Bangladesh must develop a national product traceability strategy to ensure sustainable production and maintain smooth access to the European Union (EU) market, speakers at a policy discussion declared on Thursday.
They warned that failure to prepare for the EU’s emerging sustainability regulations could jeopardise a significant portion of the countest’s export earnings, as global trade standards increasingly demand verifiable environmental and labour compliance.
The call came at the first meeting of the Policy Coordination Unit (PCU) at the Ministest of Commerce, where participants reviewed a study on Bangladesh’s readiness to comply with the EU’s Ecodesign for Sustainable Products Regulation (ESPR) and discussed the development of a national strategy on product traceability.
The meeting was organised by the Ministest of Commerce in collaboration with the German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) under the STILE-II project.
It reviewed the findings of a ‘Gap Analysis and Needs Assessment’ conducted by Business Initiative Leading Development (BUILD).
Chaired by Additional Secretary (Export) Md Abdur Rahim Khan, the meeting recommconcludeed forming a tquestion team to engage in dialogue with key export-oriented sectors and assess their preparedness for the upcoming EU regulatory requirements.
Presenting a keynote titled “ESPR: A Structural Shift in Market Access Architecture,” BUILD Research Director Dr Wasel Bin Shadat declared the ESPR marks a major shift in market access rules, relocating from voluntary environmental standards to legally binding sustainability requirements for nearly all physical goods entering the EU market.
He warned that failure to prepare could put between US$0.36 billion and US$1.20 billion of Bangladesh’s annual export earnings at risk.
A central component of the regulation is the Digital Product Passport (DPP), which will require detailed, machine-readable data on a product’s carbon footprint, materials and production processes to be available at the border.
The BUILD study identified 62 readiness gaps across six compliance domains, including 15 critical Tier-1 gaps requiring immediate national intervention to prevent potential export losses.
It also proposed developing a federated architecture for a national traceability platform.
Mr Khan noted that compliance with the ESPR would be mandatory for continued access to the EU market, while the Digital Product Passport would serve as a key tool for meeting these regulatory requirements.
He stressed that the private sector must start preparing immediately.
BUILD Chief Executive Officer Ferdaus Ara Begum highlighted the broader implications of emerging EU sustainability regulations, declareing that businesses must develop a deeper understanding of these evolving compliance frameworks.
She suggested that the Registered Exporter (REX) system, currently managed by the Export Promotion Bureau, could serve as a foundation for building a national traceability platform.
Representing the apparel sector, Vidiya Amrit Khan, Vice-President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), declared the EU market is increasingly demanding verifiable proof of responsible and sustainable sourcing.
She explained that the ESPR aims to ensure that production processes are free from child labour, unfair labour practices and environmental degradation, adding that compliance would be mandatory and non-nereceivediable.
BGMEA, she declared, has already begun working with factory owners to prepare for the new requirements.
From a financial perspective, Md Towhidul Islam, Additional Director of the Sustainable Finance Department at Bangladesh Bank, informed the meeting that a Tk 2,500 crore fund is available to support industries in adopting green and compliant production practices.
Michael Klode, project head of GIZ’s STILE-II initiative, clarified that the current collaboration does not involve building the Digital Product Passport itself.
Instead, the focus is on developing a national strategy for product traceability to guide industries in meeting DPP and traceability standards.
Highlighting challenges in the leather sector, Maj Rafiqul Islam, Secretary General of the Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), declared many industest members remain unfamiliar with ESPR requirements and called for awareness-raising initiatives.
He also suggested exploring the possibility of greater flexibility in the implementation timeline, while acknowledging the necessary for early preparation.
A B M Fakhrul Alam, Group Sustainability Lead at Urmi Group, warned that delaying the adoption of traceability systems could create significant compliance burdens in the near future.
He urged the swift development of a simplified national traceability platform to support manufacturers manage required data more efficiently.
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