The European Commission recently published a long-awaited simplification review of the EU Deforestation Regulation (EUDR), alongside a draft delegated act that would materially alter the list of products subject to the law's due diligence requirements. The package aims to provide clarity to operators and stakeholders ahead of the Regulation's entry into application by the end of the year. (see, also, Regulatory Alert-EU, Issue 1333/2026 for more details on this development).

Vietnam has issued a new list of 70 prioritised technologies under Decision No. 23/2026/QD-TTg, signed on 15 May 2026. The decision, effective from 1 July 2026, replaces the previous framework introduced in 2020.

The National Energy Administration and three other government agencies recently issued an action plan that aims to promote the mutual empowerment of artificial intelligence and energy. The plan seeks to ensure secure and reliable energy supply for computing power facilities and enhance diversified power supply capabilities.

A French family-owned fashion retailer is entering a new era of sustainable transformation. KIABI, via its Hong Kong sourcing office, handles the company’s Asia-Pacific supply chain management. The city’s strength lies in its innovative green finance model, which links supplier performance to financial incentives, rewarding measurable improvements in energy efficiency, water management, and waste reduction. This approach turns sustainability progress into economic value, motivating factories to accelerate decarbonisation and cleaner production.

On 13 May 2026, the European Commission published a draft implementing Regulation, with accompanying annexes, setting out rules for converting a carbon price paid in a third country into a reduction in CBAM certificates to be surrendered. Parties wishing to submit feedback may do so until 10 June 2026. The Regulation is intended to apply from 1 January 2026.

Hong Kong traders exporting to the European Union should take note of recent developments concerning Regulation (EU) 2023/1115 on deforestation-free products (the “EUDR”). On 4 May 2026, the European Commission published a package of measures aimed at simplifying implementation while maintaining the core obligations of the regime. These developments are relevant for any business, including exporters based outside the EU, selling covered commodities or derived products in the EU.

From the survey, it was also notable that many enterprises have a high regard for Hong Kong’s role in promoting green and sustainable development of GBA enterprises. The percentage of those who “fully agree” and “quite agree” that Hong Kong has a variety of advantages in this regard was in the range 70% to 90%. Compared with the findings of the 2023 survey, the percentage of those acknowledging these various advantages increased overall. The most notable improvements are seen in two areas: Hong Kong’s rich experience in green services and the environmental certification system that in line with European and US markets, with the percentage of respondents who either “fully agree” or “quite agree” rising respectively from 71% and 72% to 90%. These two factors also remain the most highly recognised strengths among enterprises. Beyond that, many respondents also cited Hong Kong’s advantage as an international financial centre when it came to securing green financing opportunities (83%).

Overall, 96% of the surveyed GBA enterprises indicated plans to increase or maintain their level of ESG investment in the next two years. Of these, 66% said they planned to increase ESG funding, up 26 percentage points from the 40% with the same intent in 2024 and a three-year high. The surveyed GBA enterprises expect their average ESG investment to be about HK$874,771 over the next two years, a surge of 89% compared to the HK$462,535 recorded for 2024 and a clear indication that such enterprises have become more proactive in terms of implementing green practices.

The European Union’s newly articulated “One Europe, One Market” Roadmap sets out an ambitious programme to deepen integration, simplify regulatory frameworks, and reinforce the EU’s economic resilience by 2027. While the initiative is primarily inward-looking, its implications extend well beyond the EU’s borders. For Hong Kong traders exporting goods to the EU, the Roadmap signals both opportunities and adjustments in how market access, compliance, and competition will evolve over the coming years.

The landscape of European trade is shifting once again as the European Parliament prepares to debate significant updates to the Carbon Border Adjustment Mechanism (CBAM). On 14 April 2026, the European Parliament’s lead negotiator, S&D lawmaker Mohammed Chahim, released a draft report that takes a firm stance on the proposed expansion of the EU’s carbon border tax. While the European Commission had previously suggested introducing flexibility to the mechanism, Chahim’s proposal seeks to strip away those safety valves in favour of long-term legal certainty and climate integrity.