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Carbon labelling enhances capacity for exported goods
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| Vietnam’s legal system is currently lacking an institutional mechanism for carbon labelling, photo Le Toan |
The Department of Climate Change (DCC), under the Ministry of Agriculture and Environment, is working with international partners and consultants to implement voluntary carbon labelling for business products in Vietnam.
The initiative, sponsored by the Energy Transition Partnership, is to be carried out from now to May 2026. The target is to provide technical input and necessary support for the DCC to design and introduce a voluntary carbon labelling scheme, and prepare the private sector for carbon accounting and carbon emission reduction through a pilot programme in selected sectors.
It will assess the existing domestic policy framework and infrastructure and identify what is needed further for effective voluntary carbon labelling in Vietnam. Lessons learnt from international case studies will be used to propose enabling policies, regulations, and capacity-building measures for the Ministry of Agriculture and Environment.
According to the multidisciplinary consulting company RCEE-NIRAS, the programme will propose a design for voluntary carbon labelling, including technical components, certification and verification, institutional arrangements, implementation procedures, and capacity-building.
After that, the consultant unit will pilot the designed units in selected sectors based on a set of criteria. It will include awareness-raising, training, and communication activities to encourage the carbon labelling concept for Vietnam’s energy-intensive export sectors.
“Vietnam’s legal framework has no institutional mechanism for carbon labelling. The pilot implementation of a carbon labelling programme, based on voluntary participation, contributes to enhancing capabilities and increasing competitive advantages for businesses. In terms of technical support, the implementing agency aims to develop policies to assist the private sector in building capacity for inventory, assessment, and other sustainable development efforts,” said Hoang Anh, an expert at RCEE-NIRAS.
It is anticipated that 11 industry groups or sub-sectors will be affected by international mechanisms such as the European Union’s Carbon Border Adjustment Mechanism (CBAM), which include energy-intensive and high-emission industries, as well as sectors currently impacted by energy transition policies.
“Thus, we are considering selecting these industries for qualitative and quantitative assessment. These industries include aluminium, cement, chemicals, electrical equipment, food processing, iron and steel, plastics, and more,” said Hoang Anh.
DCC deputy director Nguyen Tuan Quang said, “Carbon labelling will help reduce carbon leakage or carbon shifting between countries, which meets the demand of developed countries applying the CBAM. It will also be a solution to enhance the businesses’ competitive capacity in the context it is a short time before the EU imposes emission taxes.”
The transitional period for the CBAM began in October 2023 and will continue until the end of 2025. During this period, importers of goods must submit reports that include the carbon price due in the country of origin for the emissions. This primarily applies to goods with a high risk of carbon leakage, such as iron and steel, cement, aluminium, fertilisers, electricity, and hydrogen.
After the transitional period, importers will be required to acquire certificates corresponding to the carbon price applicable under EU rules. After the transitional period, importers will be required to acquire certificates corresponding to the carbon price applicable under EU rules.
Voluntary carbon labelling has been implemented in many countries and has proven highly successful in guiding businesses and citizens to recognise the importance of reducing greenhouse gas emissions through smart production and consumption activities.
The PWC’s 2024 Voice of the Consumer Survey, which collected the perspectives of more than 20,000 consumers from over 30 countries and territories, indicated that consumers are willing to spend an average of 9.7 per cent more on sustainably produced or sourced goods, even as cost-of-living and inflationary concerns weigh.
The survey also suggested that more than 80 per cent of consumers said they are willing to pay more for sustainable produced or sourced goods. In terms of a price premium, some consumers are willing to pay on average 9.7 per cent more for goods that meet specific environmental criteria, including locally sourced, made from recycled or eco-friendly materials, produced in a supply chain with a lower carbon footprint, and more.
Sabine Durand-Hayes, global consumer markets leader of PwC France, said, “Consumers are increasingly feeling the squeeze of inflation and rising prices in essential goods such as groceries, however in that context, they are prioritising products that are sustainably produced and sourced. In the year ahead, companies must balance consumer affordability and environmental impact if they are to source and retain consumers.”
Around the world, many businesses have adopted carbon labelling and reaped significant benefits. In Japan, companies like Panasonic and Sony implemented this work for electronic products, boosting sales by meeting the demands of environmentally conscious consumers. Similarly, in Europe, major retailers such as Tesco and Marks & Spencer have applied carbon labelling to food products, enhancing brand image.
