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Introduction
National policy context
In Vietnam, the management of plastic and paper materials falls under the jurisdiction of two key ministries: the Ministry of Industry and Trade (MOIT) and the Ministry of Natural Resources and Environment (MONRE) MOIT oversees the development and regulation of the plastic and paper industries, focusing on production and quality management, while MONRE is tasked with environmental governance and the performance of all industry players Although Vietnam has established a robust regulatory framework for environmental protection and waste management, challenges remain regarding scrap materials, which MONRE classifies as waste, whereas waste service providers view them as valuable inputs for production The importation of scrap, primarily post-use waste from abroad, is permitted only for final production, posing significant challenges for the Government of Vietnam in managing the complexities and high volumes associated with the international scrap market.
The following paragraph presents the legislation framework relating to waste circulation
Figure 2 Overview of material flow in Vietnam plastic and paper sectors
Vietnam's environmental legislation is structured across three key levels: the National Law on Environmental Protection (LEP), originally enacted in 1993 and amended in 2005 and 2014, with ongoing revisions in 2019; regulatory instruments from the national government; and additional regulations from ministries and provincial governments.
The primary legal framework for environmental protection in Vietnam is established by the Law on Environmental Protection (LEP), enacted by the National Assembly in late 1993 and effective from January 1994 This legislation includes specific chapters addressing environmental protection in manufacturing, trading, and service provision, as well as waste management Notably, Article 76 focuses on environmental protection during the importation of scrap While the LEP provides definitions for various waste-related terms, it lacks a clear distinction between waste and scrap, a differentiation commonly found in other countries The current LEP mandates that imported scrap must adhere to environmental regulations and is categorized under items regulated by the Prime Minister.
The second category of legislation includes regulatory instruments issued by the government, such as decrees, decisions, and regulations These instruments offer essential guidance on the implementation and operationalization of the LEP.
Decree No 38/2015/ND-CP serves as the primary regulation governing waste and scrap management, focusing specifically on the importation of scrap for production purposes It stipulates that only organizations or individuals directly utilizing scraps as raw materials, or those entrusted to import scraps for such entities, are permitted to engage in scrap imports However, there is ongoing consideration to limit this provision exclusively to those with actual production capabilities, effectively excluding entrusted entities from eligibility to import scrap.
Decision 73/2014/QD-TTg outlines 36 categories of scrap eligible for import into Vietnam, primarily focusing on materials such as plastic, glass, paper, and steel This includes seven categories of plastic scraps under HS code 3915 and four categories of paper scraps with HS code 4707 Currently, the Government is considering a ban on the import of mixed paper scrap, specifically those classified under HS code 4707900 Notably, between June 2017 and June 2018, approximately 780,000 tons of mixed scraps were imported by 13 paper companies, representing 37% of the total scrap imports in 2018.
Under Circular Number 121/2008/TT-BTC, Vietnam offers incentives for land use, taxation, research and development, and training, while Decree 19/2015/ND-CP encourages public procurement to prioritize recycled products The country has established various policies to support waste circulation, including the Master Plan for Regional Solid Waste Treatment, which addresses northern, central, and southern Vietnam, as well as the Development of the Environmental Industry plan, aimed at 2015 with a vision extending to 2050.
(2009), Development of mechanism to support investment in environmental protection (2009), National strategy on solid waste management to 2025 and vision to 2030 (2012) etc However, the impact of these policies are unknown
The third category of legislation includes regulatory instruments from ministries and provincial governments, such as standards, regulations, and directives Scrap importers must adhere to environmental regulations outlined in Circular Number 41/2015/TT-BVMT This circular mandates that importers provide a certificate confirming compliance with environmental protection standards, present sample-testing results from a designated conformity certification organization, and obtain a certificate demonstrating that quality requirements are met, specifically less than 2% impurities and less than 20% humidity.
Circular No 08/2018/TT-BTNMT established technical standards for imported plastic scrap (QCVN32:2018/BTNMT) and paper scraps (QCVN33:2018/BTNMT), along with the testing and certification procedures However, the complex logistics requirements, which involved checks by four authorities including the Department of Natural Resources and Environment (DONRE) at the importer's location, led to the blockage of 21,591 containers at ports To address this issue, Circular No 01/2019/TT-BTNMT, issued on March 8, 2019, simplified the logistics requirements.
In August 2018, six staff members of two service companies were arrested for faking paper to import 10,000 containers The Prime Minister issued
Directive Number 27/CT-TTg has halted the issuance of new or renewed certificates for entrusted entities involved in importing scrap, prompting the Ministry of Natural Resources and Environment (MONRE) to streamline the list of importable scrap materials In response, the Ministry of Industry and Trade (MOIT) released Directive 06/CT-BCT to provincial departments and Circular 41/2018/QC-BCT, which outlines specific categories of scrap that will no longer be permitted for trade, import, or re-export While this directive does not apply to plastic scrap, it is effective for paper scrap, with a ban on importing plastic scrap set to take effect by 2024.
Directive Number 2227/VPCP-KTTH on importing scrap at ports
4 Circular Number 41/2015/TT-BTNMT dated 9 September 2015 on environmental protection in importing scrap as materials for production
5 Circular No.08/2018/TT-BTNMT dated 14 September 2018 of MONRE on promulgating national technical standards on environment
6 Circular Number 01/2019/TT-BTNMT dated 8 March 2019 on deactivate some regulation under Circular 08/2018/TT-BTNMT
7 Directive 27/CT-TTg dated 17 September 2018 on urgent measures to strengthen management on import and usage of scrap as materials for production
8 Circular 41/2018/TT-BCT dated 6 November 2018 on regulating list of scrap categories to be temporally terminated with trading, import and re-export
Vietnam's environmental policies focus on protection but lack a strong framework for recycling and waste segregation at the source, which is essential for a sustainable waste-to-resource strategy Additionally, there is an unclear differentiation between waste and scrap, and the effectiveness of monitoring and enforcement remains uncertain.
Vietnam is currently revising its 2019 Law on Environmental Protection, focusing on clarifying the differences between waste and scrap materials To prevent the country from becoming a global waste dumping ground, the national policy framework will be updated to include stricter regulations and guidelines regarding the importation of scrap for production purposes.
The upcoming regulations will refine the categories of paper scrap eligible for import in the two analyzed sectors by eliminating certain types Additionally, the importation of plastic scrap for production purposes will be prohibited starting December 2024 Furthermore, only waste service producers will be permitted to handle scrap imports, as entrusted importers will lose their eligibility.
The evolving legal framework for waste and scrap recycling aims to bolster national resources while adhering to stringent international regulations In the plastic sector, waste and scrap will predominantly circulate within the domestic market, whereas the paper sector will maintain its presence in the international market, albeit under more rigorous conditions Additionally, the number of intermediaries in international markets is expected to decline.
Although central legislation permits scrap collection, transportation, and treatment, local authorities have implemented stringent provincial and regional waste management plans that regulate waste flow from other provinces The lack of a clearly revised legal framework to facilitate the circulation of waste and scrap may hinder cross-province business, as regulations vary significantly from one province to another.
Economic context
The Vietnamese plastic and paper industries are experiencing significant growth, with annual rates of 16-18% In 2018, production reached 8.3 million tons for plastics and 3.7 million tons for paper However, both sectors struggle with material shortages, necessitating reliance on international markets The plastic industry is particularly dependent on imports, with 77% of its materials sourced internationally, compared to 57% for the paper sector Notably, the paper industry relies heavily on imported scrap, fulfilling 49% of its material needs, while the plastic sector only requires 7% from imports The future of the plastic sector hinges on the availability and pricing of imported resin, while the paper sector's growth is contingent on the supply of imported scrap.
Figure 3 Material structure of plastic and paper production (thousand tons)
The plastic industry in Vietnam is experiencing rapid growth, with an annual growth rate of 16-18%, making it one of the fastest-growing sectors after telecommunications and textiles Plastic consumption has surged from just 3.8 kg per person in the 1990s to 41 kg per person by 2015, marking a tenfold increase over two decades According to the Vietnam Plastic Association (VPA) and the Chemical Master Plan, by 2023, the projected volume of plastic input materials for production is expected to reach 10 million tons, with 2.6 million tons (26%) sourced domestically and the remaining 7.4 million tons imported.
In 2018, Vietnam imported 6.5 million tons of plastic resin and scrap, which were utilized to manufacture 8.3 million tons of plastic products For detailed insights, refer to Table 8, which illustrates the material flow within the plastic sector.
