Circular economy compliance has shifted from a sustainability initiative to a prerequisite for Vietnamese suppliers seeking access to European markets, speakers at the Germany-Vietnam Business Forum 2026 said on June 11 in Ho Chi Minh City. The event brought together German consular officials, business association leaders, and Vietnamese industry representatives around one question: how domestic manufacturers meet increasingly mandatory environmental and traceability standards in global supply chains.

Peter Kompalla, chief representative of AHK Vietnam — the German Chamber of Commerce's local arm — put the operational change in blunt terms. For German businesses operating in Vietnam, he said, the circular economy "is no longer viewed solely as a sustainability initiative but has become a key component of competitiveness and market access strategies."

"New requirements relating to supply chain transparency, traceability, and digital product passports are increasingly becoming prerequisites for accessing international markets, particularly the European Union," Kompalla said.

His framing matters for material streams and supplier contracts alike. EU rules on supply chain transparency and digital product passports translate directly into documentation, traceability systems, and reporting obligations that Vietnamese suppliers must build into their operations — capabilities many of them currently lack.

Where does the capability gap sit?

Nguyen Trong Luat, vice chairman of the Ho Chi Minh City Association of Supporting Industries, identified the gap not in machinery but in management. Vietnamese businesses face mounting pressure to upgrade technology while complying with requirements on carbon emissions, supply chain traceability, and transparency, he said.

"In this context, the biggest gap for many Vietnamese enterprises lies in management capacity, technical human resources, and their ability to connect with overseas funding," Luat said. "Technology transfer, skills development, and the establishment of stronger supplier linkage mechanisms will be critical to helping domestic companies upgrade their competitiveness and meet the increasingly stringent requirements of global markets."

The distinction matters for anyone tracking whether Vietnam's industrial base can hold its position in German and EU value chains. Procurement decisions will increasingly hinge on whether suppliers can demonstrate traceability and emissions compliance, not just price and lead time.

What is Germany offering?

Andrea Sühl, German consul general in Ho Chi Minh City, framed the partnership in terms of Vietnam's changing position in global manufacturing. "Vietnam is entering a new stage of development characterised by stronger economic growth and an increasingly important role in global manufacturing supply chains. Germany remains a long-standing partner of Vietnam, sharing a common commitment to sustainable development and long-term growth," Sühl said.

She reaffirmed Germany's commitment to supporting Vietnam's green transition through technology transfer, sharing of industrial expertise, and promotion of long-term business partnerships. Those pledges carry no stated deadlines or funding figures; they function as policy commitments to track against subsequent investment announcements.

Alexander Ziehe, chairman of the German Business Association in Vietnam, said Ho Chi Minh City is well positioned to integrate circular economy principles into its next phase of industrial development. "Building sustainable supply chains, strengthening the capabilities of domestic suppliers, and accelerating technology transfer will enable Vietnamese enterprises to participate more deeply in global value chains," Ziehe said.

He added that German companies stand ready to act not only as investors but as long-term partners in industrial development, innovation, and sustainable growth.

Can circularity become a growth driver?

Erick Contreras, managing director of BASF Vietnam, argued that circular business models offer a commercial upside for manufacturers rather than a compliance burden alone. The circular economy is emerging as a new growth driver for the manufacturing sector, he said.

"As companies face increasing pressure related to raw materials, energy consumption, emissions, and compliance with international standards, circular business models can transform these challenges into opportunities to improve resource efficiency, foster innovation, and create new sources of value," Contreras said.

For a chemicals major with substantial Vietnamese operations, that position signals supplier-side demand for circular inputs, resource-efficiency retrofits, and closed-loop material handling — categories relevant to recyclers and secondary-material traders watching Southeast Asian demand.

The forum also flagged digital transformation and automation as critical enablers of sustainable manufacturing, helping businesses raise productivity, optimise resource use, and build more resilient operations.

What happens next?

The decisive variable is regulatory. As ESG standards shift from voluntary to mandatory across international markets — with the EU's supply chain transparency and digital product passport requirements at the forefront — Vietnamese suppliers face a hardening compliance bar. The manufacturers that close their management-capability and traceability gaps will keep their EU market access. Those that do not will find circularity pledges from buyers turning into dropped contracts.