the relevant environmental laws and regulations in order to mitigate any legal or financial risks. Many are actively responding to the environmental concerns of consumers by implementing green and environmentally friendly initiatives. At the same time, they are also striving to optimise their ESG adoption process. Overall, 98% of the surveyed GBA-based businesses planned to increase or maintain their level of ESG investment in the next two years, a 4 percentage point increase from 2023 (94%). Of these, 40% said they planned to increase funding for ESG elements, a higher figure than the 30% recorded for the 2023 survey.

To tackle the waste problem and promote sustainable economic development, the EU is pressing ahead with implementing the Packaging and Packaging Waste Regulation (PPWR) to further regulate packaging and packaging materials of importers, manufacturers, suppliers and agents. In a webinar hosted by HKTDC Research, Navigating the EU’s Packaging and Packaging Waste Regulation: What Hong Kong Businesses Need to Know, to help Hong Kong SMEs understand and cope with the major changes.

The Guangdong provincial government issued an Action Plan for Energy Conservation and Carbon Reduction for 2024-2025 on 23 December. The plan calls for reduction and substitution of fossil energy consumption and increased consumption of non-fossil energy. It also includes measures aimed at promoting energy conservation and carbon reduction in the petrochemical and chemical, construction and transportation industries, and the adoption of energy-consuming products and equipment. The aim is to reduce carbon dioxide emissions by 9.1 million tons in key sectors and industries by 2025.

India’s Central Board of Indirect Taxes and Customs (CBIC) has scrapped the duty-free import scheme for solar power cells and modules, effective from 17 December 2024. The Manufacturing and Other Operations in Warehouse Regulations (MOOWR) scheme allowed companies to store imported solar modules and cells in bonded warehouses without immediately incurring customs duties until they start producing solar projects. The applicable basic customs duties for solar modules and solar cells are 40% and 25%, respectively. The scheme also benefits other sectors such as electronics, pharmaceuticals, food processing, leather products and textiles.

It has been reported that on 16 January 2025, the new European Commissioner for the Climate, Net Zero and Clean Growth, Wopke Hoekstra, told Members of the European Parliament that there is “an opportunity to significantly simplify the design” of the Carbon Border Adjustment Mechanism (“CBAM”). Other influential bodies, including a parliamentary party and the International Chamber of Commerce, are also seeking to reduce the CBAM’s burden on businesses.

The European Commission has recently announced that it would be stepping up its efforts to boost net-zero technologies. It is launching two new calls for proposals with a budget of €3.4 billion to accelerate the deployment of innovative decarbonisation technologies in Europe, including electric vehicles batteries. It is also launching an event to accelerate the production of renewable hydrogen in the European Economic Area (EEA) with a budget of €1.2 billion from EU funds.

Driving supply chain diversification, expanding into new markets – especially the much-coveted ASEAN region – and practising green and sustainable development have essentially become the consensus among many of the enterprises participating in the 2024 survey. In many ways, all of these topics can be seen as interrelated and complementary. Following on from the 2023 survey studies of the latter two topics, HKTDC Research and UOB Hong Kong worked together again in the third quarter of 2024 to track the green and sustainable development process of Greater Bay Area (GBA) enterprises, as well as their investment intentions. They also examined how GBA enterprises, against a backdrop of establishing diversified supply chains domestically and overseas, are adjusting their business strategies, as well as their trading and investment interactions with ASEAN countries.

Archireef is an HKU spin-off startup that prides itself on providing an innovative means of restoring coral reefs – the world’s first 3D-printed reef tiles made from clay. The company was founded in 2020 by Vriko Yu, a PhD student in Biological Sciences at HKU, and her supervisor David Baker, now Archireef’s Chief Scientist Officer. The innovative solution they developed emerged from their experience of restoring coral reefs along Hong Kong’s Sai Kung coast.