For its benefit
Vietnam’s textile and garment industry has pledged to reduce its emissions but there is much to do.
Textiles and garments is an industry known to emit high levels of greenhouse gases during operations, making efforts to reduce emissions an urgent task that will contribute to Vietnam’s goal of achieving carbon neutrality by 2050.
Research indicates that the fashion industry is responsible for 6-10 per cent of global carbon emissions, or approximately 1.7 billion tons. This figure is projected to increase to 25 per cent by 2050 as a result of increasing demand for clothing and the development of “fast fashion”.
Major emitter
The fashion industry has also been identified as the second-largest waterconsuming industry in the world, requiring approximately 2,700 liters of water to produce a single t-shirt, which is enough to sustain one person for over 900 days. It is also ranked as the second-largest water polluter globally, due to its use of harmful chemicals and improper treatment of wastewater.
According to the Vietnam Textile and Apparel Association (Vitas), Vietnam’s textile and garment industry outlays $3 billion annually on energy and accounts for around 8 per cent of energy demand in industry as a whole. Its emissions stand at an estimated 5 million tons of carbon dioxide a year.
Experts involved in a project supporting the Planning and Implementation of the Nationally Determined Contributions in Vietnam (SPI-NDC) note that Vietnam is among the top 5 largest textile and garment exporters globally, with key markets including the US, the EU, Japan, South Korea, and China. Export revenue stood at $44.4 billion in 2022 and then $40 billion in 2023, while the target for this year is $44 billion.
The volume of greenhouse gases created by the industry is due to its use of large amounts of energy, raw materials, and chemicals. The process of treating wet products, like fiber, fabric, and garments, creates the biggest “carbon footprint”, due to water consumption in the washing, rinsing, pre-treatment, dyeing, and post-treatment stages.
In the strategy for the development of Vietnam’s textile, garment, and footwear industries to 2030 with a vision to 2035, which was issued in 2022, the government identified the textile and garment industry as a key export sector for the economy. In 2021-2030, growth in export revenue of 6.8-7.2 per cent annually is anticipated, with value targeted at $50-52 billion by 2025 and $68-70 billion by 2030. The input localization rate, meanwhile, is to reach 51-55 per cent in the 2021-2025 period and 56-60 per cent in 2026-2030.
Given such goals, the industry’s greenhouse gas emissions are guaranteed to increase rapidly, and this requires that businesses proactively invest in advanced technology and production processes that generate lower emissions. There are currently 294 textile, garment, and footwear enterprises required to conduct a greenhouse gas emissions inventory under Government Decree No. 06/2022/NDCP on mitigating greenhouse gas emissions and protecting the ozone layer.
Urgent implementation
Businesses must urgently prepare to conduct a greenhouse gas emissions inventory and cut emissions, so they can prevent any production disruptions that may affect their business results and head count. Conducting an inventory and proposing emissions reduction solutions are essential in helping textile and garment companies keep pace with market trends and undergo green transformation to meet the requirements of the brands they supply.
Decree No. 06 outlines a specific roadmap for businesses, including textile and garment companies, to provide operational data and relevant information to support a greenhouse gas emissions inventory. Starting from March 2025, businesses are required to submit such data to relevant management agencies while building and implementing reduction plans. From 2026, they are required to adopt measures to mitigate emissions as planned, in compliance with the allocated emissions quota.
Mr. Koji Fukuda, Chief Technical Advisor from the Japan International Cooperation Agency (JICA) in the SPI-NDC project, noted that many Vietnamese textile and garment companies are part of global supply chains and face pressure from investors, stakeholders, and customers in proving their products meet sustainability requirements, environmental, social, governance (ESG) criteria, and greenhouse gas emissions reduction standards.
The transition of the textile and garment industry to becoming “green” and reducing emissions would undoubtedly contribute significantly to Vietnam’s overall climate goals and its bid to reach net-zero emissions by 2050.
Investing in green growth
Mr. Vuong Duc Anh, Chief of the Office of the Board of Directors at the Vietnam National Textile and Garment Group (Vinatex), said that, over the past three years, many countries have begun to prepare roadmaps for sustainable development. This means that green transition is no longer voluntary, and has gradually become a
responsibility for producers and importers if they hope to avoid taxes and fees imposed as penalties.
For example, under the Carbon Border Adjustment Mechanism (CBAM), products from Vietnam to the EU will be at a disadvantage due to the absence of a domestic carbon market and carbon prices in Vietnam. Goods exceeding emissions limits will be charged based on carbon prices set by the bloc. With an average price of $60 per ton of carbon dioxide currently set, each shirt exported by Vietnam will be subject to a penalty of about 20 cents. Therefore, the cost of carbon emissions alone could account for up to 30-40 per cent of production costs.
“The textile and garment industry will be subject to the CBAM after the pilot phase,” said Mr. Anh. “Businesses therefore need to prepare to invest in green factories to reduce the greenhouse gas emissions from their products. Major importers are now focusing on sustainable development indicators such as ESG and LEED standards (energy and environmental design guidelines). Businesses with these advantages will be more competitive and secure more orders.”
He suggested that businesses resolutely implement a green transition roadmap to maintain and boost their exports. In particular, textile and garment products exported to the EU are to be made from cotton or polyester yarn mixed with recycled yarn from natural products, waste, or excess textiles.
Former Director of the Vietnam Textile and Garment Institute Nguyen Van Thong said a green transition in the textile and garment industry, including in materials and production processes, is inevitable if it hopes to meet the requirements of the market, consumers, and brands. However, 80 per cent of these companies in Vietnam are of small and mediumsize, so lack the resources to conduct the necessary transition. Vietnam, meanwhile, still lacks guidelines, policies, and specific polices for businesses.
There is also “concern” in many localities about the effect of textile and dyeing operations. The country is currently facing a severe shortage of large-scale treatment
“Many Vietnamese textile and garment companies are part of global supply chains and face pressure from investors, stakeholders, and customers in proving their products meet sustainability requirements, environmental, social, governance (ESG) criteria, and greenhouse gas emissions reduction standards.”
Mr. Koji Fukuda Chief Technical Advisor from the Japan International Cooperation Agency (JICA).
facilities for wastewater and the recycling of waste from the textile and garment industry. There is also a shortage of advisory centers capable of helping small businesses undergo a green transformation, and assessment tools about water and energy consumption during the production process are in short supply.
In order to tackle these shortcomings, Mr. Thong proposed that the government and relevant organizations establish mechanisms to build a “swan model”, where large businesses lead their smaller counterparts. At the same time, all companies must review their strategies, business models, and customer segments in order to develop green growth measures that align with their financial resources and green transition roadmap, to help fulfill the government’s commitments on netzero emissions by 2050.
Vitas Chairman Vu Duc Giang said that after undergoing a green transition, Vietnam’s textile and garment industry will possess more advantages in joining global supply chains. Most textile, garment, yarn, and dyeing businesses actually meet the standards contained within the Law on Environmental Protection and in assessments by international customers.
Under the country’s textile and garment development strategy, focus will be placed on developing a complete, large-scale chain with investments in modern equipment, automation, green, clean, and environmentally-friendly production, and social responsibility. The government therefore needs to plan dedicated industrial parks for the textile and garment industry that meet wastewater treatment standards. ■