On January 15, 2020, the European Union (EU) Comprehensive and Timeline Programme for the Response to the Global Climate Emergency to 2050, also known as the European Green Deal (EGD), was adopted. This programme defines the EU's strategy to achieve zero greenhouse gas emissions (emission neutrality) and become an economic region that uses the least amount of renewable energy by 2050.
The European Green Deal (EGD) and its impact on Vietnam
Green targets and impact
The green target's content does not establish any particular norms or conditions; rather, it merely outlines the main objectives and some of the EU's guiding strategies regarding climate change and its facets. The four main objectives of the EU Green Deal are: achieving greenhouse gas neutrality by 2050; preventing pollution to protect people, animals, and plants; assisting European companies to become global leaders in technology use and clean product manufacturing; and guaranteeing an equitable and inclusive transition (leaving no one behind).
In addition to green conditions, the EU will introduce other policies, including strategies, programs, action plans, policy documents, regulations, and particular standards and requirements that will initiate actions for the topic links, after the Green Deal is launched. All sectors and economic aspects of the EU will be affected by the policies in the Green Deal to different degrees. However, due to having major impact on the environment and climate change, some economic sectors are focused on by the Green Deal to accelerate the process of neutralizing emissions, notably the sectors of agriculture, industry, services, energy, finance, transport and construction.
(Source: SustainWise)
In some cases, the EU Green Deal policies will also apply to entities outside the EU, most notably when the scope of application is goods circulating, traded, used, consumed, and/or generating emissions in the EU, regardless of whether they are produced in the EU or imported into the EU from abroad; or when the policies are designed to apply specifically to goods imported into the EU from outside to ensure balance with EU regulations applied to intra-EU goods.
Impact on Vietnam
As a key export market for Vietnam, the EU's implementation of the Green Deal will also affect a significant part of Vietnam's exports.
In just 4 years of developing the Green Deal, the EU has had many green policy actions/projects that directly affect foreign goods imported into the region such as the “Farm to Fork” (F2F) strategy, the new circular economy action plan (CEAP), the carbon adjustment mechanism (CBAM), the EU deforestation regulation (EUDR)…
On the Vietnamese side, the EU’s green policies are exporting information through many different aspects. First, strengthening “green, sustainable” standards for exported goods is one of the most popular points. Next, regulations on financial responsibility of producers for the “green, sustainable” goal are also strengthened.
Finally, requirements on information declaration procedures and settlement responsibilities when importing as well as providing information on the “green, sustainable” edges of products to consumers are being raised.
There are 7 groups of goods most strongly affected by the EU EGD, including: Electronic products, information technology, machinery, equipment and related components; agricultural products such as coffee, cashew, pepper, cocoa, meat and seafood; food, especially organic food; textiles and footwear; chemicals, biodegradable, batteries and regulations; steel and aluminum industry; packaging of products, especially food and chemical packaging.
Recently, many development policies and initiatives have been formed to achieve the set goals of sustainable development, especially on ESG and responsible business operations, including strategies and plans such as: National Green Growth Strategy and ESG Initiative chaired by the Ministry of Planning and Investment as well as the Vietnam Business Sustainability Development Forum and Index as the Business Council for the Development of Vietnam's Sustainable Organizational Structure; The National Action Plan on Responsible Business is chaired by the Ministry of Justice and developed by the Vietnam Trade and Industry Joint Venture Responsible Business Support Center.
(Source: European Commission)
Learning from the European Union's experience, Vietnam stands to benefit greatly by improving coordination between relevant state agencies and linking pertinent policies under its Green Deal initiative. A stronger relationship between ESG reporting and responsible business can help Vietnam maintain its export market share, supply chains, and investments, while also assuring market participation in its own climate goals./.
Source: TTWTO-VCCI, Environmental Economics Electronic Magazine, Industry and Trade Magazine
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