The plastic sector experienced a material flow gap of approximately 2.1 million tons, as indicated by input-output data This figure is derived from official sources such as the VPA, MOIT, and MONRE, and is calculated using the maximum potential rate of domestic scrap, estimated between 700 to 1,000 kilotons The discrepancy can be attributed to inadequate registration and reporting practices concerning imports.
Figure 4 Material flow in plastic sector
The cost of raw materials for plastic is closely linked to oil prices, with the average import cost currently at 1,626 USD per ton—representing a 9.6% increase compared to the same period in 2017 Vietnam's imports of resin and plastic by-products predominantly come from three key markets: China (37.6%), Korea (24.2%), and Japan (10.7%).
Following China's ban on plastic waste imports, Vietnamese companies have increasingly turned their attention to the scrap material market In 2018, Vietnamese customs intercepted 10,000 containers, revealing that two waste service companies, Truong Thinh and Hong Viet, attempted to import 13,000 tons of plastic waste using fraudulent documents This incident highlights potential discrepancies in material flow data due to unreported cases While the import of plastic scrap currently plays a minor role in the sector's development, it poses significant management challenges and is expected to cease after 2024.
According to decision 1621/QD-TTg issued on September 18, 2013, Vietnam's chemical sector development plan includes seven investment projects aimed at enhancing the plastic sector's material supply By 2024, the country aims to reduce its reliance on imported plastic materials, aligning with national policies against importing plastic scrap The Nghi Son oil refinery, which began operations in November 2018 with a capacity of 370,000 tons of polypropylene and 400,000 tons of PET plastic pellets, is expected to fulfill nearly 50% of domestic demand By 2020, it is projected that domestic production will meet 44% of the plastic material needs, significantly decreasing dependence on imports.
The table below presents the investment plan for plastic materials in Vietnam
No Project Location Capacity (1000 ton per year)
5 Chemical complex from coal to produce
Table 1 List of investment projects on plastic materials in Vietnam
In 2018, Vietnam's paper consumption demand rose by 8-10%, with packaging paper demand increasing by 15% annually The market for packaging paper is projected to grow at an average rate of 9% until 2025 In the first ten months of 2017, Vietnam's export turnover for paper and paper products reached $602.39 million, marking a 45.7% increase from the previous year Despite this growth, the country is expected to import 2 million tons of paper annually, resulting in a trade deficit where imports outpace exports by three times, as domestic supply fails to meet production needs.
In 2018, the paper sector demonstrated a balanced material flow, with inputs and outputs totaling 145,000 tons, which represents 4% of the input materials, indicating an acceptable level of sustainability.
Figure 5 Material flow in paper sector
Unlike the plastic sector, which primarily imports resin, the paper industry focuses on importing paper scrap rather than pulp, with specific types like BCTMP, BSKP, and UKP being the exceptions Vietnam exports around 10 million tons of chip wood annually as raw materials for paper production According to projections from the Vietnamese Pulp and Paper Association (VPPA), the volume of collected and imported scrap is expected to rise each year to meet growing production demands, with the share of imported scrap increasing from 46% in 2015 to 60% by 2030.
Table 2 Overview of scrap paper collection and utilization (thousand tons)
Circular 41/2018/TT-BCT, which outlines the list of scrap categories banned from trading, import, and re-export by December 2019, includes all types of scrap paper (HS code 4707) The revision also prohibits the import of mixed paper scrap (HS code 4707900) due to inadequate source sorting for proper inspection This decision will have a substantial effect on the sector, particularly affecting paper producers who are the primary importers.
Mix paper scrap import by June-Dec 2017 Jan-June 2018
KRAFT VINA Paper Co., Ltd 156,878 104,295
Lee & Man Vietnam Paper Co., Ltd 89,475 99,402
Chanh Duong Paper Mill Co., Ltd 57,991 31,235
Dong Hai Ben Tre Joint Stock Company 26,837 32,882
Dong Tien Binh Duong Paper Co., Ltd 27,881 19,210
JP Corelex (Vietnam) Co., Ltd 15,449 10,251
Saigon Paper Joint Stock Company 6,229 8,644
Muc Son Paper Joint Stock Company 3,926 12,585
Dong A Bac Ninh Company Limited 1,771 23,853
Lam Son Thanh Hoa Paper Joint Stock
Go Sao Industry and Trade Co., Ltd 1,915 2,641
An Binh Paper Joint Stock Company 748 553
Table 3 List of mix paper scrap importers and import volume (ton)
In the first half of 2018, Vietnam imported 4.027 million tons of scrap, valued at approximately 1.232 billion USD, reflecting similar figures to 2016 This included 1.062 million tons of paper scrap and 0.278 million tons of plastic scrap The country had 240 registered importers, with 90 focusing on plastic and 78 on paper scraps However, many imported containers were either not inspected or failed to meet environmental standards, leading to detentions at ports Currently, the number of active importers has decreased to 86, as reported by the Customs of Vietnam, with slow processing costing importers 40-50 USD per day for each container.
Environmental Context
Vietnam's rapid economic growth has significantly boosted the paper and plastic industries, but this expansion has led to serious environmental pollution and health risks The recycling process for paper and plastic involves multiple stages that convert waste scraps into new products or resins, resulting in the generation of substantial waste pollutants.
The rapid expansion of the industry, coupled with heightened public awareness regarding pollution's impact on human health and the environment, has garnered significant attention from communities, local authorities, and environmental scientists Notably, recycling waste and utilizing imported scrap materials, such as plastic and paper, are recognized as industrial production methods that pose a high risk of environmental pollution, as outlined in Decree 40/ND-CP.
Since China halted waste imports on January 1, 2018, Vietnam has become an alternative dumping site, prompting the Ministry of Natural Resources and Environment (MONRE), the Ministry of Industry and Trade (MOIT), and Vietnamese Customs to face challenges in certifying scrap imports for production purposes Many scrap containers have been blocked at ports for failing to meet quality standards or lacking proper documentation The complexities of sampling and inspection arise from the mixed categories of imported scrap In response to environmental concerns and resource limitations, the government is streamlining inspection procedures and reducing the list of eligible scrap items to ensure better compliance with environmental protection regulations.
Waste recycling in production, particularly the recycling of hazardous materials like contaminated plastic and paper, is a key strategy for reducing costs Waste treatment companies and industrial paper producers, along with craft villages, are involved in outdoor recycling efforts While paper scraps are processed by both waste treatment facilities and paper manufacturers, plastic producers typically do not utilize scrap as raw material, opting instead for resin and recycled resin Historically, Vietnam's recycling industry, especially for paper and plastic, was viewed as low-tech, with small, family-run craft villages dominating the landscape However, the sector has evolved, with large foreign direct investment (FDI) paper companies emerging in response to rising demand for paper products There is a notable connection between waste service providers and paper producers, although the dynamics within the plastic sector remain less understood.
In Vietnam, unrecyclable plastic and paper waste is primarily disposed of through landfills or incineration, as there are currently no treatment plants for plastic incineration or RDF A pilot initiative by Dow Chemical aims to repurpose four tons of plastic waste to construct a 1 km road in Hai Phong city Alarmingly, Vietnam is estimated to discharge between 0.28 and 0.73 million tons of plastic waste into oceans each year According to the Ministry of Natural Resources and Environment (MONRE), plastic waste comprises 12.36% and paper waste 5.05% of the total landfill content.
Vietnam lacks a central data bank for solid waste volume and composition While the Ministry of Construction provides data on the total volume of domestic waste in urban areas, comprehensive statistics on other non-hazardous waste categories—such as domestic waste from rural areas, industrial waste, medical waste, construction waste, and hazardous waste—are not publicly accessible and are only available as ad-hoc values Since 2005, the domestic municipal solid waste (MSW) has been increasing at a rate of 11.7% per year, according to the Ministry's data collection system.
In 2018, the daily volume of municipal waste collected reached 40,460 tons, with 24.4% being processed through recycling, composting, or incineration, while the remainder was sent to landfills This resulted in an estimated 1.38 million tons of plastic waste and 564 tons of paper waste remaining in landfills The lack of comprehensive data on national waste generation may contribute to inaccuracies in calculating the total volume of waste that needs to be treated and disposed of.
As the Vietnamese government prioritizes industrialization to enhance economic growth, exports, and the competitiveness of its paper and plastic products, the necessity to safeguard the environment has become increasingly important By adhering to environmental standards, Vietnam can not only bolster its competitiveness but also ensure the sustainable use of its natural resources Thus, while environmental regulations present challenges, they also offer significant opportunities for the nation.
