Greening Vietnam’s Textile Industry For Sustainable Growth

In today’s global economy, the greening textile industry is a critical imperative for Vietnam, a nation that holds the world’s second-largest textile export market share, just behind China. The advent of new-generation Free Trade Agreements (FTAs) like the CPTPP, EVFTA, and UKVFTA has significantly broadened opportunities for Vietnam’s textile sector, fostering deeper global integration. However, these agreements also introduce stringent environmental protection and low-emission pledges. To maintain its crucial position in the global supply chain, enhance competitiveness, and meet evolving consumer demands for sustainable products, the textile sector faces the complex challenge of transitioning to green manufacturing and exceeding strict environmental criteria. This shift is vital for both economic prosperity and environmental stewardship.

Mandatory Requirements in Global Trends

The textile industry is a vital component of many economies, contributing approximately 8-8.8% to total global commerce. In Vietnam, it stands as a major export sector, accounting for 12-16% of the country’s total export turnover and significantly driving economic development.

The textile industry has demonstrated impressive revenue growth in recent years. In 2021, the sector’s total export turnover reached 40.3 billion USD, marking a 15.2% increase from 2020. This upward trend continued into the first six months of the following year, with textile export turnover exceeding 22.3 billion USD, a 17.7% rise compared to the same period in 2021. Projections indicate the sector aims to achieve 43.5 billion USD by the end of 2022. This sustained growth is significantly bolstered by Free Trade Agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the European Union–Vietnam Free Trade Agreement (EVFTA), and the UK–Vietnam Free Trade Agreement (UKVFTA), which continue to present substantial growth opportunities for Vietnam’s textile industry.

Vietnam’s textile industry shows impressive growth and is a key export sector (Source: Internet)

However, these new-generation FTAs also introduce specific challenges for corporations. They often include explicit environmental protection and low-emission pledges, alongside rigorous norms and limits on sustainable development, green growth, and corporate environmental and community responsibility. To fully leverage the benefits of these FTAs, enhance competitiveness within the global integration framework, sustain growth momentum, and drive further breakthroughs, companies must go beyond merely improving product quality and reducing manufacturing costs. They must fundamentally “green” their entire production process, embracing sustainable textile production methods.

The global shift towards green consumption, sustainable consumption, and green fashion is gaining significant momentum, particularly in the aftermath of the Covid-19 pandemic. Statistics from The Global Sustainability Study 2021 by Simon-Kucher & Partners reveal that up to 85% of consumers have altered their purchasing behavior to be more environmentally friendly over the last five years. Furthermore, 60% consider sustainability an essential purchasing criterion, and 34% are willing to pay more for sustainable products or services. Reflecting this trend, many international fashion brands have publicly committed to reducing emissions and greening their entire supply chains. Consequently, adopting green manufacturing practices is an undeniable challenge that textile businesses strive to adapt to new standards. This adaptation is crucial to preserving their position in the global supply chain, boosting competitiveness, and reaching consumers as they pursue sustainable growth and development.

Challenges in the “Greening” Roadmap

“Greening” production, which includes implementing clean energy solutions and energy-saving measures, offers dual benefits. It helps businesses reduce production costs and meet environmental criteria, while also contributing to Vietnam’s broader goal of reducing greenhouse gas emissions. This aligns with the Prime Minister’s commitment at COP26 to achieve net zero emissions by 2050 and supports the United Nations’ Sustainable Development Goals (SDGs), particularly Goal 7 – Affordable and clean energy, Goal 8 – Decent work and economic growth, Goal 13 – Climate action, and Goal 17 – Partnerships for the Goals. These initiatives collectively outline how to make textile production sustainable.

The Vietnam Textile and Apparel Association (VITAS) has established ambitious targets for its Sustainability Committee member firms: a 15% reduction in energy consumption and a 20% reduction in water consumption by 2023. Looking further ahead, VITAS aims for the complete “greening” of Vietnam’s textile sector by 2030, a clear roadmap for sustainable textile production.

Within the global textile and garment supply chain, numerous enterprises are now receiving mandates to “green” their operations. This includes significant investments in rooftop solar power systems, water reuse systems, the adoption of boilers using biomass materials to reduce emissions, and the implementation of environmental impact measurement software to guide the development of eco-friendly materials and technologies. Despite these efforts, financial constraints remain a significant challenge for many businesses on the “greening” path, especially for small and medium-sized enterprises (SMEs) facing the challenges greening textile industry Vietnam.

Following global trends, many textile enterprises are implementing clean energy solutions for green production

The good news is the increasing availability of financial support policies and Green Credit programs from banks, financial institutions, and private funds specifically designed for businesses investing in waste treatment systems, wastewater reuse, solar power installation, and other renewable energy solutions. Flexible cooperation models, such as a Power Purchase Agreement (PPA), offer compelling benefits of PPA for textile industry. Through a PPA, textile businesses can utilize their idle factory roofs to generate clean energy without requiring an initial investment or deploying their own capital. With a long-term cooperation contract, businesses secure access to clean energy at a predictable and reasonable cost over an extended period, mitigating the risk of future high energy expenses. Furthermore, businesses are relieved of the burden of system maintenance and operation, allowing them to focus on core activities and explore new business opportunities that arise from responsible branding and meeting stringent emission reduction criteria, vital for green production and sustainable development within the clean energy textile sector.

By embracing these collaborative opportunities, textile enterprises will find the “greening” roadmap more accessible, leading to sustainable growth and development. This will enable them to continue achieving new milestones within Vietnam’s textile and garment industry, thereby contributing significantly to overall economic advancement.

Read more:

• Impressive textile factories rooftop solar power system
• Clean energy solution for the textile industry
• Clean energy solution, greening production

Vu Phong Energy Group

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