Addressing the “Adapting to Global Green Supply Chains - Challenges and Opportunities for Vietnam’s Export Goods” workshop held recently by the Vietnam Chamber of Commerce and Industry (VCCI), Ms. Tran Thi Thanh Tam, Director of the SME Support Center under VCCI, offered a panoramic view of a market undergoing profound transformation.
According to Ms. Tam, changes are coming rapidly, creating a worldwide race towards rebalancing. Within this race, multinational corporations are urgently seeking new locations to diversify supply chains, reduce costs, and improve optimization and efficiency. Thanks to its geopolitical position and production advantages, Vietnam has been emerging as a leading strategic destination in the Asia-Pacific region.
Green pressure
However, behind the impressive growth in export turnover lie core weaknesses that must be confronted. Though the manufacturing and processing industry accounts for 80 per cent of total export value, most of this value belongs to foreign-invested enterprises (FIEs).
Meanwhile, private Vietnamese businesses primarily export raw materials or perform labor-intensive, low value added tasks such as processing and assembly. This is an alarming reality that reflects the limited capacity of Vietnamese enterprises to generate added value. “We face the risk of being stuck at the bottom of the value chain if we refuse to change,” Ms. Tam warned. “The biggest barrier today is not production capacity but new standards in sustainable development.”
This pressure comes directly from major markets such as the EU and the US, where indirect emissions within the value chain account for 65-95 per cent of an organization’s total carbon emissions. This means the burden of greening will fall directly on suppliers in Vietnam.
The green transition trend is no longer an empty slogan but a matter of survival, especially with the introduction of the EU’s Carbon Border Adjustment Mechanism (CBAM) and new supply chain due-diligence requirements. Environmental and social data transparency, meanwhile, is becoming a “mandatory passport.” Ms. Tam therefore urged businesses to shift their mindset from defensive to proactive. ESG (environmental, social, and governance) practices should not be viewed merely as a compliance cost, but as a driver of value creation, growth, and competitive advantage, particularly in attracting investment capital and building customer trust.
Maze of barriers
To illustrate the concrete challenges, Associate Professor Vu Anh Dung, who boasts expertise in strategy and international business, presented a vivid picture of the wooden product export industry, one of Vietnam’s key export pillars. With export value nearing $15 billion in 2024, including 70 per cent from furniture, Vietnam ranks fifth globally and first in Southeast Asia for wooden products.
However, market distribution reveals vulnerabilities. The US is the dominant destination, accounting for 55 per cent of export value, or nearly $9 billion, while the EU accounts for only 3.6 per cent, or some $500 million. This disparity is rooted in complex trade barriers.
“With the EUVFTA [EU-Vietnam Free Trade Agreement], export tariffs to the EU are essentially zero, but the biggest challenges come from technical, or non-tariff, barriers,” the Associate Professor explained. “Regulations on forests, chemicals, and inspections are extremely strict. This requires that businesses make major investments in forest certification, traceability, and chemical testing. Meanwhile, EU orders are often small and fragmented, increasing per-shipment costs and limiting economies of scale, which is especially difficult for small and medium-sized enterprises (SMEs).”
In the US, though tariff levels are more stable under WTO commitments, risks arise from unilateral protectionist measures and anti-dumping investigations targeting products of Chinese origin that indirectly affect Vietnam. In addition, strict rules-of-origin monitoring increases compliance costs and uncertainty, forcing many firms to include “contingency costs” in their pricing.
Environmental regulations add further layers to this “maze.” The EU Deforestation Regulation (EUDR) requires geolocation of planting areas and full traceability; an enormous technical barrier that forces companies to invest in monitoring systems to prove the legality and sustainability of their wood sources. Though the US Lacey Act offers a more stable and less overlapping legal framework, compliance costs remain burdensome.
The EU’s CBAM also looms large. Though currently applied to five product groups, wooden and agricultural products are expected to be added in the future. Associate Professor Dung highlighted that indirect impacts are already visible: accessories used in furniture (iron hinges and aluminum frames, etc.) will fall under CBAM. If manufacturers import these materials from high-emission sources such as China, the final wooden product will be penalized.
Domestically, Vietnam’s carbon market pilot is scheduled for 2026-2028 with full operations by 2030, meaning businesses will be required to conduct greenhouse-gas inventories and incur higher transaction and compliance costs. Faced with these pressures, the Associate Professor recommended that businesses adopt digital technologies for traceability, manage risks through insurance, and proactively calculate carbon footprints to build both national branding and corporate reputation internationally.
Rethinking the transition
Dr. Vu Thi Phuong Lien, Lecturer at the Academy of Finance, acknowledged that the pressure to “go green” is often perceived as a tool used by developed countries to create barriers for poorer nations. After years of scrutiny and skepticism, she affirmed that the answer today is clear: the green transition is the mandatory path to elevate trust and market standing.
SMEs, though not required to conduct greenhouse-gas inventories, play a vital role in the Scope 2 and Scope 3 emissions (indirect emissions from purchased energy and supply chains) of large corporations. If they fail to meet emission reduction standards, they will be excluded from supply chains. This underscores the importance of proactively “greening” to maintain and expand markets.
Regarding green finance, Dr. Lien noted that although many preferential funds exist, access is difficult. “The State always has a lot of money, but not everyone can reach it,” she said. Transparency and sound business practices are prerequisites, and businesses should not wait for assistance and instead “stand on their own two feet.”
On support programs such as the “1,000 pioneering businesses” initiative or tax and interest incentives, she argued that the revenue criteria, of over VND200 billion, or $7.69 million a year, are unrealistic for most SMEs. She urged businesses to actively contribute feedback to draft laws and regulations to ensure policies are effective in practice.
“The global green race is no longer a choice, it is an imperative,” Dr. Lien emphasized. Despite challenges from technical barriers, carbon taxes, and the lack of resources and information, Vietnamese businesses must proactively transform their mindset, leverage available tools and resources, and continually strengthen their capacity not only to survive but to break through. This is a golden moment to turn challenges into opportunities and build a green, sustainable, and prosperous economy.
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