Summary: Obstacles and Opportunities
Figure 6 Vietnam National Context for waste circulation
Study activities and results
Scope
This study aims to enhance the material market for the plastic and paper sectors by analyzing the flow of scrap and waste rather than merely their volumes The focus will be on engaging stakeholders involved in waste generation, transportation, treatment, disposal, and the subsequent return to production, emphasizing a circular model approach.
The study on other aspects of circular economy as prolong product lifetime or reduce demand, avoidance of usag is not covered under this study.
Legal framework
Vietnam has developed a comprehensive legal framework for waste recycling, including legislation for enforcement and incentives The overview of this framework is presented below
Figure 7 Overview of main incentives and enforcement framework
Plastic and paper waste management
A dvices to control, collect, reuse and recycle wastes
Decree No 38/2015/ND-CP on management of waste and scraps issued on April 24, 2015
Requested to classify, manage waste from generation, collection, transportation and treatment; the Decree also regulates that:
● Some other articles set requirements on importing plastic scraps for recycling as raw materials for some domestic production and regulations on management of wastes
● Waste owner shall be responsible for recycling, pre-processing, recovering, co-treatment, heat recovery or contract with a service provider for waste and waste material management" (article 30)
● Infectious waste after disinfection shall be treated like ordinary waste by suitable methods (point b, Term 5, Article 49)
Waste materials imported for production will be securely stored in covered areas designed to prevent fire hazards and dust accumulation Importers are required to have facilities for recycling, recovery, and treatment of impurities, ensuring compliance with regulations Additionally, they must deposit guarantees to confirm that the imported materials are stored appropriately (Article 56).
● Waste importer is required to obtain license on environmental protection and the list is published by MONRE (https://dvctt.monre.gov.vn)
Decision 491/QD-TTg on May 07,
Strategy for general management of solid waste to 2025 with vision towards 2050
To address domestic waste management in urban areas, it is essential to implement the use of 100% environmentally friendly plastic bags in shopping centers and supermarkets, replacing traditional plastic bags Furthermore, it is crucial that 90% of domestic waste is collected and treated appropriately, with the goal of reducing direct landfill disposal to less than 30% of the total waste collected.
Decision 582/QD-TTg dated April 11,
2013 of the Prime Minister approving the project on improving the environmental pollution control for the use of non-biodegradable plastic bags by 2020
● The target of the Decision is to reduce 65% of plastic bags in 2020 (in comparison with 2010)
Decision No 43/2007/QĐ-BYT outlines the management of medical wastes, specifying which types are eligible for recycling It identifies that plastic bottles containing nonhazardous chemicals, along with other plastic containers free of hazardous substances, are classified as recyclable plastic wastes and can be collected accordingly.
Circular No 07/2012/TT-BTNMT outlines the criteria, procedures, and order for recognizing environmentally friendly plastic bags It establishes guidelines for exempting these bags from environmental protection fees, promoting sustainable practices in plastic usage.
Letter No 19/VBHN-BCT on detailing
Law on Trading, services to be banned, limited and with conditions
● Domestic waste and recycle paper and plastics is not listed as good with limited trading or trading with conditions
Import and export plastic and paper scrap
Directive No 27/CT-TTg on some urgent measures to strengthen the management of import and use of imported scrap as raw materials for production
The recent ban on importing waste plastic in China has sparked significant interest among Vietnamese producers, importers, and associations in the plastic recycling industry, particularly as many are from the private sector, known for their business flexibility In the first nine months of 2018, Vietnam imported 175,000 tons of recycled plastics, nearly double the total for all of 2017 In response, the Prime Minister issued Directive No 27/CT-TTg, implementing urgent measures to enhance the management of imported scrap materials for production, stating that imports are not permitted solely for preliminary processing, as outlined in Circular No 41/2015/TT-BTNMT dated September 9, 2015.
Ministry of Natural Resources and
Environment on environmental protection in importing scraps for use as raw materials
The procedure for importing scrap involves specific requirements such as thorough checks, customs approval, and necessary environmental protection certificates, which can extend storage time at customs Recently, Circular 03/2018/TT-BTNMT has revised certain aspects of Circular 41/2015/TT-BTNMT, streamlining the list of goods and simplifying the inspection procedures for imported scrap.
Circular 08/2018/TT-BTNMT National Technical Regulations on Environment for imported plastic scraps QCVN
32:2018 was issued by the Ministry of Natural Resources and Environment (improved from the National Technical Regulation on Environment to import waste plastic for production QCVN 32:2010/BTNMT)
The article outlines the essential requirements for contracts related to the importation of plastic scraps, emphasizing the necessary commitments, classifications, pre-cleaning procedures, and labeling standards for legitimate plastic scrap imports.
According to this regulation, plastic scraps are legally imported including:
● Plastic discards from production process, which are unused;
● Plastic packaging (PET) containing drinking water;
● Uses plastics appear in forms of blocks, lumps, bars, strips;
● Other plastics which are cut into small pieces and cleaned;
Plastic scraps are not allowed to be imported including:
● Used plastics which are not satisfied applied regulations;
● Plastic covers of used equipment, electric equipment such as television, computer, office appliances containing flammable resistant;
● Unfinished combustion plastic National Technical Regulations on Environment for imported paper scraps as production materials (QCVN 33:2018/BTNMT) mentioned that:
Impurities that are not mixed in imported paper scraps include:
● Chemicals, inflammables, explosive substances, and hazardous medical wastes.
Materials that contain or are contaminated with radioactive substances exceeding the exemption level set by QCVN 05:2010/BKHCN, which outlines the national technical regulation on radiation safety, are subject to declaration and licensing requirements as specified in Circular No 15/2010/TT-BKHCN dated September 14.
2010 of the Minister of Science and Technology.
● Hazardous impurities (According to the Environmental Protection Law 2014, hazardous impurities are wastes containing toxic, radioactive, infectious, flammable, explosive, corrosive, poisonous or hazardous properties other harm).
Unwanted impurities are allowed to be mixed in imported paper scrap (no more than 2% of the shipment volume):
● Adhesives such as dust, soil, sand; lanyards and materials used to package imported paper scraps.
● Residues of chemicals against fungi, mold, and insects used to preserve paper scraps before shipping.
Imported paper waste may contain other impurities such as pins, plastic, adhesives, and various materials that adhere to the paper However, these contaminants typically account for no more than 2% of the total shipment volume.
Law on Trading, international trading, buying, selling, processing and storing abroad)
The Vietnam Paper Association has urged the Ministry of Industry and Trade to enhance regulations on the import and export of recycled pulp due to concerns over environmental pollution from pulping waste paper Meanwhile, materials such as waste plastics, paper, recycled resins, and pulp can still be exported as standard goods.
Decision No 73/2014/QD-TTg on list of waste materials to be imported
The importation of waste and waste materials for trading purposes is prohibited, and such imports require Ministerial level permission as outlined in Article 5 of Decree 187/2013/ND-CP The Ministry of Natural Resources and Environment (MONRE) grants this permission to entities that will directly utilize the materials for production, as per Decree 38/2015/ND-CP on waste management Each permission is evaluated individually, referencing Decision No 73/2014/QD-TTg, which identifies 36 types of waste materials eligible for import as production inputs, primarily including plastics, glass, paper, and metals Specifically, the imported paper scrap encompasses various types that fall under these categories.
● Recovered paper (waste and scrap) or paperboard: Kraft paper or kraft paperboard or corrugated or unbleached paper or paperboard.
● Waste paper or waste paperboard: Other paper or paperboard made mainly of pulp obtained from bleached, untreated chemical processes.
● Waste paper or waste paperboard: Paper or paperboard made mainly of pulp obtained from mechanical processes (for example, newsprint, magazines and similar publications).
Waste paper and waste paperboard, particularly those categorized under HS 4707.90.00, encompass various types of unclassified waste and scrap For paper manufacturing companies, this mixed waste paper is crucial as it serves as a primary raw material for domestic production.
The government has recently slowed the process of granting licenses for the importation of waste materials, impacting companies that have already invested in recycling waste plastics and paper This situation has been reported to the Ministry of Natural Resources and Environment (MONRE) by the plastic association, although the paper association has not raised similar concerns.
Official Letter No 3738/TCHQ-GSQL dated 26/06/2018 of the General
Department of Finance and the
Ministry of Finance on the management of imported scrap
On June 26, 2018, the General Department of Customs issued an official directive requiring all provincial and city Customs Departments to submit samples of imported scrap to the Customs Inspection Department for analysis This assessment aims to ensure compliance with environmental technical regulations prior to customs clearance, and it applies to all shipments of imported scrap The directive is effective immediately upon issuance.
