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NetZero.VN - Net Zero Viet Nam > Topics > Industry > VN businesses need to embrace green practices to export to EU
EventsIndustry

VN businesses need to embrace green practices to export to EU

Vietnamese exporters must foster “sustainable and responsible corporate behaviour” throughout their global value chains to boost exports to the EU, a European diplomat has said.

Vietnam News Agency 08/06/2023
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Daniël Stork, the Netherlands consul general, speaks at the Việt Nam ESG Investor Conference last week in HCM City. (Photo courtesy of the event’s organiser)

Vietnamese exporters must foster “sustainable and responsible corporate behaviour” throughout their global value chains to boost exports to the EU, experts have said.

Speaking at the Việt Nam ESG Investor Conference in HCM City last week, Daniël Stork, the Netherlands consul general, said the EU is adopting new rules and regulations to support its climate ambitions such as the Carbon Border Adjustment Mechanism (CBAM).

“The legislation will apply within the EU, but its effect will extend beyond the EU’s borders, even to Việt Nam,” he said.

“We work together with the Vietnamese government as well as international partners present here,” he added.

The mechanism is a real game changer in the way companies operate throughout their global supply chain, experts noted.

It would impose environmental, social and governance rules for imports, they said.

For Vietnamese exporters to the EU, it means there would be strong incentives to invest in ESG to enjoy low tariffs and easy access to the market, they added.

Speaking at a recent meeting in Việt Nam, Sirpa Jarvenpaa, director of the Southeast Asia Energy Transition Partnership, said the CBAM is one of the key tools for the EU to move towards the net carbon emission goal by 2050.

It sets a price on carbon emissions associated with imports of certain goods into the EU, which would directly affect Vietnamese exporters since the bloc is one of Việt Nam’s key markets, she warned.

The mechanism aims to tackle “carbon leakage”, referring to firms moving their production from the EU to places with less stringent emissions regulations to avoid carbon pricing and gain a competitive advantage, she said.

CBAM is set to take effect in October with a three-year transitional phase before becoming fully operational in 2034.

It will initially apply to imports such as steel, cement, fertilisers, aluminium, electricity, and hydrogen, sectors that account for 94 per cent of the EU’s industrial emissions and with a high risk of carbon leakage.

Việt Nam committed to achieving net zero emissions by 2050 at the United Nations Climate Change Conference in 2021.

Experts have said the path to green growth is not easy considering the low awareness of environmental protection in the business community.

(VNS)

TAGGED:ESG Investor Conference
SOURCES:Việt Nam News
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