The circular economy is crucial for Vietnam’s green growth and green economy, helping the country achieve its sustainable development goals. The economic model is based on the fundamental principle that “the output of one product serves as the input for another.”

Operating in a closed loop, the circular economy ensures that the waste from one activity becomes raw material for another, creating a self-sustaining cycle. As a result, the value of products, raw materials, and resources is preserved in the economy for as long as possible, minimizing the consumption of input resources and the generation of waste. This also leads to a significant reduction in environmental pollution and emissions.

Sustainable development, digital transformation, the green economy, and the circular economy are global trends, and Vietnam is embracing them all.

Inexorable trend

According to the Law on Environmental Protection (2020), the circular economy is an economic model where activities related to design, production, consumption, and services aim to reduce the extraction of raw materials, extend product lifecycles, limit waste generation, and minimize environmental harm.

The Prime Minister approved the circular economy development project in Decision No. 687/QD-TTg on June 7, 2022, affirming that its development is essential for economic recovery and achieving Vietnam’s sustainable development goals. The government is expected to approve a National Action Plan for circular economy implementation by 2030.

The issuance of green-focused policies and laws demonstrates Vietnam’s commitment to transforming its growth model towards one that is high-quality, efficient, rapid, and sustainable, while fulfilling its environmental protection and climate change mitigation commitments.

Experts highlight that Vietnam is facing numerous challenges such as resource depletion, environmental pollution, and climate change. These challenges are becoming more complex as the country continues to grow in population, urbanize, and face a slow transition from traditional linear economic models. This leads to increasingly serious problems related to resource supply, waste generation, environmental security, and water security. Traditional linear economies contribute to higher waste, resource consumption, and energy use.

As a result, shifting to a circular economy model that uses resources more efficiently, reduces waste, and limits environmental emissions is an urgent necessity. This approach not only addresses environmental concerns but also promotes green economic growth, improves competitiveness, and reduces production costs for businesses.

To advance the circular economy in Vietnam, the Ministry of Natural Resources and Environment hosts and assigns the Institute of Strategy and Policy on Natural Resources and Environment, in collaboration with United Nations Development Programme (UNDP), VnEconomy/Vietnam Economic Times, and related agencies, to organize the “Vietnam Circular Economy Forum 2024” on December 10, with the theme “From Planning to Action”.

With one plenary session and six thematic sessions, the forum will present an overview of policy directions, mechanisms, and innovative solutions to advance the circular economy in Vietnam. It will also explore the role of the private sector in supporting a circular economy.

In the plenary session, discussions will center on the two mains topics. During the first one, “Vietnam’s Circular Economy Transition: Where are we at? And where are we going?”, experts from the Institute of Strategy and Policy on Natural Resources and Environment at MoNRE will highlight the policy framework for the circular economy for the 2020-2024 period. Discussions will also explore practical steps for the transition to a circular economy, solutions to make it a driver of economic growth, and the role of technological innovation in implementing it.

The second topic, entitled “Accelerate the Circular Economy in Vietnam - from Planning to Action”, will bring together representatives from ministries, organizations, businesses, and experts to focus on advancing the circular economy in Vietnam, from planning to action.

Additionally, the forum will include six thematic sessions focusing on key areas such as industry, circular agriculture, waste sorting, plastics, sustainable production and consumption, and waste recycling.

Leaders in advancing the circular economy

Many businesses in Vietnam have recently recognized the importance of a circular economy in promoting sustainable development, green growth, and emissions reductions. Several have taken the lead in adopting the model.

Nestlé Vietnam, a pioneer in implementing the circular economy, focuses on three key principles: eliminating waste and pollution, extending product and material lifecycles, and regenerating natural ecosystems. The company has improved packaging design to reduce unnecessary materials, replacing virgin plastics with eco-friendly alternatives. Nestlé has also introduced initiatives like using recycled PE and PET plastics for packaging and switching from single-use plastic straws to FSC-certified paper straws. The company’s single-layer packaging simplifies recycling.

All Nestlé Vietnam factories have achieved its “Zero Waste to Landfill” goal since 2015. The Nestlé Tri An plant, the largest coffee manufacturing facility in Vietnam, reduced its CO₂ emissions by over 12,600 tons annually. Coffee grounds are repurposed as biomass material, and treated wastewater is reused for boiler operations, saving over 112,000 cubic meters of water each year. With nearly three decades of dedication to sustainability, it continues to promote the circular economy through innovative solutions.

In the agriculture sector, Mr. Pawalit Ua-Amornwanit, CEO of C.P. Vietnam, emphasized its commitment to sustainability. The company focuses on four pillars: reducing carbon emissions, minimizing its water footprint, reducing plastic pollution, and minimizing waste. By adopting renewable energy and improving water recycling, C.P. Vietnam aims to reduce the environmental impact across its value chain.

Aligned with Vietnam’s 2050 net-zero commitment, C.P. Vietnam is also working towards zero emissions by 2050, supporting the objectives of minimizing resource waste, enhancing recycling, and protecting the environment, as outlined in the draft National Action Plan on the Circular Economy (NAPCE).

Future plans

Regarding upcoming plans to promote the circular economy, Mr. Ua-Amornwanit said the company will enhance and expand its renewable energy system, focusing on increasing solar, biogas, and biomass use in all factories, production sites, and farms. Effort will also be made to boost recycling and minimize waste by optimizing the reuse of production by-products and reducing plastic waste. Moreover, investments will be directed towards innovative technologies and smart solutions to manage energy and resources efficiently, lower emissions, and improve production performance.

Elsewhere, Unilever Vietnam has developed a comprehensive strategy to promote the circular economy, particularly in plastic waste management. This strategy focuses on four main objectives: waste segregation “at the source”, the collection and processing of plastic waste, public awareness campaigns, technological innovation, and policy development.

In February 2020, MoNRE, together with Unilever Vietnam, SCGC, and Dow, launched a public-private partnership to establish a circular economy for plastic waste management. The initiative aims to integrate plastic waste into the circular economy, manage product lifecycles, increase the supply of sustainable materials, raise community awareness, and foster nationwide innovation.

Last April, Unilever Vietnam, in partnership with MoNRE, held the Plastics Circularity Innovation Challenge 2024, to identify and recognize new initiatives and innovative solutions that enhance the plastic circular value chain, with a focus on collecting, sorting, and recycling plastic packaging, especially soft plastics in Vietnam. The program’s broader goal is to promote circular economy models in plastic waste management and support the implementation of Extended Producer Responsibility (EPR) regulations.

Unilever Vietnam has successfully collected and recycled 34,500 tons of plastic waste, turning it into reusable materials. It has also reduced its use of virgin plastic by substituting it with Post-Consumer Recycled (PCR) plastic, achieving 65 per cent recyclable packaging. Currently, 54 per cent of the company’s plastic bottles are made from recycled plastic instead of virgin plastic derived from fossil fuels, with brands like Sunlight, Lux, Vim, and Comfort utilizing 100 per cent recycled plastic.

It has emphasized that adopting a circular plastic economy is an effective solution to combat plastic pollution, reduce greenhouse gas emissions, increase the domestic supply of recycled plastic (reducing the need for imports), and prevent resource depletion. A Unilever representative recommended collaboration between government agencies, waste collectors, recyclers, international organizations, and distributors.

Policies should also be created to encourage businesses to use recycled plastics, support the recycling industry, and engage the public in waste sorting at the source to ensure high-quality input for recycling efforts.