Speakers share insights at the conference on the "EU Green Deal - Impacts on Vietnam's Export"

VCCI Vice President Nguyen Quang Vinh asserted that the paradigm shift toward "green transformation" is a vital global phenomenon. The European Union (EU) stands out as one of the most proactive regions globally in spearheading this movement, particularly through the formal adoption and execution of the European Green Deal since the commencement of 2020.

The European Green Deal encompasses a comprehensive suite of EU framework policy initiatives meticulously designed to render the EU a greenhouse gas emission-neutral region by 2050, while concurrently curbing the utilization of natural resources in economic development. The phased implementation of the European Green Deal objectives by the EU will exert a direct influence on business operations intersecting with the EU market, encompassing the production and export of goods from Vietnam to this jurisdiction.

Given the EU's standing as a pivotal export destination for Vietnamese goods, Vinh underscored the imperative for Vietnamese manufacturers and exporters to diligently monitor and adapt to the evolving policies within the European Green Deal framework. This strategic measure is not only critical for sustaining and enhancing market presence in the EU but also paramount for navigating other markets concurrently undergoing environmentally conscious transformations.

However, Vinh noted a significant knowledge gap among businesses, revealing that, based on VCCI's survey conducted in August 2023, a substantial 88-93% of businesses and affiliated entities exhibit limited or no awareness of the European Green Deal. This extends to specific policies and regulations that the EU has instituted to date. Simultaneously, numerous EU green policies possessing direct implications for Vietnam's exports to the EU market have either been introduced, are in the process of formulation, or are slated for imminent approval.

Nguyen Thi Thu Trang, Director of the WTO and Integration Center (VCCI), said that the EU has issued nearly 60 actions to enforce the European Green Deal. As a result, Vietnamese exporters will be impacted in three main ways. Firstly, green standards for products exported from Vietnam to the EU will be increased. Secondly, green financial responsibility will be increased for some manufacturers with products that are likely to cause environmental pollution during production when imported into the EU. Thirdly, accountability for product origin and requirements on the environmental impact of product making, use and disposal will be increased.

Due to the diversity of EU regulations and policies, businesses must now learn and understand the ones that affect their industries and products. This is especially important because there is no common roadmap.

For small and micro businesses with limited capital, technology, and management capacity, responding to European Green Deal challenges is a difficult task.

However, with appropriate preparation and conversion, meeting the European Green Deal requirements may still be feasible for a majority of Vietnamese businesses that export to the EU. These policies have a step-by-step implementation roadmap, with difficult requirements that must only be fully met after a long period of time. Not all green standards require high compliance costs but may require changes in the way of action, such as requirements on emission declaration and product information.

From a market perspective, early adaptation to EU green requirements provides certain guarantees for companies’ export capabilities to other developed markets that are also promoting actions to implement climate goals similar to the EU, such as the US, the UK, Japan and Australia.

From a performance perspective, green transformation can be a factor that helps reduce costs and improve business performance for companies in the long term, despite requiring high initial investment. Furthermore, on a macro level, companies’ participation in green transformation will importantly help foster the green transformation process in the domestic economy, thus enabling meaningful contributions to the sustainable development of Vietnam.

Authorities can advise and support companies in implementing EU green standards. VCCI hopes that authorities will work, discuss and consult with competent EU agencies to find convenient and effective solutions for Vietnamese businesses in adapting to new EU requirements.