Others A series of Free Trade Agreement of Vietnam such as Vietnam-Eurasian
The Economic Union Free Trade Agreements (FTAs), including the ASEAN Trade in Goods Agreement (ATIGA), ASEAN-China FTA, ASEAN-South Korea FTA, Vietnam-Japan FTA, ASEAN-New Zealand FTA, ASEAN-India FTA, Vietnam-Chile FTA, Regional Comprehensive Economic Partnership (RCEP), and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), significantly enhance the export competitiveness of Vietnam's plastic products These agreements also facilitate the expansion of suppliers for input materials, fostering growth in the industry.
Environmental protection tax and punishment:
Laws on Environmental Protection Tax since 2012 regulated the non- environmental friendly plastic bags (Polyethylene) are subjected to charge environmental protection fee
The Decree 155/2016/ND-CP on
November 18, 2016 on punishment in environmental protection
Role of authorities
Waste and Scrap management responsibilities at the central level belong mainly to the Ministry of Natural Resources and Environment, Ministry of Construction and Ministry of Industry and Trade
The Ministry of Natural Resources and Environment (MONRE) is the key agency overseeing the implementation of the Law on Environmental Protection in Vietnam It sets quality standards for scrap imports in line with international commitments and national regulations, issuing certificates to importers while also guiding and inspecting the environmental practices of all stakeholders involved Additionally, the Ministry of Construction (MOC) manages municipal waste and urban infrastructure related to waste treatment and disposal According to Resolution 09/NQ-CP, MONRE will assume overall responsibility for managing various types of waste, including urban solid, medical, rural, and industrial waste.
The Ministry of Industry and Trade (MOIT) oversees the development of industry, domestic trade, and import-export activities in accordance with regulations It provides guidance and supervision for sustainable industrial development, focusing on enhancing environmental performance Additionally, MOIT is actively promoting the establishment of an environmental industry aimed at effective waste management.
Besides MONRE and MOIT, depending on the investment stage, other relevant stakeholders may be MPI (planning and investment), MOST (science and technology), MOF (finance)
Each line Ministry has its line Department at the provincial level The People Committee, differing slightly from province to province, will decide the authorities of local department.
Observation
The authorities of the Ministry of Natural Resources and Environment (MONRE) and the Ministry of Industry and Trade (MOIT) have distinct responsibilities, yet they overlap in two key areas: the import-export of scrap and waste recycling services Both ministries oversee the entry of scrap into Vietnam, with MONRE ensuring that the material is not classified as waste through its inspection process, while MOIT verifies compliance with customs procedures This dual responsibility can lead to increased time and costs for importers and producers Although Circular 01/2009/TT-BTNMT and Resolution 09/ND-CP aimed to streamline these processes, the issue of dual responsibility regarding the classification of domestic scrap as either waste or reusable material remains unresolved.
Stakeholder mapping
The Material Marketplace encompasses various participants, including buyers such as manufacturers and scrap treatment service producers, sellers like scrap generators, and intermediates such as importers Additionally, supporters like policymakers, research institutes, and associations play a crucial role in this ecosystem Notably, within the material flow, a manufacturer can act as both a buyer and a seller of scrap, highlighting the interconnected nature of these roles in the marketplace.
Three groups of stakeholders are:
Consumers and users play a crucial role as stakeholders by purchasing (semi) products from producers for personal use or further production, and they are also involved in selling post-use products These stakeholders can influence the market by establishing customer requirements that prioritize the use of recycled materials in their purchasing decisions.
Producers, as key stakeholders in Group 2, supply (semi) plastic and paper products based on the specifications provided by Group 1 They establish customer requirements for waste service providers regarding the quality of recycled products, which are consistently monitored in each transaction to facilitate efficient production using current technology The decision to purchase recycled scrap for production hinges on the quality of the scrap available.
Waste service providers rely heavily on the availability of scraps, with their business success closely tied to the quality of these materials Technological advancements can enhance scrap quality, making it a key factor in their operations Additionally, economic incentives play a significant role in motivating stakeholder participation within this group.
Group 4 focuses on engaging other stakeholders to create policies and incentives that connect three distinct groups based on their needs This initiative goes beyond mere policy development; it also emphasizes raising awareness and ensuring the quality and availability of scrap materials By fostering these connections, the goal is to enhance material flow and increase transactions within the industry.
Figure 8 Stakeholders in material market for paper and plastic sector
No Name of company Province Region Dealing with Role in value chain
(ton/year) Waste service (ton/year)
1 Tien Phong Plastic Hai Phong x Construction plastics
2 Binh Minh Plastic Hochiminh x Construction plastics 150,000
Dong Nai x Construction plastics, industrial plastic and packaging
4 A Dong ADG JSC Hochiminh x Import and trading primary plastic
Hai Duong x Packaging plastic, Recycle
7 Dong A Group Hanoi x Construction plastic 51,000
JSC Nghe An x Packaging plastics 34,800
10 Tan Phu Plastic Hochiminh x Packaging plastics
11 Hoa Sen Binh Dinh plastic Binh Dinh x Construction plastics 24,000
Long An x Packaging plastic, recycle
13 Ngoc Nghia Plastic Hochiminh x Packaging plastics
14 Stroman Hung Yen plastic factory Hung Yen x Construction plastics 20,000
Da Nang x Construction plastic and Packaging
Packing JSC Hai Phong x Packaging plastics 5,000
Packaging JSC Long An x Packaging plastic, recycle
Hochiminh x Packaging, household plastics, construction plastic and technical plastic
22 Sadico Can Tho Can Tho x Cement packaging
Ba Ria Vung Tau x PVC 200,000
Ba Ria Vung Tau x PS &EPS 86,000
Co., Ltd Dong Nai x DOP 40,000
Bac Giang x PE, PS, PVC 104,127
Ltd Ha Nam x PE, PS, PVC 96,000
35 A Dong ADG JSC Hochiminh x Import and trading primary plastic
Binh Duong x PE, PS, PVC 90,000
37 Xuan Hoa Transport and Mining JSC Thanh Hoa x PE, PS, PVC 72,280
Long An x PE, PS, PVC 70,000
Ha Nam x PE, PS, PVC 45,900
Hai Phong x PE, PS, PVC 43,200
44 Trinh Nghien JSC Nam Dinh x PE, PS, PVC 39,000
47 Thuan Co, Ltd Hochiminh x PE, PP 35,618
51 Sai Gon Paper JSC Ba Ria
54 An Hoa Paper JSC Tuyen
Quang x Pulp and printing paper
55 Tan Mai Group JSC Dong Nai x Printing paper
56 Bai Bang Paper JSC Phu Tho x Printing paper
58 Viet Tri Paper JSC Phu Tho x Packaging and printing paper
59 An Binh Paper JSC Binh
60 Hapaco Corporation Hai Phong x Kraft, Joss and Tissue paper
61 Dong Tien Paper and Packaging Co.,
62 Phu Giang Paper and Packaging Co.,
Bac Giang x Printing and tissue paper
65 Miza JSC Hanoi x Packaging and printing paper
66 JP Colerex JSC Hung Yen x Toilet and tissue paper
Hanoi x Pulp, packaging and printing paper
68 Thanh Dung Co., Ltd Hai Duong x Pulp and packaging paper
Binh Duong x Pulp and packaging paper
Bac Ninh x Pulp and packaging paper
Binh Phuoc x Trading paper scraps
74 Viet My Production and Trading Co., Ltd Bac Ninh x Paper 43,000
75 Tuan Tai Co., Ltd Hai Duong x Trading paper scraps
Thanh Hoa x Pulp and packaging paper
Table 5 Major stakeholders and location
Waste generation
Vietnam, with a population exceeding 90 million and 35% residing in urban areas, is experiencing shifting consumption patterns that contribute to a rising volume of solid waste As illustrated in Figure 1, municipal solid waste represents the largest portion of this waste generation in the country.
Figure 9 Waste generation in Vietnam
In 2014, the Ministry of Construction (MOC) reported that urban areas generated approximately 31,600 tons of household waste per day, while rural areas produced around 31,500 tons daily, totaling an estimated 63,000 tons of household waste nationwide or nearly 23 million tons annually Unfortunately, more recent data on household waste generation is not available.
Domestic waste: The annual growth rate of Domestic MSW is 11.7% and is presented below
Figure 10 Domestic Municipal Solid Waste
In Vietnam, the sorting of household solid waste remains an underdeveloped practice, primarily limited to pilot projects in major cities Due to inadequate infrastructure and inconsistent management, separated waste is often collected and disposed of together, undermining the effectiveness of these initiatives and indicating a lack of public habit in waste separation Nonetheless, some households and waste collectors engage in spontaneous sorting of recyclable materials, transporting them from their origin to gathering points and landfills Cities like Ho Chi Minh, Hanoi, and Da Nang have seen some success with pilot waste sorting programs, but these efforts have yet to progress beyond the experimental stage.
