EU Green Regulations Pose New Challenges for Vietnam’s Textile and Garment Businesses

The European textile and garment market is shifting from voluntary requirements for sustainable production toward a system of more stringent mandatory regulations. Through the Ecodesign for Sustainable Products Regulation, the European Union is establishing a foundation for controlling multiple product groups based on durability, reparability, resource use, recycled material content and supply-chain information.

For Vietnamese textile and garment businesses, this change is not only about reducing emissions or using environmentally friendly materials. The bigger challenge is the ability to prove the origin of materials, record production data and provide consistent information to importers, brands and regulators in Europe.

The new regulation does not mean that every apparel product exported to the EU must immediately meet an identical set of criteria. Specific requirements will be established for each product group through subsequent implementing legislation. However, the policy direction is already clear: environmental data and product life-cycle data will increasingly become part of market-access conditions.

From voluntary commitments to verifiable requirements

For many years, European fashion brands have set their own requirements concerning chemicals, emissions, labor conditions, material sources and water management. These requirements are often expressed in supplier codes of conduct, purchasing standards or assessment programs established by individual brands.

The difference with the new legal framework is that sustainability criteria are being incorporated into the EU’s product-management structure. The Ecodesign for Sustainable Products Regulation, enacted by the EU in 2024, provides a basis for authorities to develop design and information requirements for many types of products. Textiles are among the sectors being considered as a priority because they consume significant resources and generate substantial waste throughout the product life cycle.

According to the European Commission, the regulation aims to improve product durability, reusability, upgradability, reparability and recyclability, while reducing dependence on virgin resources and limiting environmental impacts during production. This approach places responsibility for design before the product is placed on the market.

This is an important change for the apparel industry. A product may be manufactured using a modern production line but still face difficulties in meeting the new requirements if complete information is unavailable about fiber composition, material origin, dyeing processes, finishing, durability or the ability to separate materials during recycling.

Digital Product Passports will increase demand for data

One of the notable tools under the new regulation is the Digital Product Passport. This is an electronic information system linked to a product that provides data related to its characteristics, origin, resource use and other information required for each product group.

For textiles and garments, the product passport could change how businesses store and share data. Instead of providing only documentation for each order, manufacturers may have to prepare structured information about fibers, fabrics, accessories, processing procedures and product-related indicators. The specific scope of the data will still depend on sector-specific regulations and implementing standards, but the general trend is for information to be traceable, verifiable and updateable.

This creates particular pressure for contract manufacturers with multilayered supplier networks. A shirt may use fabric woven and dyed by another company, sewing thread from a third supplier, imported accessories, and cutting, sewing and finishing operations carried out in Vietnam. If data is not collected consistently from the outset, the final garment manufacturer will find it difficult to provide customers with complete information.

Traceability goes beyond certification

Third-party certification still plays a role in verifying certain characteristics of materials or processes. However, certification cannot replace an entire internal data system. Businesses need to know at which stage data is generated, who is responsible for verifying it, when it is updated and how it is linked to a product or order code.

In practice, many businesses already have software for order management, inventory management or production tracking. The problem is that these systems are often not designed to link environmental data to individual batches of materials. Information on electricity, water or chemical consumption, or the proportion of waste, may exist at the factory level, while customers request information by product, style code or order.

The gap between operational data and product data will be one of the biggest challenges. Businesses do not necessarily need to invest immediately in a complex system, but they need to identify a minimum data set, control procedures and the responsibilities of each department.

Vietnam’s textile and garment industry will be affected through the supply chain

The EU is an important export market for Vietnam’s textile and garment industry, but the impact of green regulations will not be the same for every business. Suppliers working directly with international brands may receive requirements earlier through contracts and purchasing criteria. Companies producing intermediate goods or supplying materials will also be affected when downstream customers need data to complete product documentation.

For contract garment manufacturers, the ability to make independent decisions about materials is often limited. Brands or buyers may specify the type of fabric, yarn supplier, chemical standards or proportion of recycled materials. As a result, compliance costs will not be limited to garment factories but will be distributed across the yarn, weaving, dyeing, finishing and logistics stages of the supply chain.

