Green Rules, Real Risk: Thailand's Trade Survival Test

 

Thailand has no EPR law, no lead agency and a deadline that has already passed, leaving millions of small exporters exposed to EU risk.

 

Since 12 August 2026, any Thai exporter shipping packaged goods into the EU has technically fallen under the bloc's new Packaging and Packaging Waste Regulation (PPWR) – whether they know it or not.

 

Combined with the EU's Carbon Border Adjustment Mechanism (CBAM), now in its financial phase, the rules mark a structural shift in how Europe, Thailand's fourth-largest export market, decides who gets shelf space. EXIM Thailand, the state export credit agency, has already warned that unprepared exporters risk losing orders outright.

 

For Nattinee Netraumpai, Unilever Thailand's Head of Corporate Affairs, Communications and Sustainability, the timing is instructive rather than alarming.

 

In an exclusive interview for this Sustaination series, she argued that businesses treating sustainability as a discretionary ESG project, rather than a core strategy, will eventually find the market forcing the issue. 

 

Unilever, whose products sit in 99% of Thai households, says it began reformulating its supply chain years ahead of these rules taking legal effect.

 

 

An industry under multiple, simultaneous pressures

Unilever's positioning sits inside a wider reckoning across the FMCG sector.

 

Deloitte's 2026 Global Consumer Products Industry Outlook, based on a survey of 300 senior executives, describes companies navigating overlapping demographic, political, environmental and technological shifts at once – with deglobalisation and shifting trade policy creating pressure points firms can no longer manage passively.

 

Margin compression, price-conscious shoppers and a battle for digital talent compound the picture.
 

 

 

Crucially, the sector's sustainability credibility problem has not gone away. Deloitte's research with the Ad Council has documented a persistent gap between what shoppers say they want and what they buy, with price remaining the primary barrier even among consumers who say they care. 

 

A related Deloitte study found sustainability claims increasingly leave shoppers confused and sceptical. That context matters: corporate sustainability claims, including Unilever's own figures, are self-reported and audited internally against company-set targets rather than independently verified against a common benchmark.

 

 

The numbers behind the claim

Unilever says its global operations (Scope 1 and 2 emissions) are 77% toward its 2030 net-zero target, achieved through renewable energy, electrified logistics and direct power purchase agreements.

 

The more consequential figure, by its own account, is that over 70% of its emissions sit further upstream, in raw materials and packaging – why it reformulated its home care range, replacing petroleum-derived surfactants with sugar-derived, biodegradable enzymes.

 

On plastics, Unilever's global target is for all packaging to be reusable, recyclable or compostable by 2030 (rigid) and 2035 (flexible, such as sachets), alongside cutting virgin plastic use by 30% this year, rising to 40% within two — currently 29% complete, it says. 

 

In Thailand, the company claims 83% of its plastic packaging already meets that standard, against a 57% global average.

 

It also claims 100% packaging collect-back globally relative to volumes sold and is lobbying for Thailand to adopt an Extended Producer Responsibility (EPR) law—which does not yet exist—to formalise a collection system that currently barely functions.
 

 

 

 

Where AI actually fits — and where it doesn't

Much of that measurement infrastructure did not exist a decade ago, and Nattinee was candid that some older commitments have simply persisted because there was previously no reliable way to verify or retire them. 

 

She described AI's role in three tiers: visibility and measurement (real-time tracking of energy, water and material use, which is how Unilever identified packaging and raw materials — not factories — as its largest emissions source); forecasting and optimisation (route-planning that consolidates delivery drops, and drone monitoring of palm oil concessions to flag deforestation before it happens); and simulation, where digital twins model production changes — such as cutting a dishwashing-liquid manufacturing cycle from roughly 12 hours to two — without physical waste from trial batches.

 

This mirrors a broader pattern: Research and Metric's 2026 FMCG analysis identifies AI-driven demand forecasting as one of the sector's defining shifts.

 

The caveat is the same one that applies to Unilever's own emissions figures: AI improves the speed and granularity of measurement, but the targets and disclosure choices behind that data remain set by the companies reporting them. 

 

Faster verification is not independent verification — a distinction Thai SME exporters, who generally lack comparable tooling, will need to reckon with as EU due diligence rules increasingly expect traceable data as a baseline for market access, not a competitive edge.

 

 

Where the real story sits: the SME gap

The more provocative element concerns the roughly 3.3 million Thai SMEs that make up 99% of the country's businesses — widely described as the backbone of the economy. Many export into the EU and are already bound by PPWR obligations. 

 

Yet, as Nattinee acknowledged, there is currently no single Thai agency clearly tasked with preparing them, despite the EU having signalled these changes for years.

 

Independent research supports the concern. Analysis from Krungsri and trade bodies, including the EU-ABC Thailand, has flagged rising compliance costs and documentation burdens under PPWR for exporters of packaging-intensive goods, alongside CBAM exposure expected to widen in scope from 2028.

 

Academic research on Thai SME export performance similarly points to persistent knowledge and capability gaps.

 

Into that gap, Unilever has positioned itself as an informal compliance coach: its roughly 50,000 global suppliers must sign its Responsible Partner Policy, committing to deforestation-free sourcing, human rights due diligence and climate targets — effectively privatising a function that, in other markets, governments would typically lead.

 

It has also committed to a "living wage" standard with suppliers, at 56% sign-up in Thailand against a 50% global target.

 

Whether that model is scalable — or whether it merely advantages SMEs already inside a multinational's supply chain, leaving independent exporters exposed — is arguably the sharper policy question for regulators than any single company's net-zero progress.

 

 

The generational lever

Unilever also frames sustainability as a talent strategy. Nearly half its roughly 2,800 Thai employees are from younger generations, and the company runs a "Gen Z Board" feeding into campaign and consumer-trend strategy. 

 

Globally, it has pledged to build future-ready skills for 10 million young people by 2030 and co-developed a circular economy curriculum with Thailand's Board of Trade, now used at university level with plans to expand nationally. The underlying bet is that younger consumers and employees increasingly treat environmental credibility as a baseline expectation, not a bonus.

 

 

What the roundtable should press on

The unresolved questions are structural, not corporate: who in the Thai government actually owns readiness for PPWR, CBAM and the EU rules still to come?

 

Can an EPR law move from advocacy to statute before Thai exporters face tariffs or delisting? And can support reach SMEs outside a large multinational's supply chain – the exporters with no "big brother" coaching them at all?

 

Whether Thailand's wider SME base gets to test Unilever's claim that sustainability pays for itself may depend less on any single company's roadmap than on whether government catches up with a deadline that, as of this August, has already passed.

 

 

This is the third article in a series exploring Thailand's sustainability transition ahead of a roundtable of business and policy leaders, convening in late September to discuss how the country can turn climate pressure into competitive advantage.