Figure 11 Sorting waste in a craft village near Hanoi, Vietnam
Industrial waste management involves sorting recyclables at their source for reuse and recycling, allowing industries to utilize these materials in their production processes Non-reusable scraps that can be repurposed for secondary production are collected and sold to recycling units, while the remaining waste is transported to storage facilities before being sent to treatment centers.
In the healthcare sector, approximately 95% of central hospitals have successfully implemented medical solid waste segregation in accordance with Ministry of Health (MOH) regulations, as reported by the Ministry of Natural Resources and Environment (MONRE) in 2011.
Solid waste composition
The composition of solid waste in Vietnam varies by region, with food waste constituting the largest share at 50-70% (averaging 64.58%) This is followed by plastics (12.36%), paper (5.05%), and textiles (3.20%) The prevalence of plastic waste is largely attributed to the widespread use of nylon bags, which have low commercial value and are often discarded rather than recycled, as noted in an interview with URENCO Recent analysis indicates that there has been no significant change in this waste composition in urban areas.
Material Hanoi Hai Phong Hue Da Nang Hochiminh city Average
Table 6 Solid waste composition in major cities of Vietnam (%)
Solid waste collection and transportation
The National Environment Report 2011-2015 indicates that household solid waste collection in urban areas averages between 84% and 85% This collection rate increases with the city's grade, with the lowest rates observed in cities classified as below grade.
IV with an average collection rate of 65%, and the highest one belongs to Hanoi city
In Vietnam, waste collection is primarily managed by URENCO companies, alongside private firms, especially in major cities where private companies handle 50% of the waste in Ho Chi Minh City Collection rates vary significantly across regions, with rural areas achieving 40-55%, small towns reaching 60-80%, and remote mountainous regions struggling with rates below 10% Typically, household solid waste in rural areas is collected by local environmental sanitation teams, while some localities also see private companies involved in the collection and treatment of solid waste (MONRE, 2015; Tien N.H, 2014).
In Vietnam, solid waste sorting at the source is not commonly practiced, leading to the collection of primarily unsorted waste in urban areas Waste collection occurs in two main forms: basic waste collection, where residents dispose of waste in designated boxes or packages for street cleaners to collect using small carts, and secondary waste collection, where street cleaners transfer municipal waste into larger rubbish carts for transport to garbage compression trucks and treatment facilities or rubbish containers located in markets and residential areas.
Hochiminh City operates two primary transfer stations: Quang Trung, which handles 1,084 tons of waste daily, and Tong Van Tran, processing 820 tons per day The waste collected at these stations is transported to the Da Phuoc and Phuoc Hiep solid waste treatment complexes, as well as the Vietstar rubbish treatment plant for processing.
Urban areas lack proper rubbish transfer sites for solid waste collection, with Hanoi being a notable example, as it has no transfer site and is located approximately 50 km from the Nam Son landfill Similarly, cities like Ho Chi Minh City also do not have designated rubbish transfer facilities Instead, most urban areas rely on inadequate rubbish rally sites that do not adhere to environmental sanitation standards.
Solid waste collection and transportation are being increasingly socialized across various regions, with URENCO primarily responsible for managing municipal solid waste (MSW) in urban areas In Hanoi, URENCO plays a crucial role, supported by nearly 30 private and collective units that also contribute to the collection and transportation of municipal waste.
In town-level urban areas, only cooperatives, private organizations are responsible for collecting and transporting wastes with fees negotiated with local people under the guidance of local administrations
The waste management flow in Vietnam can be described in the Figure below
Figure 12 Waste flow in Vietnam
Recycling
Vietnam lacks official and consistent data on national recycling rates for waste However, the National Environment Report 2011 estimates that the recycling rate for municipal solid waste is approximately 8-12% by volume, primarily driven by the informal sector in craft villages A 2011 JICA study indicates that the recycling rate is around 8.2%, focusing on materials like paper, plastics, and metals Waste scavengers typically collect these recyclables, which are then transported to recycling craft villages, where about 90% is converted into new products, while the remaining 10% ends up as waste post-recycling.
The amount of recycled paper scrap and plastic scrap in 2018 were 1,602 tons and 700-1000 tons respectively according to the VPPA and VPA
Recycling practices in craft villages rely heavily on outdated manual technologies, leading to significant environmental pollution Furthermore, waste generated in these areas is often not properly treated and is instead mixed with municipal waste and sent directly to landfills, exacerbating the environmental impact.
Recycling technologies in craft villages are primarily manual and outdated, leading to significant environmental pollution Waste from these villages is often not treated and is instead dumped alongside municipal waste into landfills While many recycling facilities exist, they are typically located in urban areas rather than within the craft villages themselves In Ho Chi Minh City, there are 302 recycling establishments, predominantly situated in District 11, which include 67 for plastics, 15 for crystal, 9 for metals, 7 for paper, and 2 for rubber (Source: Ho Chi Minh City DONRE).
Major waste treatment
In Vietnam, waste treatment methods primarily include landfilling, composting, incineration, and recycling Recently, the introduction of thermal treatment technology has expanded the scope of waste management, incorporating waste-to-energy processes like pyrolysis and gasification However, the application of these advanced technologies remains largely unknown.
According to the National Environment Report of 2011, landfilled solid waste constituted 76-82% of the total collected waste in Vietnam, with approximately half being managed in controlled landfills and the other half in uncontrolled sites A subsequent study by MOC/JICA in 2018 revealed that around 76.4% of domestic solid waste in Vietnam is landfilled, while 24.6% is recycled, composted, or incinerated.
In 2018, a total of 40,460 tons of municipal solid waste (MSW) were collected daily, with landfills receiving 76.4% of this waste Among the landfilled materials, plastic waste accounted for 12.36%, totaling 1,380 tons, while paper waste made up 5.05%, amounting to 564 tons.
Figure 13 Domestic solid waste flow in Vietnam
According to MONRE (2011), urban solid waste comprises approximately 60-65% food waste, which is ideal for composting However, the absence of separate disposal of organic waste at the source results in 35-40% of solid waste becoming residual by-products destined for landfills Many composting facilities are underutilized or have ceased operations due to challenges in capital, production technology, and market demand The lack of at-source waste separation leads to the production of low-quality compost that fails to meet local standards, contributing to high production costs and low market prices As a result, the compost market remains limited, and materials such as plastic and paper are not incorporated into the composting process.
A JICA study (Wada H., 2016) reveals that there are 44 incinerators across the country, utilizing burning technologies that range from 10 to 150 tons per day, primarily in urban and densely populated areas This waste treatment method effectively reduces the volume and weight of waste, minimizes the risk of pollution, and conserves land by eliminating the need for extensive treatment facilities Additionally, it shortens processing times and allows for the recovery of thermal energy However, it is important to note that incineration can lead to pollution if emissions are not properly controlled and residual ash is not managed appropriately, and neither plastic nor paper waste is suitable for incineration.
Until 2016, Hanoi's Nam Son was home to the only waste incineration plant for electricity, with a capacity of 20MW and processing 75 tons of industrial and hazardous waste daily In late 2017, Can Tho launched Vietnam's first domestic waste incinerator, capable of handling 400 tons of waste per day and generating 7.5MW of energy The predominant waste-to-energy method in Vietnam is biogas production from livestock, with approximately 500,000 biogas tanks, primarily in rural households, designed for cooking and lighting but not yet utilized for electricity generation While a few modern cities capture methane from landfills, many provinces are exploring waste-to-energy solutions as alternatives to landfilling, although plastic incineration remains unconsidered.
Cost of waste disposal
The costs associated with solid waste disposal differ across regions and are influenced by the treatment technology used and its capacity Local authorities and waste treatment companies utilize the standard cost for solid waste treatment provided by the Ministry of Construction (MOC) as a foundation for developing their pricing mechanisms This information is detailed in Table 2.
Treatment cost (Mill VND/ton/day) Composting Incineration Combined composting and incineration Landfilling Imported technology
Table 7 Cost of solid waste treatment
Source: Adapted from Decision No.1354/QD-BXD dated December 29 th , 2017 of the MOC on announcement of investment rates and standard costs of treatment of municipal solid waste
A summary of waste disposal costs in major Vietnamese cities is presented in Table 3 In Hanoi, the fees for waste treatment services are approximately VND 69,000 per ton for landfill disposal, while incineration costs range from VND 330,000 to VND 380,000 per ton.
