Reducing the Carbon Footprint in Agriculture: Businesses Under Double Pressure

netzero.vn

Vietnam’s agriculture sector is facing an urgent need to cut greenhouse gas (GHG) emissions—not only to adapt to climate change but also to meet new standards from export markets and international investors.

Against this backdrop, many enterprises have started to gradually build emission reduction roadmaps, adopt circular economy models, and invest in renewable energy, even though the transition still faces significant technical and cost-related barriers.

Double Pressure: Domestic and International

Vietnam is among the countries most vulnerable to climate change, especially in key production regions such as the Mekong Delta. With more than 60% of the population living in rural areas and nearly 30% of workers employed in agriculture, environmental impacts like salinity intrusion, erosion, and rising temperatures not only affect yields but also threaten the livelihoods of millions.

At the same time, agriculture is also one of the largest sources of GHG emissions in Vietnam, alongside industrial production, energy, and transportation. According to the World Bank, 48% of the sector’s total emissions come from rice cultivation, with methane alone accounting for about 75%. Transitioning to low-emission production is not only an internal requirement for climate resilience but also an external market-driven pressure.

Major export markets are gradually requiring agricultural businesses to demonstrate emission control. The European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM), along with emission-reduction commitments from retailers and importers, is reshaping input standards for agricultural goods. Many multinational corporations are also reviewing their supply chains to select partners that comply with ESG standards. In the EU market, many buyers now demand specific controls on seafood harvesting and disclosure of product carbon footprints. For example, Tesco (UK) has committed to publicly reporting the carbon footprint of its seafood products, including imports. This creates new requirements for Vietnamese companies seeking access to such markets.

A representative from PAN Group—an agribusiness and food company—stated: “We realize that if Vietnamese businesses cannot meet emission requirements, they will gradually be excluded from global supply chains. This is no longer a trend but a reality already taking place in many markets.”

At COP26 in 2021, Vietnam committed to reaching net-zero emissions by 2050, with the agriculture sector tasked to cut at least 43% of its GHG emissions. A PAN representative noted: “The biggest challenge now is balancing economic growth with ESG targets, while emission measurement capacity, data systems, and investment resources remain limited—especially at the factory level and in raw material areas.”

A Complex Process

In reality, some large enterprises in the sector have begun building sustainable development roadmaps, with carbon reduction as a central focus. However, the process is far from simple.

At PAN Group, sustainable development is managed under a three-tier system: a Sustainability Committee under the Board of Directors, a corporate-level Steering Committee, and dedicated operational units. According to the company, to achieve net-zero commitments, each member enterprise is assigned specific goals depending on its scale and business area. For instance, Khang An Foods, a seafood subsidiary, aims to cut CO₂ emissions by 50% by 2030. Bibica, PAN’s consumer food processing subsidiary, targets a 32% CO₂ reduction from 2023 levels through fuel switching, solar investment, and production process improvements. PAN’s 2024 report shows the group reduced coal use by 97%, increased biomass consumption nearly fourfold from the previous year, and solar power accounted for 25% of total consumption at food factories. Through technical and operational upgrades, the company also saved about 269 MWh of electricity.

In crop production, some enterprises are promoting low-emission rice farming models. Vietnam Seed Corporation (Vinaseed), through its subsidiary Vinarice, has participated in a rice value chain transformation project in the Mekong Delta, covering nearly 1,000 hectares in the first season. According to verification by Regrow Ag, the model reduced more than 4 tons of CO₂ per hectare while improving household incomes. The company also earned carbon credit rewards, sharing more than VND 456 million with cooperatives and farmers. By 2025, Vinarice had scaled up to 21,000 hectares in the Winter-Spring crop and 50,000 hectares in the Summer-Autumn crop.

However, shifting to low-carbon production models requires significant upfront investment in technology, measurement systems, and changes in farming practices. Success is impossible without green finance mechanisms or clear legal frameworks that allow businesses to leverage carbon credits as a resource. According to PAN’s representative, sustainable development is a long-term journey that cannot be measured by short-term gains. Initial investments may not bring immediate benefits but are essential to create lasting value.

“For businesses to endure, sustainability is no longer a choice—it is a necessity for all of us. Sustainable development is not a luxury for the wealthy or large corporations, but a crucial strategy for resilience and effective risk management,” shared Ms. Nguyen Thi Tra My, CEO of PAN Group.