Green production, the 'only way' to green exports

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“In 2024, if our entire project comes into operation, it will help reduce more than 20,000 tons of carbon emissions into the environment,” Mr. Than Duc Viet - General Director of May 10 Corporation - shared about the green production plan, adapting to the current green export market.

According to Mr. Than Duc Viet, the "greening" of production has been implemented by May 10 for about 3 years now, because the business determined that this is not a matter of wanting it or not, but a mandatory requirement.

Green production, the 'only way' to green exports

May 10 representative said that in the past 3 years, the company has implemented specific actions. Firstly , investing in modern machinery and equipment that use less electricity. Secondly , investing heavily in solar energy systems and rooftop solar panels. Thirdly, linking production chains in Vietnam and abroad to use the most recycled and natural products to ensure the proportion of fiber materials in the composition of the product according to customer requirements. In addition, even in the production process, coal-fired input fuels are being converted to biomass-fired fuels to ensure that carbon emissions are minimized.

According to data from the General Statistics Office, in the first two months of 2024, the textile and garment group achieved 5.2 billion USD in exports, an increase of 15% over the same period last year, ranking 4th in the group of products with the highest turnover in the country. Experts said that this result was achieved thanks to the situation of the world textile and garment consumer market gradually warming up since the end of 2023. The domestic textile and garment business community is struggling to find orders. At the same time, textile and garment enterprises have also gradually adapted to the requirements of the import market, which is green production.

In the structure of export goods in the first two months of 2024, the agricultural, forestry and fishery products group is estimated to reach 5.5 billion USD, accounting for 9.3%; export growth of 38.8%. Of which, in the first two months of the year alone, Vietnam's coffee exports earned 1.38 billion USD. Export turnover set a record when it surpassed the 1 billion USD mark. Currently, Europe is the market that imports the most Vietnamese coffee, with 29% of total export turnover. Next are the United States, China, Russia, and Indonesia.

Mr. Do Ha Nam - Chairman of the Board of Directors of Intimex Group - said that at this time last year, the price of coffee was only about 40,000 VND/kg, now it has increased to over 80,000 VND/kg, more than double compared to the same period, this is considered a dream price for coffee growers.

The reason for the high coffee prices, explained by Mr. Do Ha Nam, is that currently, the supply is lacking and we are almost "all alone in the market". In addition to the above reasons, the EU's regulation that coffee entering the market must comply with the EUDR is also a factor affecting the current coffee prices. Because many countries have not yet prepared the procedures to meet the requirements of the EU's Deforestation Regulation, while Vietnamese coffee basically meets this requirement, leading to customers giving priority to buying Vietnamese products.

The export turnover of goods in February 2024 is estimated at 24.82 billion USD, down 28.1% compared to the previous month. In general, the export turnover of goods in the first 2 months of 2024 is estimated at 59.3 billion USD, up 19.2% over the same period last year. In the first 2 months of 2024, most items recorded growth; up to 39/45 items grew compared to the same period last year.

Economist Dinh Trong Thinh commented that there are many factors supporting the export of goods in the first two months of 2024. Among them, the process of greening production and reducing carbon emissions has received more attention from many businesses. Although the changes are not too much, it is clear that businesses have made changes. This has created favorable conditions for Vietnamese goods to access demanding markets.

Long road, need to be steadfast in goal

Statistics show that 250 major brands in the world in the textile industry have announced a roadmap to use products of recycled, natural and circular origin in their development process from now until 2050. In particular, from now until 2030, when the change process begins, the pressure will be very great.

Buyers, especially large brands and international chains, are restructuring their global supply chains to meet stringent sustainability targets. These demands emphasize issues such as environmental efficiency, the use of recycled materials, the sourcing of organic or sustainable materials, reducing energy consumption, and conserving non-renewable resources such as fossil fuels and water. This consumer pressure will be the driving force behind brands’ commitment and action to improve sustainability throughout their supply chains.

In addition to the story of customers and markets, countries themselves have also institutionalized legal requirements. In Europe, there is the Green Deal (EGD) that sets goals for 2030 - 2050, including a separate agreement on sustainable textile development with many requirements on recycled materials and product longevity.

According to the Vietnam Trade Office in Belgium and the EU, the Carbon Border Adjustment Mechanism (CBAM) will implement declarations according to the EU model from June 2024. Enterprises exporting steel, cement, and fertilizer need to study the regulations of the EU market to calculate the amount of carbon emitted during the production process.

Similarly, the Due Diligent provision in the EU Deforestation Prevention Regulation (EUDR) will also come into effect in 2024, requiring coffee, wood products, and rubber exporters to undergo deforestation-free certification procedures with very detailed EU guidelines.

It is expected that in 2024, the EU will also introduce Ecodesign regulations in the textile industry to limit textile waste and food waste in Fark to fork. These regulations require manufacturers and exporters to prepare and convert production accordingly.

'Greening' production is not a matter of wanting or not, but it is a mandatory requirement, a "only way" if you do not want to be left behind in the global game. However, to meet the requirements of 'green production', Mr. Le Tien Truong - Chairman of the Board of Directors of Vietnam Textile and Garment Group (Vinatex) - commented that businesses are still facing problems with technology, costs, etc. and are forced to accept financial sacrifices, overcome these challenges to meet the requirements and not be eliminated from the supply chain.

Products that meet green standards and carbon certifications are priced much higher than regular products. Businesses that meet the standards, on the one hand, do not have to pay carbon tax, and on the other hand, their products have a competitive advantage over similar products from other countries that do not meet green standards.

However, meeting green standards requires huge conversion costs and a longer conversion time. While most Vietnamese export enterprises are small and medium-sized, converting internal control systems and greenhouse gas inventories will be faster and less costly.

Therefore, in addition to the efforts of enterprises, the Government and ministries need to accompany each other in creating a policy corridor to encourage investors to move towards 'green production'. These are mainly credit policies with more preferential interest rates and limits for enterprises investing and producing green products. This is also a specific step for Vietnam to achieve its commitment to "zero carbon" by 2050.

“The change is not only in quantity but also in quality of exported goods. Accordingly, with greener and cleaner products, Vietnamese goods will penetrate markets better. This has long-term significance for the economy, businesses and export activities of Vietnam,” said economist Dinh Trong Thinh.

Source: https://congthuong.vn/san-xuat-xanh-con-duong-doc-dao-de-xuat-khau-xanh-307294.html