Location Company Price (VND/ton) Daily Treatment
1 Hanoi Nam Son landfill 69,000 5,000 Landfill
Thang Long company’s incinerator 380,000 700 Incineration
2 Hochiminh city Da Phuoc waste company 433,560 3,000 Landfill
3 Da Lat Xuan Truong disposal plant 129,000 150 Incineration
4 Bac Ninh Phu Lang disposal plant 330,000 200 Incineration
5 Lang Son Van Lang disposal plant 91,143 50 Incineration
Table 8 Cost of waste disposal
Note: Exchange rate US$1 = VND 23,250
Source: Collected by the team
In addition to waste treatment costs, waste generators are responsible for collection and transportation fees, which range from VND 30,000 to 50,000 per ton based on distance Solid waste disposal service contracts are renewed every five years, while transportation contracts are updated annually A summary of solid waste transport fees in major cities of Vietnam is provided in Table 4.
Location Criteria Unit price (VND) Note
Normal truck with capacity of 10 tons per time
2 Hanoi For household (HH) 3,000- 6,000 per HH per month Decision
Commercial households generating waste volumes of less than 1 cubic meter can expect costs ranging from 90,000 to 130,000 per household per month, while those with higher waste volumes may incur expenses between 208,000 and 500,000 per household per month Similarly, organizations producing waste volumes under 1 cubic meter face costs of 130,000 per organization per month, with higher waste volumes resulting in charges from 208,000 to 500,000 per organization per month.
3 Lang Son Trip based fee 160,000 per trip Decision No
4 Bac Ninh Normal truck with capacity of 10 tons per time 187,886 per trip Decision No
Normal truck with capacity of 5 tons per time
Table 9 Solid waste transport fee in some major cities of Vietnam
Source: Collected by the team
Materials and material flow
In 2018, the plastic sector produced 8.3 million tons of resin and plastic products while consuming approximately 8.5 million tons of resins and scrap The country could only supply 1,000 tons of resin and between 700 to 1,000 tons of plastic scrap, necessitating significant imports Resin is essential for production, meeting only a fraction of domestic demand—15% for polypropylene (PP), 30% for polyethylene terephthalate (PET), and 50% for polyvinyl chloride (PVC) The total volume of imported plastic raw materials reached 5.59 million tons, predominantly comprising polyethylene (30%), polypropylene (24%), PET (8.4%), and PVC (7.8%).
Quantity (1000 ton) 2,491 3,454 3,923 4,605 4,931 Value (1 million USD) 5,760 6,316 5,961 6,283 7,355 Average price (Million USD/1000 ton) 2.31 1.83 1.52 1.36 1.49
Table 10 Volume and values of imported resin for plastic production
796,680 tons of plastic products and semi-finished products such as plates, sheets, film, foil, tubes, tableware, kitchenware, bath, and shower-baths were also imported in 2018
Quantity (1000 ton) 397 478 570 678 769 Value (1 million USD) 2,753 3,138 3,782 6,397 5,408 Average price (Million USD/1000 ton) 6.93 6.56 6.64 9.44 7.04
Table 11 Volume and values of imported plastic products and semi-finished products
According to MONRE, about 20 companies have license to import plastic scraps
In 2018, 615,000 tons of plastic scraps were imported in Vietnam 11
Recycling plastic scrap occupies only a small part in the whole value chain
International (import – export) Domestic TOTAL
Imported product/semi-finished product 797 797
Table 12 Material flow of plastic sector (1000 tons)
The data indicates a negative balance of 2.1 million tons between inputs and outputs, potentially due to unrecorded imports or overestimated waste Even with reduced waste volumes, the negative balance persists, suggesting that the input values for the plastic sector have not been accurately recorded.
Vietnam's paper industry relies heavily on imported pulp due to its inability to fully meet domestic demand However, the use of scrap paper as an input material is on the rise, driven by its cost-effectiveness The production costs for pulp derived from scrap are typically lower than those from traditional sources, thanks to reduced transportation, collection, and treatment expenses Currently, scrap paper constitutes 70% of the total production in Vietnam's paper sector, with certain paper products utilizing scrap materials for 85-90% of their composition, and some even reaching 100% This recycled pulp is predominantly used for manufacturing packaging paper.
Vietnam's paper industry is predominantly driven by packaging paper, which constitutes nearly 70% of total consumption and boasts an average growth rate of 15.8% per year This sector utilizes a combination of virgin pulp, derived entirely from wood, and recycled pulp to manufacture a diverse array of products, including printing paper, writing paper, paper boxes, packaging paper, and paper towels (VPPA, 2018) However, recycled pulp, while essential, is of lower quality than traditional virgin pulp, limiting its use in high-durability packaging The sources of paper scraps include domestic collection and imports, with imported materials primarily coming from the US, Japan, and New Zealand Domestic collection is facilitated by scrap-iron dealers, sanitary companies, waste collectors, and intermediary trade centers.
In 2018, the paper industry generated 3.7 million tons of semi-finished and finished paper products, alongside 185 tons of pulp derived from 4.2 million tons of pulp and paper scraps, with 57% of the materials sourced from imports.
Table 13 Overview of material consumption in paper sector
Paper scrap is the major source for production, counting to 88% of materials in
By 2030, it is anticipated that waste paper collection will rise to 93%, currently fulfilling about 40% of material demand Pulp demand accounts for 12% of total needs, with specific types of pulp such as BCTMP, BSKP, and UKP being particularly significant.
Table 14 Material flow in paper sector
Input Unit Wrapping paper Votive paper Kraft paper Tissue and toilet paper
Table 15 Inputs for paper production in paper craft village in Vietnam
(Average for 1 ton of paper product) Source: Nguyen Mau Dung (2010)
Analysis of interviews and surveys
The primary data for the study came from two sources: the field survey and face- to-face in-depth interviews with relevant actors and stakeholders in recycling industry.
The survey
The survey was conducted with 2,787 samples, randomly taken from national statistical database and 9 related Ministries, NGOs and Associations The sample size per target group and response is presented below
Sector Group 1 (Consumers) Group 2 (Producer) Group 3 (Waste services)
Sample Response Sample Response Sample Response Sample Response
All 851 103 1342 171 680 69 2787 312 29 respondents with more than
1 roles, 94 dealing with plastic and paper
Paper 0 96 522 100 105 43 547 228 10 respondents with more than
Plastic 0 67 820 73 253 60 1067 187 Rubber and plastic is categorized the same sector, thus high volume of samples
Other 851 0 0 851 Distributed under paper and plastic sector
Table 16 Sampling and response of the survey
The survey gathered responses from 312 participants, comprising 103 consumers, 171 producers, and 69 waste service providers, with 29 individuals holding multiple roles in the material flow This research is subject to a bias of ±11% at a 95% confidence level Additionally, the estimated number of producers in the plastic and paper sectors is approximately 1,200 and 2,400, respectively, based on 2015 statistics.
Below are key findings of the survey
The survey participants predominantly belong to the private sector (63%) and foreign direct investment (FDI) (25%), with 25% representing large enterprises and 41% small businesses Additionally, a significant majority (83%) of the respondents have been established for over five years Notably, the distribution of respondents from the plastic and paper industries reflects these characteristics, highlighting the similarities within these sectors.
Figure 14 Characteristics of survey respondents
Leveraging extensive business experience outside of state management, the material flow, including recycled materials, can be enhanced through market mechanisms rather than regulatory controls While the small size of the plastic and paper sectors is a notable factor, initiating large-scale operations—along with some medium-sized ventures—will be crucial for securing resources and fostering commitment to the material market, eventually allowing for independence from size constraints.
2.2.1.2 The response to material market development
A recent survey revealed that 74% of participants view the development of Vietnam's material marketplace positively, with 37% expressing interest in engaging with it Notably, respondents from the plastic sector showed even higher enthusiasm, with 83% supporting the marketplace and 49% interested in participation, compared to 72% and 37% from the paper sector.
A higher proportion of respondents from production and waste services support market development compared to those in the consuming group Notably, there is significant interest in the material market among large producers, with 77% expressing enthusiasm, while interest levels among respondents remain consistent regardless of the size of their operations.
Figure 15 Response to market development and interest in material market
A recent survey revealed that while only 5% of respondents were unable to determine the need for a materials market in Vietnam, a significant 61% expressed uncertainty about their interest To effectively engage potential participants in the materials market, it is crucial to initiate a robust awareness campaign targeting specific consumer groups The underlying reasons for these findings are detailed below.
