Mr. Nguyen Quoc Khanh Chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA)

Wood and wooden products from Vietnam have been exported to 150 countries and territories, but trade has to meet demand while also protecting the environment, so wooden products must meet safety standards on the environment and people’s living conditions.

Many major importing countries have introduced green standards that must be met in order to sign trade and import contracts for Vietnamese wood and wooden products. For example, Japan requires that all wooden products be certified as sustainable. Germany, meanwhile, asks Vietnam to provide documents proving product origin, labor conditions and wages, and waste treatment. Strict import markets such as the US, the EU, South Korea, and Japan will gradually take action to assess the carbon content in imported wooden products.

Therefore, wood processing and export businesses in Vietnam must strictly adhere to and fully comply with stringent standards such as European regulations on combating deforestation and providing justification for the forestry industry to effectively implement the Voluntary Partnership Agreement (VPA) on Forest Law Enforcement, Governance and Trade (FLEGT) between Vietnam and Europe, to create a legal framework for timber and timber products from Vietnam exported to the continent.

Regarding emissions reductions and the carbon credit market, the wood processing industry is a negative emissions sector. If businesses can develop a greenhouse gas inventory system, helping trace their carbon footprint, they can have an excess supply of carbon credits available for trade, thus helping generate more earnings.

Many wood processing companies have adopted green production as a new strategy and competitive advantage. Some have continuously innovated and accelerated their green transformation, focusing on sustainable development and environmental friendliness. However, there are still some businesses that do not recognize the importance of green criteria in wood processing and exports, resulting in a slow transformation.

Vietnam has enacted the Law on Forestry, the Vietnam Timber Legality Assurance System (VNTLAS), Decree No. 102/2020/ND-CP on its timber legality assurance system, and Decree No. 156/2018/ND-CP detailing the implementation of certain articles of the Law on Forestry. The government is also building regulations to create a legal corridor for the carbon credit market.

The recent Decree No. 06/2022/NDCP regulates the specific roadmap for developing and implementing a domestic carbon market. Regulations for managing carbon credits will be issued by the end of 2027, along with exchange activities for greenhouse gas emission quotas and carbon credits and regulations on operating a carbon credit transaction floor. From 2028, carbon credit transaction floors will be officially put into operation.

With support from the carbon market, the State, banking institutions, and insurance companies should build mechanisms to promote large timber forests to create high value while generating more earnings from carbon credits, which will benefit wood businesses.

In order to create the conditions for the wood industry to stay abreast of global trends and soon participate in a carbon credit market, we propose that the Ministry of Agriculture and Rural Development (MARD) shortly issue guidelines for businesses and use a diverse range of plantation forest certificates recognized by law, including both domestic and international certificates. At the same time, wood processing and export businesses have proposed that import markets recognize forest sustainability certificates under Vietnamese standards.

We also recommend that MARD coordinate with relevant ministries and sectors to propose or issue specific legal regulations on implementing the country’s commitment to net-zero emissions by 2050 and help experts consult with businesses on implementing green production activities to reduce carbon emissions. ■