In 2012, the furniture industry was still in its early stages but faced a major challenge. The news came from the Chongqing Foreign Trade and Economic Cooperation Commission, revealing that the EU had introduced new regulations known as the "Wood and Wood Products Regulations and the New Environmental Design Directive." This directive requires all manufacturers involved in the timber production and processing chain—especially those exporting to the EU—to obtain an FSC (Forest Stewardship Council) certification, often referred to as the "ID card" for sustainable wood sourcing.
According to reports, globally only about 10% of timber is FSC-certified, while in China, less than 1% of the wood available on the market meets these standards. This scarcity has created a significant hurdle for Chongqing-based furniture exporters, who now face rising costs and a shrinking profit margin. As a result, their traditional price advantage is being eroded, making it harder to compete in the European market.
The new EU directive, which took effect on March 3, mandates that all companies involved in the timber supply chain must provide detailed documentation proving the legal origin of their wood. This includes information such as the country of origin, forest details, volume, weight, and the supplier’s name and address. These requirements apply not only to products made within the EU but also to imported wood and wood products from outside the region.
This regulation has been labeled a “green barrier†by many exporters, as it adds layers of complexity and cost to the supply chain. With limited access to certified wood, companies are forced to invest more in compliance procedures, including inspections, testing, and public relations efforts. These added expenses are expected to push up product prices, further reducing profitability.
China is one of the largest furniture exporters to the EU and the U.S., accounting for nearly 54% of total furniture exports. However, with the new rules in place, many Chinese companies may find it increasingly difficult to maintain their presence in the European market. Some might even consider shifting focus or exiting the region altogether due to the financial strain.
Chongqing's furniture industry, though traditionally focused on the domestic market, has been making strides in international expansion. In recent years, several local firms have started targeting overseas markets, particularly in Europe, the U.S., and Southeast Asia. According to data from Chongqing Customs, there are currently around 10 furniture export companies operating in the region, and their growth rate has been impressive. In 2012 alone, Chongqing’s furniture exports surged to $2.18 billion, marking a sevenfold increase compared to the previous year.
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