Legal timber supply chain: [2] Proactively embracing global rules

Over the past decade, Vietnam's wood industry has made a strong breakthrough. The export turnover of timber and wood products has increased nearly five times, from USD 3.4 billion in 2010 to USD 16.3 billion in 2024. This achievement has positioned Vietnam as the world's fifth-largest exporter, second in Asia, and the leading country in ASEAN. The number of enterprises operating in the forestry sector has grown from around 6,400 in 2010 to more than 14,000 today, creating over 1.9 million jobs.

A green and sustainable future

Speaking with reporters from the Vietnam Agriculture and Nature Newspaper, Mr. Nguyen Chanh Phuong, Vice Chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), emphasized that legal timber in the supply chain is not just a requirement but a "lifeline ticket" for enterprises to survive and grow.

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Legal timber supply chain: [1] A 'passport' for Vietnamese wood to reach far

Since the VPA/FLEGT Agreement between Vietnam and the EU took effect, Vietnamese enterprises have proactively built more comprehensive traceability systems, applying them not only to exports to Europe but also to the domestic market and many other international markets. "In this journey, enterprises have received crucial support from the Department of Forestry and Forest Protection, industry associations, and international organizations, helping them gradually perfect accountability systems, build specialized personnel teams, and enhance competitiveness," Mr. Nguyen Chanh Phuong said.

Mr. Phuong added that the new EUDR (EU Deforestation Regulation) regulations require traceability to the exact harvesting point, meaning every tree must be linked to its owner and logging location. This problem is not only a matter of legal compliance but also a technical one, requiring digitalization and mapping of planting areas. It is a long-term effort that calls for close coordination between the Government, businesses, and international organizations.

Despite numerous barriers, Vietnam's wood industry continues to maintain an annual growth rate of 12–15%, thanks to the national forestry strategy and support from the German Agency for International Cooperation (GIZ) and many international organizations. Enterprises are steadily completing their risk classification systems, accountability records, and staff training programs.

The U.S. and the EU remain the two "pillar" export markets, though the U.S. market is volatile due to tariffs and trade remedy investigations. Meanwhile, the "China +1" trend is creating opportunities as many buyers shift their orders to Vietnam to mitigate risks from China. In addition, Vietnam boasts a young workforce of around 500,000–600,000 people, which is suitable for the wood processing industry. Stable government policies, sustainability commitments, and flexible dialogue with the State further strengthen the country's competitive advantage.

According to Vice Chairman Phuong, challenges have never made Vietnam's wood industry falter. Commitments from the Government, the business community, and international partners are helping the sector demonstrate its adaptability. From complying with transparency and improving governance capacity to expanding the domestic market, the industry is on the right path to building the image of a green, legal, sustainable, and responsible industry.

Innovation and technology application

Sharing the same view, Mr. Ngo Sy Hoai, Vice Chairman cum General Secretary of the Vietnam Timber and Forest Product Association (VIFOREST), emphasized that traceability and legal timber are two key, mutually reinforcing factors.

"Without careful traceability, legal timber cannot be guaranteed. Conversely, the requirement for legal timber acts as a driving force to enhance traceability capacity," said Mr. Ngo Sy Hoai. According to him, the process of tracing and proving legality spans multiple stages, from farmers to enterprises, while the forestry sector's technology and digital transformation capabilities remain limited.

The legal framework should be completed soon at the national level, accompanied by detailed guidance. At the enterprise level, management must innovate and strongly apply digital technologies, artificial intelligence, and blockchain to ensure reliable data traceability. In particular, associations need to take a role in leading and supporting enterprises in their integration.

"This is the time for Vietnamese wood to assert its brand, maintain and expand markets, gradually move beyond mere processing, and become more proactive and self-reliant. Thanks to support from projects and experts, we now have effective tools. It is time for enterprises and associations to take initiative and seize opportunities to take Vietnamese wood further," affirmed the Vice Chairman of VIFOREST.

Currently, wood industry associations are also proactively engaging. For instance, VIFOREST and HAWA have conducted training and consulting programs with international experts, developed legal timber supply chains linking farmers, plantations, and businesses, and required members to commit to using only legal timber.

As a melamine wood manufacturer serving both the domestic market (45%) and exports to the U.S. and the EU, Moc Phat Production and Export Co., Ltd. is gradually shifting toward the EU, which is a potential market requiring strict compliance. "Legal timber is a mandatory legal requirement, especially from January 1, 2026, when the EUDR comes into effect. We soon established a traceability system, which has been upgraded with support from the Association and GIZ, helping to shorten processes and enhance our ability to meet international requirements," said Mr. Pham Quoc Doanh, Deputy General Director of Moc Phat Production and Export Co., Ltd.

Currently, Moc Phat uses both domestic timber (60%) and imported wood (40%), mainly sourced from domestic rubber companies and Thai partners. "We prioritize cooperation with large partners who own transparency systems to ensure timber supplies meet international standards," Mr. Doanh emphasized.

Support from international partners

Over more than four years of implementation, the project "Support to the implementation of the VPA/FLEGT Agreement in Vietnam" has organized over 100 events with 2,500 delegates, 38 training courses for more than 1,300 officers (including 377 trained intensively), and 44 policy conferences with 1,000 delegates; provided direct consulting for 10 enterprises; and compiled a training manual on verifying the legality of timber sources.

Notably, the project developed the WoodID application, which integrates artificial intelligence to identify over 260 wood species using a database of 78,000 images. The tool has been downloaded more than 8,000 times and is now used by customs officers, forest rangers, businesses, and researchers, contributing to greater transparency and efficiency in timber supply chain management.

Ms. Michaela Baur, Country Director of GIZ Vietnam, emphasized that the project has marked a significant step forward by standardizing and scaling up training programs, thereby building a team of experts and trainers with practical experience in accountability and verification within the wood industry. This lays the foundation for expanding training activities in the future while encouraging stronger participation of the private sector, ultimately enhancing the credibility and responsibility of enterprises engaged in international timber trade.

"The EU regards legal timber not merely as an ecological issue but one closely tied to social and economic dimensions. Vietnam's major success is that, from the outset, implementation was not solely government-led but involved enterprises, associations, and the scientific community.

For more than a decade, Germany has accompanied Vietnam through technical and financial cooperation projects worth approximately EUR 100 million. In the new phase, Germany will continue to provide support, focusing on digital transformation, technical consulting, and expanding multilateral cooperation to help Vietnamese businesses secure stable access to the EU market," affirmed Mr. Jens-Schmid Kreye, First Secretary of the German Embassy in Vietnam.