A cornerstone of the European Green Deal, the EU's Circular Economy Action Plan (CEAP) poses both challenges and opportunities for Vietnam’s textile exports, emphasised experts at a seminar organised by Vietnam's Ministry of Industry and Trade on Nov 27.
CEAP introduces stringent standards that may impact Vietnam’s ability to sustain this momentum. The plan focuses on extending product lifecycles, reducing waste, and promoting resource reuse. A critical regulation, the ‘Ecological Design and Sustainable Products’ directive, will be implemented in July 2024. It requires Vietnamese exporters to adapt their practices across design, production, and waste management to comply with the EU's sustainable production and consumption model.
The regulation impacts key industries such as textiles, plastics, footwear, and electronics. Products that fail to meet requirements, such as incorporating a ‘digital product passport,’ risk being rejected by EU customs.
Despite the challenges, CEAP also presents opportunities for Vietnamese businesses to improve their competitiveness. Dr Mai Thanh Dung, Deputy Director, Institute of Strategy and Policy for Resources and Environment, notes, compliance with CEAP standards could reduce energy and material consumption, extend product lifecycles, and enhance production efficiency.
Nguyen Xuan Duong, Chairman, Hung Yen Garment Corporation, points out, meeting CEAP requirements not only allows businesses to benefit from EVFTA tariff preferences but also attracts new customer segments prioritising sustainability.
Companies investing in green technologies, circular economy principles, and waste management can unlock long-term benefits, including material savings and production optimisation, opines Do Huu Hung, European-American Market Department.
Products compliant with CEAP standards will not only gain access to the lucrative EU market but also build credibility in other global markets where demand for sustainable goods is rising.
In the first eight months of 2024, Vietnam’s exports to the EU increased by 17.3 per cent to $34.14 billion, as per figures from the Ministry of Industry and Trade. The EU remains a key market for Vietnamese exports and a significant investor, with 2,500 projects and nearly $28 billion in registered capital.
To maximise the benefits of EVFTA, Vietnamese businesses need to focus on investments in green technology, upgrading production and innovating waste management techniques. Making these changes will help Vietnamese businesses achieve long-term success in a more sustainable global economy, say experts