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SIVAKUMAR Balasankari, consulting team leader NIRAS A/S Company Carbon labelling is implemented in several markets around the world, such as the United States, EU, China, and Thailand. These labels combine CO2 measured labels, reduce packaging, and are carbon-neutral, with eco-labelling for food and drink products. In France, the government has been experimenting with several schemes and passed a law for environmental labelling, meanwhile, in the US, a group of multinational corporations established a sustainability consortium to help suppliers to measure and reduce their environmental impact. There are also private operators of carbon labelling schemes. For example, Walmart teamed up with the carbon disclosure project to require its suppliers to disclose their carbon emissions. They do not capture carbon embedded in individual products, and use self-reported surveys. Besides this, Casino-French supermarket has a life-cycle-based carbon label on 26 of its own products. It utilises a methodology developed by environmental consultancy Bio Intelligence. These examples show that carbon labelling enhances transparency in product emissions and promotes sustainable consumption. Various international standards ensure credibility and consistency in carbon footprint assessments. With different countries implementing voluntary and regulatory schemes tailored to their industries and environmental goals, stakeholder engagement, including government agencies, businesses, and consumers, is crucial for successful adoption. I think that a well-balanced eco-labelling scheme must provide value exceeding costs to ensure long-term participation. Dao Doan Duy, environmental safety and sustainability specialist PetroVietnam The group is expanding low-emission energy sources by increasing the gas-to-oil production ratio, developing gas-to-power chains (Block B of the O Mon project) and importing liquefied natural gas to ensure gas supply for power generation (Nhon Trach 3-4). In addition, the group also conducts carbon capture and storage by utilising depleted oil and gas fields, capturing CO2 from hard-to-abate sectors and developing hydrogen projects. PetroVietnam also develops guideline documents for emission reduction in the oil and gas sector, such as greenhouse gas (GHG) inventory, and monitoring, reporting, and verification for emission reduction, among others. The group also conducts research on emission reduction roadmaps, carbon market participation potential, carbon footprint calculation, CO2 absorption from afforestation, methane emission reduction, and more. We face several challenges during the process of implementing emission reduction solutions. For example, the auditing and certification of GHG inventory data are still struggling due to large enterprise scale, complex ownership structure, and diverse industries. Besides that, for complex emission sources that are difficult to measure, such as leaks and cold venting. Calculation data also still relies on estimates. Thus, we see that to ensure authenticity and accuracy, emission reduction solutions must be accompanied by methodologies and calculation approaches for absorption quantification in collaboration with monitoring measures for CO2 absorption and leakage. Furthermore, the management of emission and fuel consumption data needs to be continuously upgraded and ensured for consistency to monitor data in real-time enhance management oversight efficiency, and simultaneously improve calculation and forecasting capabilities through AI integration. |
The Ho Chi Minh City Real Estate Association (HoREA) has proposed a pilot mechanism that would allow businesses to invest in and construct worker housing within industrial parks.
In a document submitted to the Prime Minister, contributing feedback on a draft pilot policy aimed at boosting social housing development, HoREA suggested that businesses, cooperatives, and cooperative unions operating within industrial parks be permitted to build accommodation for their workers. It also called for allowing companies to rent housing outside industrial parks for the same purpose.
HoREA emphasized that all costs related to building or renting worker housing should be recognized as legitimate business expenses and be included in the enterprise’s operating costs.
The association further recommended expanding the policy framework to allow companies within industrial parks to lease social housing or worker accommodation built by third-party developers outside the park premises.
According to Mr. Lê Hoàng Châu, Chairman of HoREA, the current Housing Law (2023) only allows companies to rent worker housing inside industrial parks, without clearly defining whether they can rent social housing outside the parks or construct such housing themselves.
With worker housing demand at industrial parks far exceeding supply, HoREA pointed out that current social housing and dormitory offerings are inadequate. Meanwhile, commercial housing remains out of reach for most workers due to high prices. Therefore, the association urges the government to introduce policies enabling manufacturing businesses—despite not operating in real estate—to develop their own accommodation solutions for employees.
HoREA underscored that such policies would create a strong legal foundation, empowering enterprises and cooperatives to proactively resolve housing issues for workers. If allowed to construct their own housing, companies could ensure homes go to those in need, boosting employee retention, improving living standards, and supporting sustainable growth in industrial zones.
The association also proposed financial support mechanisms, including tax incentives, access to preferential loans, or government-matching support, to reduce the financial burden on companies participating in worker housing development.
Previously, many businesses had expressed a desire to buy land, build housing, and offer installment-based homeownership plans to workers, whereby employees would pay monthly through salary deductions. While this model helps workers secure long-term housing, legal procedures remain a major hurdle.
Providing accommodation has increasingly become part of corporate strategies to retain labor, alongside other employee welfare policies. For example, Nissei Electric Vietnam (Linh Trung 1 Export Processing Zone, Thu Duc City) has built a dormitory complex with 285 shared rooms, housing up to 2,280 workers. Eternal Prowess Vietnam (District 12) and Thien Phat Company (Linh Trung 2 EPZ) have also invested in on-site worker housing. Thien Phat’s project includes 368 units (35m² each), rented at VND 2.2 million/month, with 80% of the units for families and 20% for shared accommodations.
