Extended Producer Responsibility (EPR) is a key tool for driving the transition from a traditional waste management model to a circular economy, the “Pathways for a Robust Extended Producer Responsibility (EPR) System in Vietnam” workshop, held online and offline in Hanoi on August 11 by the United Nations Development Programme (UNDP) through the National Plastic Action Partnership (NPAP) and the Circular Economy Hub (CE Hub), heard.
Vietnam has made significant strides forward in establishing and implementing EPR. The country is currently amending the Law on Environmental Protection 2020 and its implementing regulations, with the continued refinement of the EPR policy serving as a key component. However, practical experience indicates that the mechanism requires further refinement to ensure greater operational efficiency and transparency, while creating stronger incentives for the collection and recycling market.
Not just a financial obligation
A key change proposed in the draft amendment to the 2020 Law on Environmental Protection is the introduction of a roadmap to phase out the financial contribution method for meeting recycling obligations. Instead, producers and importers will be required to directly organize the collection and recycling of post-use products and packaging or carry out these activities through recycling entities or Producer Responsibility Organizations (PROs). This is considered a shift aimed at restoring EPR to its true essence: the manufacturer’s responsibility does not end when the product is sold on the market but extends to the point when the product becomes waste.
The need for this shift becomes even more evident when considering Vietnam’s goal of reducing waste landfill. According to the Department of Environment under the Ministry of Agriculture and Environment (MAE), Vietnam aims to lower the waste landfill rate to below 30 per cent by 2030 against the current 60 per cent. “This significant gap between the status quo and the target necessitates a substantial overhaul of the waste management system, requiring collection, sorting, and recycling processes to evolve into links capable of operating under market-based mechanisms,” said Mr. Tang The Cuong, Director of the Department of Environment. “EPR should not be viewed merely as a financial obligation for businesses. Rather, it must serve as a mechanism to incentivize them to transform product design, material selection, and collection processes, as well as to invest in circular economy solutions.”
Ms. Francesca Nardini, Deputy Resident Representative of the UNDP in Vietnam, added that establishing the EPR framework is merely the first step; the greater challenge lies in implementation. “EPR is not just about regulatory compliance and meeting recycling targets,” she said. “It is about transforming how resources circulate within the economy, creating value from materials that would otherwise become waste, encouraging investment and innovation, and building a more resource-efficient economy.”
However, the reality in Vietnam reveals a significant gap between policy design and implementation capacity. A quick survey of approximately 150 in-person and online workshop participants indicated that more than 54 per cent of businesses currently choose to fulfill their obligations by making financial contributions to the Environmental Protection Fund, while the rate of self-organized recycling remains low. Notably, 42 per cent of businesses consider fulfilling their obligations through non-fee-based methods to be “highly unfeasible without support.”
International experience shows that early adopters such as Germany and Norway have implemented EPR for more than 30 years. A common feature is that the State does not directly operate the system but instead serves as the policymaker, regulator, and overseer.
Dr. Fritz Flanderka, CEO of the Reclay Group, said EPR is becoming increasingly widespread globally but there is no universal model, as each system is designed to suit local conditions. “While the core principle remains shifting responsibility for waste to businesses, implementation processes vary significantly,” he said. “Although each system has its own advantages and disadvantages, some models have proven effective, whereas others tend to fail due to weak enforcement or flawed financial structures.”
According to the Reclay Group’s observations, many countries aim to implement ambitious EPR systems from the outset. Consequently, complex regulations often hinder the establishment of the system’s fundamental functions in the early stages. It is best to start with a simple system by establishing waste management processes before moving on to more complex aspects. A proven approach is to set compliance thresholds, whereby companies are required to fulfill their obligations only if they exceed those limits. This method is based on the principle that approximately 20 per cent of obligated businesses account for 80 per cent of the total volume placed on the market.
Recommendations made
Offering recommendations for Vietnam, Dr. Flanderka said that a successful EPR system requires close coordination among stakeholders.
First, manufacturers are required to fulfill their EPR obligations either individually or through a collective arrangement, such as by paying participation fees to a PRO, and to cover the full costs of waste management systems for their products within the relevant product categories. Most manufacturers fulfill these obligations through a PRO. Under the regulations, a manufacturer is defined as the entity that first places the product on the domestic market, including importers.
Establishing the EPR framework is merely the first step; the greater challenge lies in implementation.
Second, PROs sit at the heart of the EPR system, bearing full financial responsibility for all waste management processes, including collection, sorting, and recycling. The PRO is required to assume operational responsibility for waste sorting and recycling. However, operational responsibility for waste collection may rest with either the PRO or local authorities or municipalities. International experience shows that EPR systems that begin with competition among PROs tend to fail. The system must first become fully established, with competition introduced only after it is operating effectively.
Third, the involvement of local authorities or municipalities is pivotal to gaining public acceptance of collection systems. Depending on the system’s design, either the local authority or the PRO may be responsible for managing waste collection operations. However, under any model, a contractual relationship between the PRO and the local authority is essential.
Fourth, dedicated waste collection systems require the participation of end consumers. Consequently, education is a key factor in driving changes in consumer behavior.
Fifth is the involvement of the informal sector. A distinctive feature of the Vietnamese context, compared with existing EPR models in Europe, is the challenge of integrating the informal sector. Legislation should require PROs to engage the informal sector in their operations. For instance, approval criteria could require PROs to submit a plan to State authorities detailing how they intend to integrate or involve informal waste collectors.
Finally, government oversight and enforcement play an essential role. EPR systems are effective only when the government actively monitors and enforces them. Without strong State oversight, producers and PROs often lack sufficient incentives to fully comply with collection, recycling, and reporting obligations. Clear regulations governing PRO licensing, combined with mandatory reporting, requirements to demonstrate compliance with recycling targets, and effective enforcement mechanisms, are crucial to ensuring that business operations align with public policy objectives.
Regarding the proposed policy changes, Mr. Do Tien Doan, Deputy Head of the Waste Management Division at the Department of Environment, said PROs must meet requirements related to their capacity to organize recovery operations and their financial standing, while maintaining an electronic data management system and separate accounting for activities related to fulfilling authorized recycling responsibilities.
In addition, PROs are responsible for organizing and coordinating the recovery, transportation, sorting, and transfer of products and packaging to recycling facilities; managing, tracking, and verifying recycling volumes; handling declarations, reporting, and record-keeping; and ensuring there is no double reporting among manufacturers and importers. PROs are subject to inspection and oversight by the authorizing parties and must undergo independent audits of their declarations and reports. “This establishes a crucial legal framework for the operation of intermediary organizations implementing EPR, fostering a professional, transparent, and accountable system,” Mr. Doan added.
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