Vietnam faces significant challenges in managing its medical and plastic waste, with limited providers available for waste purchase and long degradation times contributing to environmental pressure A comprehensive recycling master plan is essential to promote self-recycling initiatives and reduce reliance on natural resources Currently, the plastic sector does not recognize polypropylene (PP) as a supporting industry, despite the high demand for plastic products Without a common market, Vietnamese enterprises are vulnerable to fluctuations in Chinese scrap prices, necessitating the development of a local market for recycled materials The country generates excessive waste, particularly paper and plastic, which exacerbates pollution and highlights the urgent need for effective waste collection and processing systems To remain competitive against foreign markets, Vietnam must prioritize the utilization of its abundant scrap resources and foster raw material trading to enhance environmental protection and meet enterprise demands.
The establishment of a scrap purchasing system will create a reliable platform for buyers and sellers, enhancing market management to minimize secondary pollution and reduce environmental waste This initiative aims to better control supply for production while promoting a significant reduction in plastic waste By facilitating easier access to materials and lowering costs, the market will serve as a vital source for recycling and recovery, contributing to a higher collection rate and less environmental pollution It will operate independently of material sources, ensuring a stable market that supports the strong development of both paper and plastic sectors The comprehensive and sustainable management of this market will prevent spontaneous business activities that negatively impact the environment, ultimately fostering a green living environment By effectively managing plastic waste and supporting legitimate production facilities, the market will enhance the exchange and sale of raw materials, ensuring price transparency and reducing competition with foreign entities This initiative not only aims to lower raw material costs and protect the environment but also encourages the utilization of domestic scrap, thereby providing economic benefits and contributing to energy savings for the country A well-implemented strategy, backed by adequate capital, will be essential for maintaining this market and achieving its goal of a cleaner environment through effective recycling and waste treatment.
To effectively address persistent plastic waste, it is essential to establish legal regulations and improve transportation methods for waste management Additionally, classifying waste at the source and minimizing the discharge of paper and plastic into household waste will contribute to a safer environment By setting expectations that extend beyond current market capabilities, we can create a more sustainable approach to waste treatment.
Unclear to classify ã Need to integrate treatment function for scrap and waste ã MONRE ã Very necessary
The development of Vietnam's material market faces significant challenges, primarily due to the inability to effectively manage waste control To ensure environmental protection, it is crucial to implement robust management practices, regardless of whether the materials are sourced domestically or imported.
The development of the market involves collaboration between various authorities, including state agencies, production manufacturers, and international partners Key organizations such as DOIT, DONRE, and MONRE play crucial roles in establishing policies that support and regulate the market, ensuring transparency and public accountability The state actively manages and supervises enterprises, fostering joint ventures and private companies with expertise in recycling This collaborative approach aims to create a sustainable environment for both local and international businesses while adhering to market economy principles Associations like VCCI, the Vietnam Packaging Association, and the Vietnam Printing Association further contribute to this ecosystem, promoting effective management and innovation within the sector.
All plastic production units and industries should invest in affordable waste recycling machines, priced around USD 650 each, to facilitate self-recycling of plastic waste generated during production This practice not only enhances profitability by allowing the sale of recycled materials at higher prices compared to raw scraps but also supports environmental sustainability Stakeholders, including domestic enterprises, environmental management agencies, and relevant ministries such as MOIT and MONRE, must collaborate to establish effective market supervision and management It is crucial for manufacturers, tax agencies, and environmental organizations to work together in evaluating and controlling environmental impacts while identifying suitable recycling methods The involvement of private companies and associations, like the Vietnam Plastic Association, is essential in promoting the segregation, collection, transportation, and treatment of waste within the plastic and paper industries.
Change required to sustain the material market
To provide information on ã Update application of new technology, according to the needs of the present ã Supply and demand sources ã Domestic and hazardous waste, concerning on recycling issue
To enhance stakeholder connectivity, it is essential to develop technology-driven mechanisms that promote collaboration Encouraging businesses with effective practices to sustain market stability and establishing appropriate purchasing prices are critical steps Additionally, creating supportive frameworks for enterprises engaged in waste collection and recycling is vital Public awareness campaigns should focus on the importance of waste separation at the source, alongside policies that assist organizations in classifying recyclable materials Effective management of waste generation, collection, and utilization is necessary to optimize material and scrap resources while ensuring fair competition and raising awareness among the public and businesses.
Clear and stable policies are essential for the collection and import of recycled materials, specifically tailored for each plastic group It is crucial to avoid frequent tax changes due to financial constraints and refrain from imposing additional environmental requirements that complicate operations for businesses Guidelines for classifying waste at the consumer level should be established, alongside supportive measures to foster market development High taxes should be implemented to mitigate environmental release, particularly concerning imported waste Strict management of waste plastic treatment technologies and production lines is necessary Policies must encourage enterprises to recycle and promote waste classification at the source, while also being suitable for recycling businesses to prevent environmental pollution Additionally, price policies and streamlined communication and reporting systems are needed, alongside clear governmental regulations governing the collection, treatment, recycling, and import/export of scraps Establishing a stable legal framework will help stabilize prices in the recycling market.
The shift in production scale for companies manufacturing plastic and paper products is crucial, emphasizing the importance of transparency and integrity in operations, free from corruption and familial ties Ensuring high-quality production facilities equipped with advanced machinery and compliant sewage systems for both domestic and industrial wastewater is essential for maintaining stable pricing Additionally, investing in technology plays a vital role in enhancing production efficiency and sustainability.
Reason for being interested in market place (interested content)
Paper ã Paper scraps ã Paper scraps, paper products
Plastic ã Plastic ã Plastic ã Plastic scraps materials ã Materials for plastic industry ã Plastic bags and glass, plastic bottles ã Recyclable plastic, biodegradable plastic ã Waste, nylon and plastic packaging
The activities, motivation and constraints under a circular economy
Recycling and reuse of waste materials are more prevalent among producers (44%) compared to consumers (24%), with the plastic sector showing higher engagement (60% for producers and 28% for consumers) than the paper sector (33% for producers and 22% for consumers) Both sectors reveal that consumers are driven by factors such as cost-effectiveness, legal mandates, and the desire to portray a green image within the supply chain However, the influence of end users on intermediate consumers is greater than that of intermediate users on producers Notably, the requirement to use recycled materials in semi-finished and final products is observed in 10% of consumers and 7% of producers.
Figure 17 Activity under circular economy and motivation
Engaging in activities that utilize recycled materials can enable companies to effectively adapt to the evolving material market Stakeholders are driven by potential cost savings and compliance requirements Consequently, it is essential for the marketplace to provide detailed information regarding the recycled content present in products.
When being asked about the constraints for not to increase the ratio of recycling material, quality requirement is most concern (66%), then availability of scrap (45%)
Figure 18 Constraints for not increasing higher ratio of recycle materials
The table below presents additional explanation on motivation and constraints in conducting activities under circular economy of respondents
Consumer Producer (Plastic) Producer (Paper)
Returned by clients to reprocess
To reuse in lower quality requirement
Check reasonable and safe usage
Improvement in packaging with consultation with clients
Package for animal Some export products require 100% recycled plastics Producing technical resin Non-contaminated and mis print materials
Defect product for recycle and recover Only with defect product
In case it is recyclable Some product Plastic cap for bottle
If can be used Only waste materials from company, not from outside
Both waste materials and product
To produce recycled resin Some not meeting requirement Client request
Per benchmark Mix of recycled materials with original Possible to recycle after sale
Collection for recycle All waste materials are collected for reuse
Producing packaging paper for clients For packaging purpose
Collecting waste materials from clients Collect for materials of production Recover materials from collected products
70% recycled materials 5-10% recycled materials Very little
100% recycled Kraft paper 100% recycled paper 90% recycled materials Import materials Recycle to production under certain ratio
1% recycled paper Waste paper OCC Client request Per FSC standard Cheaper
Producing recycled paper Defect product to recycle back to production Recycle paper product
Activity not taken No demand
Must be original resin for pharmacy
Must not use recycled items
Pharmacy packaging, no recycled ratio
Only by-product Original resin only
No requirement from client on recycling material, but quality
Original resin from Korea Not enough recycled materials available Client request
Food sector (water), thus not possible to use recycled materials
Only original materials Original PET
Original plastic only Only collection for sold, not recycle Product are mainly for export
7% recycled materials Only applied with defect product
Scrap paper is recycled for production
OCC recycled Informing clients to rebuy waste materials
Purchase waste paper from packaging company Material is recycled carton Collecting waste paper Recover materials from collected products
No because it contains information for users
For recycling unit recycling bottle, dispose label sold as scrap paper
Defect items to return to manufacturers
Intermediate user, sold is sold
Sold to recycled units sold as scrap
Paper label is required by law
Improvement in production to reduce paper demand
Only recycled paper is used
This might affect quality of products All are consumed by clients, no recycle Daily transfer to consumer
No equipment Defect product is collected for sale, but not recycled by ourselves
Selling products from original resin
To sell as scrap Under trial
No recycle to ensure quality
No recycling of used product
Company vision is sustainable development
58/215/TTLT/BYT-BTNMT on medical waste
To produce environmentally friendly product
Reduce waste ratio to environment Defect product can be recycled as materials
Up to a certain ratio of recycled plastic is possible and cheaper than original resin Cheaper than original resin
Less production time Higher competitiveness Obtain license for business and import waste
Per requirement of waste treatment Environmental protection
Environmentally friendly product, self- degradable
Per market demand and supply Per client request
Per recycling demand of company
Policy of CORELEX - JAPAN Carton box from packaging company
Savings of electricity, water, tree
Reduce waste ratio to environment
Lower benchmark Recycled paper is 3 times cheaper than original pulp Higher competitiveness Ensure production environment Per requirement of waste treatment
Waste to Kraft paper Environmental protection, forest resources
Constraint for higher ratio of recycle materials
Might not meet quality requirement
Paper to meet quality standards
Food packaging must meet requirements on hygiene
Change in material, change in cost High cost, slow supply
The high costs associated with secondary treatment significantly impact product quality, particularly in the pharmacy and food sectors, which demand minimal or no recycled materials This challenge complicates effective product quality management and ultimately leads to a reduction in the overall quality of products.