As of Q2 2024, Ho Chi Minh City has 18 industrial parks with around 1,700 businesses employing approximately 320,000 workers. Citywide, over 1.3 million people are employed in factories. However, there are only 16 official worker housing complexes, accommodating about 22,000 people. The majority of workers rely on rented rooms or stay with acquaintances—often sharing 12m² rooms among 2–3 people, which consumes 15–20% of their monthly income.
From 2021 to the present, Ho Chi Minh City has completed six social housing projects with 2,700 units and is building four more with 3,000 units. By April 30, the city aims to resolve legal hurdles and break ground on 5–6 additional social housing projects, totaling around 8,000 units.
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According to Statista Market Insights, the Vietnamese semiconductor market is forecast to see healthy growth with a compound annual growth rate of 9.62 per cent between 2024 and 2027, reaching a market volume of $26.20 billion.
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| Le Quan, Senior lecturer Faculty of Engineering Fulbright University Vietnam |
Vietnam also boasts over 30 foreign-led companies in integrated circuit (IC) design, including established players like Renesas, Synopsys, and Cadence alongside innovative startups like Ampere, ADTechnology, Inphi, FingerVina, Dolphin Technology. The sector also encompasses numerous smaller firms with around 100 or fewer employees.
By 2040, Vietnam is poised to become a crucial player in the global semiconductor ecosystem, encompassing all aspects of the industry, from design and manufacturing to assembly, test, and packaging (ATP) and equipment fabrication.
The strategy emphasises the importance of fostering a skilled workforce. Vietnam boasts a strong talent pool in the semiconductor industry, with 50,000 design engineers, 200,000 electronics engineers, 500,000 technical workers, and one million software engineers. To further enhance this workforce, the strategy aims to transition up to 30,000 personnel from the existing pool of 350,000 IT and telecommunications engineers.
The global semiconductor packaging landscape is undergoing a rapid transformation, driven by a surge in new facilities across Asia. The wave of semiconductor investment in Vietnam and the industry’s demand for personnel have driven educational institutions, from top universities to vocational colleges, to launch training programmes related to semiconductors.
Last year, major universities such as Hanoi University of Science and Technology, University of IT – Vietnam National University Ho Chi Minh, and the University of Engineering and Technology announced engineering programmes specialising in semiconductors. Younger universities like FPT and Phenikaa are also making significant investments in this area, not only in training initiatives but also in facilities and equipment.
However, to truly understand the current landscape of semiconductor training in Vietnam, it is essential to look at the regulations and current state of training schemes in this field from 2024 backward.
Firstly, the high costs associated with establishing chip fabrication facilities make it an impractical investment for Vietnam. The country’s resources would be better allocated towards sectors that promise more immediate returns, such as ATP and IC design. Advanced packaging technologies represent a feasible and profitable entry point in the global semiconductor value chain, aligning with Vietnam’s strengths in low-cost, adaptable labour.
Vietnam should focus on drawing overseas funding into ATP operations, leveraging its lower labour costs to attract foreign companies. The availability of a high-quality but affordable workforce makes Vietnam an attractive destination for packaging, testing, and assembly processes. Prioritising such investment with advanced packaging capabilities will allow Vietnam to build a competitive advantage in this sector.
Meanwhile, the IC design segment represents a high-value opportunity with significant global demand. To capitalise on this, Vietnam should proactively seek partnerships and outsourced projects from international IC design firms. Engaging Vietnamese firms in IC design outsourcing allows for skill transfer, builds local capacity, and positions Vietnam as a reliable partner in the global semiconductor value chain.
Collaboration between industry, educators, and government should be boosted. Building a cohesive semiconductor workforce will require closer partnerships between educational institutions, industry players, and the government.
By integrating real-world projects into academic programmes, Vietnamese graduates will better understand the industry’s practical requirements and be more prepared to transition directly into the workforce. Schemes that bring industry projects to academia will provide students with hands-on experience, making them job-ready upon graduation.
At the same time, establishing specialised training for semiconductor roles, particularly in ATP and IC design, will be essential to reduce the industry’s current reliance on costly in-house training. This should involve upskilling engineers from related fields through short, intensive courses designed to meet industry standards.
Partnerships with international organisations for curriculum development, as well as accreditation for training initiatives, will help elevate Vietnam’s semiconductor workforce to global standards.
Vietnam can also implement “train-the-trainer” programmes. Its academic institutions face a shortage of faculty members with practical experience in semiconductor technologies. By leveraging international partnerships, Vietnam can upskill its instructors, who can then transfer these skills to future generations of engineers.
Notably, several US institutions have expressed willingness to offer training to Vietnamese trainers, a vital step towards creating a sustainable, locally driven semiconductor education ecosystem.
Finally, effective workforce development in the semiconductor industry requires government involvement in fostering a supportive ecosystem. Policies that incentivise partnerships between academia and industry, such as funding for research and development and joint training programmes, are critical.
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