The EU market is increasingly setting stronger green standards for exported goods, which will have a major impact on Vietnam's export activities.

A large market for Vietnamese goods

According to the latest statistics of the Ministry of Industry and Trade, in the first 11 months of 2024, the export turnover of goods to the EU market is estimated at 47.3 billion USD, an increase of 18.1% over the same period last year (the same period in 2023 decreased by 8%).

Notably, after 4 years of implementation, the Vietnam - European Union Free Trade Agreement (EVFTA) is a major driving force for Vietnam's exports. If in 2019, Vietnam's exports to the EU reached 35 billion Euros, by 2023 this figure had reached 48 billion Euros. Many industries recorded strong growth such as electronics, textiles, footwear, agricultural and aquatic products, etc.

The EU is a large market for Vietnam's export goods and any change in the policies of this market will have a great impact on export goods. For example, according to the Department of European and American Markets - Ministry of Industry and Trade, Vietnam's exports to the EU are currently facing new challenges from the EU's "green policies" with strict regulations on imported goods and consumption towards sustainable development and circular economy. In particular, the Circular Economy Plan is part of the European Green Deal. The European Green Deal is a goal and strategy of the EU to help the bloc reduce net emissions to zero as soon as possible by 2050.

To implement this strategy and goal, the EU will issue a series of regulations, including the Circular Economy Action Plan (CEAP). This plan will directly impact 7 main export sectors of Vietnam, specifically: electronics; information technology; battery group; packaging group; plastic group; textiles and footwear.

In particular, the ISPR regulation (regulations related to eco-design, sustainable products) has been effective since July 2024. ISPR affects a number of Vietnam's key export sectors, including textiles and footwear, plastic products and packaging. ISPR has regulations related to preventing and limiting the destruction of textile products, requiring products to have a DPP digital passport.

The green trend, circular economy and sustainable development are considered unchangeable factors in EU policy, which are also things that export enterprises are forced to meet to keep up with market requirements. Talking to reporters of the Industry and Trade Newspaper, Dr. Le Quoc Phuong - Former Deputy Director of the Industry and Trade Information Center - Ministry of Industry and Trade said that the green fence built for imported goods is an unchangeable trend. The reason for this situation is that climate change has been and is becoming increasingly severe.

The EU has become the world's leading market, using the power of importers to apply green criteria and standards to imported goods. Therefore, businesses must consider it natural, necessary and must meet it because this is an unchangeable trend.

On the business side, Mr. Vuong Duc Anh - Chief of Office of the Board of Directors of Vietnam Textile and Garment Group (Vinatex) said that the EU market has legalized all regulations related to sustainable development and they tend to require regulations related to sustainable development not on a voluntary basis but as mandatory requirements.

For example, Adidas and Nike both set a goal of using 50% recycled materials by 2025 or 2030. They both have a very specific sustainable development program and Vietnamese textile and garment enterprises that make products according to their requirements must also make changes in terms of materials. For example, in Vinatex's fiber industry, 20% of fiber products are in the direction of recycled and circular fibers. Enterprises must buy organic cotton or buy natural and recyclable raw materials.

Not just a challenge

Green growth is a mandatory requirement for export enterprises in the coming period. At the same time, this is a very costly activity. However, Dr. Le Quoc Phuong believes that enterprises need to see green transformation not only as a challenge and difficulty but also as a great opportunity for enterprises to invest, transform production and business activities, invest in production processes, change equipment and input materials. The change will stimulate innovation and in the long term promote better transformation.

Specifically, with green transformation, enterprises will have to spend initial costs such as using energy-saving equipment, using recyclable materials. But in the long term, it will reduce costs for enterprises such as reducing energy costs, reducing prices. If enterprises achieve green transformation sooner, they will increase their competitiveness with competitors. Therefore, green transformation will be a great opportunity for enterprises.

Speaking to reporters of the Industry and Trade Newspaper, Ms. Nguyen Thi Hoang Thuy - Director, Head of the Vietnam Trade Office in the Swedish market, concurrently in Northern Europe, shared that European green standards pose challenges for Vietnamese enterprises, but also create new development opportunities. Therefore, enterprises need to be aware of the changes that the agreement will bring and be ready to adapt to the challenges to maintain competitiveness in the EU market.

In addition to meeting market requirements, one of the important solutions is that enterprises must increase the added value of exported products. Instead of focusing on raw processing, enterprises need to invest in deep processing technology and develop differentiated products. For example, in the wood industry, instead of exporting raw materials or unfinished products, enterprises should focus on producing high-end furniture with unique designs, or smart furniture associated with technology, meeting the tastes of EU consumers. For agricultural and aquatic products, processing them into value-added products such as canned foods, processed foods, or organic products will also help increase export value.

Source: Industry and Trade Newspaper