Businesses with integrated supply chains may have certain advantages in controlling data. However, integration does not automatically mean transparency. Each stage still needs its own measurement systems, records and inspection procedures. Conversely, small and medium-sized businesses may face greater pressure if they have to collect data from many external suppliers.

The impact is also evident at the design stage. If designers use too many types of blended fibers, difficult-to-separate accessories or product structures that are hard to repair, the product may be disadvantaged when circularity criteria are made more specific. Therefore, green requirements are no longer the sole responsibility of environmental or quality-control departments; they also affect design, purchasing and product-development decisions.

What businesses can prepare

Before sector-specific requirements are fully applied, businesses can begin by mapping their data. This map should show where each piece of information is generated, which stage it belongs to and which requirement it can be used to demonstrate. Commonly relevant data groups include material composition, supply sources, quantities, energy consumption, water use, chemicals, waste, waste ratios and transportation information.

Mapping should begin with several key product groups rather than being implemented across the board. Businesses can select styles exported to the EU, identify data gaps and test verification procedures. The approach can then be expanded to other products.

Standardizing materials and suppliers

Material suppliers need to be assessed not only on price, quality and delivery time. Their ability to provide origin documentation, composition information and environmental data will become increasingly important. Businesses should include data requirements in contracts and supplier-assessment procedures instead of requesting additional information only when European customers ask questions.

For recycled materials, documentation should clearly state the type of material, the source of the inputs and the method used to verify the recycled proportion if required by the customer. The use of terms such as “green,” “sustainable” or “recycled” in sales materials should also be based on specific evidence. Unsupported environmental communications can create reputational and compliance risks.

Linking environmental data with production data

Many factories already track electricity, water and chemicals to manage costs or meet customer assessments. The next step is to link this data to products and shipments at an appropriate level. Not every indicator can be allocated absolutely to each product, but the allocation method must be defined in advance, applied consistently and supported by explanatory records.

Investment in technology is necessary, but software solves only part of the problem. If input data is incomplete or no one is responsible for verifying it, digitalization will merely transmit inaccurate information more quickly. Businesses need to combine employee training, control procedures and periodic assessment mechanisms.

Opportunities for green production and circular materials

The new regulation will create additional compliance costs in the short term, but it will also open opportunities for businesses that have invested in durable products, recycled materials and resource-efficient processes. When buyers need to prove product characteristics, suppliers with reliable data will be in a stronger position during negotiations.

For Vietnam, opportunities do not lie only in garment manufacturing. Yarn, weaving, dyeing, finishing and recycling businesses can participate more deeply in the supply chain if they can provide compliant materials together with transparent documentation. Capabilities in mechanical or chemical recycling, waste sorting and designing products that are easy to disassemble could also become part of a competitive advantage.

However, products containing recycled materials should not automatically be considered sustainable. Environmental performance also depends on the source of the materials, the energy used, product durability, recovery potential and end-of-life treatment processes. Assessments need to be based on clear data and boundaries, avoiding the transformation of a single characteristic into an overarching claim.

Businesses need to monitor the implementation roadmap

The EU’s framework regulation is only one part of the policy roadmap. Specific requirements for each product group will determine what types of data businesses must provide, which entities they apply to and when they take effect. Therefore, businesses should not rely only on commercial summaries or checklists with unclear sources. Monitoring EU legislation, guidance from competent authorities and official requirements from customers is essential.

Industry associations and trade-promotion agencies can help businesses stay updated on standards, training and connections with capacity-building programs. Nevertheless, ultimate responsibility for the accuracy of documentation remains with each business in the supply chain.

For Vietnam’s textile and garment industry, early preparation does not mean predicting every detail of future regulations. More important is building capabilities that can be used across multiple markets: managing material data, batch-level traceability, measuring resource use, controlling chemicals and designing products with circular characteristics. These capabilities will serve EU requirements while also improving cost and quality management.

As international competition becomes increasingly tied to environmental standards, data will become part of the product rather than merely accompanying documentation. Businesses that turn environmental information into reliable operating processes will have more opportunities to maintain relationships with European customers and participate in higher-value segments.