Bangladesh Export Industry Faces EU Compliance Test

Bangladesh Export Industry Faces EU Compliance Test

Bangladesh’s export sector, particularly ready-made garments (RMG), is facing a major challenge as the European Union introduces legally binding rules to ensure environmental and human rights standards across supply chains.

The RMG industry, which accounted for 60 per cent of Bangladesh’s $42 billion apparel exports to the EU last year, must fully comply with the new Corporate Sustainability Due Diligence Directive (CSDDD) by 2029. Failure to do so could result in reduced orders, heavy fines, or loss of market access.

The CSDDD requires companies to identify and address actual and potential risks to human rights and the environment, while also preparing a climate transition plan. This means Bangladeshi exporters will need to cut carbon emissions and adopt renewable energy solutions.

Experts noted that although Bangladesh has made progress in workplace safety and labour rights, significant gaps remain. Heavy reliance on fossil fuels, weak enforcement of labour standards, and wage disputes continue to pose risks.

Some factories have received recognition for green initiatives, but energy transition efforts remain insufficient. Over 90 per cent of Bangladesh’s energy demand is still met through fossil fuels, locking the country into high-carbon dependency for at least two more decades.

Analysts warned that the new EU rules are both a challenge and an opportunity. While compliance will increase production costs, EU buyers will be obliged to pay fairer prices and uphold ethical sourcing. This could strengthen Bangladesh’s long-term competitiveness if reforms are implemented effectively.

Business leaders have urged European partners to offer fair pricing so that compliance with the new standards can be achieved without disrupting livelihoods or undermining export growth.