Recycle many times means lower quality Always ensure product quality
Must meet quality requirement Quality reduces when ratio of recycle increase
Limited wasted PP in country Not enough resource for production Reduce equipment lifetime
Wish to have lots of materials for production
Limited resources, limited collection for recycle
Need equipment and space Always wish to have regular activity Limited choice, thus limited products Wish to renew waste material import license
Import of waste plastic is difficult by law Difficult condition for importing waste materials
Shipping does not accept waste to transport
By client Price of Kraft paper reduced while waste paper increased High cost for secondary treatment
Quality of product reduces along with number of recycle Not to high quality paper Must meet quality requirement Not enough resource for production
Most recycled paper is imported
Limited resources, limited collection for recycle Lack of waste material sources
Limited choice, thus limited products
Difficult to import waste material
Difficult condition for importing waste plastic
Table 18 Motivation and constraints for taking activity under circular economy
In-depth interviews
Between March 30 and April 23, 2019, in-depth interviews were conducted with members and partners of VCCI, totaling 14 face-to-face interviews Participants included two waste service providers, six producers, one product user, three representatives from industry organizations or NGOs, and two governmental authorities.
Following are the key findings and critical issues raised by stakeholders:
2.2.3.1 The importance of recycled material in the production process
Stakeholders acknowledge the critical need to enhance the use of recyclable materials due to the environmental challenges linked to production processes They recognize that utilizing virgin materials, such as pulp and plastic resins, is costly and may increase in expense over time Embracing recycled materials not only supports the principles of the circular economy but also lowers production costs and significantly benefits the environment.
Our company consistently maintains a remarkable 95% usage rate of recycled materials, demonstrating our commitment to sustainability By prioritizing the reuse of recyclable materials, we aim to alleviate environmental strain while simultaneously reducing costs.
Despite using scrap materials as inputs, our finished products are of high quality and adhere to export standards, as confirmed by an in-depth interview with a manufacturer.
2.2.3.2 Drivers for importing used material
A number of common reasons emerged when discussing the drivers for importing used materials:
In Vietnam, the recycling of paper and plastic materials only partially satisfies industry demand due to lax waste classification and disorganized waste collection activities Unlike in developed countries, Vietnam's waste management is characterized by small-scale and spontaneous efforts, with a limited number of specialized businesses Although domestic scrap collection has improved recently, it still fails to meet production material needs, resulting in a significant reliance on imports In contrast, there is an abundant supply of paper available globally.
Imported scrap typically boasts superior quality compared to domestic scrap, as it undergoes rigorous inspection processes This ensures that the material's quality is well-documented and reliable before it reaches the facility.
The recycling industry in Vietnam faces significant challenges, as supporting activities have not yet matured Most machinery, devices, and chemicals used are either homemade or imported, often of low quality and difficult to regulate Additionally, the lack of a suitable legal framework hampers Vietnamese businesses, particularly in areas such as production monitoring, operational efficiency, and product quality Consequently, to maintain a consistent quality supply, companies frequently resort to importing scrap materials from abroad.
Vietnam's lack of a supportive tax policy for recovery and recycling activities poses significant challenges, particularly the requirement for buyers of bottles and waste to provide a value-added tax (VAT) bill for businesses to claim input tax deductions This requirement makes it nearly impossible for scrap collected from individual sellers to generate VAT bills, resulting in domestic suppliers failing to meet the necessary documentation for tax benefits In contrast, developed countries have established processes, incentives, and regulations that promote the collection, classification, and reuse of recycled materials, making the net price of imported scrap more competitive than that of domestic sources.
2.2.3.3 The most difficult hurdle to using less virgin-based materials
The survey and interviews revealed that current policies on importing scrap pose significant challenges and risks for companies seeking to reduce their reliance on virgin materials Stakeholders noted increasing difficulties due to stricter regulations on imported scrap, particularly concerning plastic materials, as most recycled inputs are sourced from abroad Notably, Resolution No 09/2019/NQ-CP permits the import of scrap for plastic production only until December 31, 2024, raising concerns about the future availability of these essential resources.
Many businesses in the packing, paper, and plastics industries are facing severe material shortages and potential shutdowns due to tightened government regulations on scrap imports, which have led to delays in accessing essential materials Approximately 5,000 containers, each valued at $10,000, are currently stranded at ports, incurring daily demurrage charges of $50 to $100 This situation has caused major disruptions in production and delayed the delivery of scheduled goods, putting these companies at significant risk of financial loss and potential bankruptcy, according to a representative from a business association.
In 2018, the company entered into a supply contract but faced challenges in fulfilling deliveries due to a shortage of materials Additionally, the inability to utilize domestic recycled plastics, attributed to their low quality, further exacerbated the supply issues.
2.2.3.4 The biggest risk to running their business
Stakeholders expressed concerns over the stability and quality of material sources, identifying conflicting government policies that classify imported scrap as waste as a significant risk Due to the inadequacy of the domestic waste market to fulfill production needs, importing remains essential However, if Vietnam enhances its collecting and recycling industries, companies would be inclined to transition from imports to domestic sources, addressing critical production and environmental challenges Conversely, a ban on scrap and waste imports without viable alternatives could pose substantial risks to these stakeholders.
2.2.3.5 The willingness and readiness to contribute to the development and operation of a Vietnam Materials Marketplace
Stakeholders are eager to participate in a materials marketplace, recognizing its potential benefits, such as improved access to new customers and opportunities to supply by-products for other industries For instance, solid waste contaminants like plastic and metal from pulp and paper production can be effectively managed for reuse They believe that a marketplace platform could foster a positive and transparent business environment by providing comprehensive data on materials, products, pricing, quality, and the business performance of all participants.
The material marketplace presents a valuable opportunity to discover new sourcing destinations for materials Currently, accessing foreign websites is essential for finding relevant information on material sources, including waste prices and import-export statistics However, this crucial data is often lacking for Vietnam, highlighting the need for a dedicated platform to enhance market accessibility and transparency.
Companies with effective quality tracking systems and well-managed internal production processes are increasingly seeking services that provide continuous insights into the destination of their by-products.
Group 1: Product user, distributor, consumer
Coca-Cola Vietnam Beverages Ltd is committed to sustainable development through its initiative to green products The "Zero Waste to Nature" program focuses on improving waste sorting at the household level and increasing plastic waste collection rates In early 2018, Coca-Cola set an ambitious target to achieve by 2030, reinforcing its dedication to environmental responsibility.
• 100% of plastic bottles of Coca-Cola will be collected at global level
• Increase the ratio of recycled PET (rPET) to 50% to mix with primary PET resin to produce bottles (the current rate is 100%)
For the Vietnamese market, the following activities will be implemented to achieve the targets:
In 2019, Coca-Cola Vietnam aimed to incorporate at least 10% recycled PET (rPET) into its bottle designs, with plans to increase this ratio to 20% and 30% in the following years However, the company has encountered several challenges in meeting these sustainability targets.
- There is no enterprise that can produce rPET in Vietnam Therefore, rPET must be imported Hence, the cost of bottles production containing rPET will be higher;
- No company in Vietnam can produce recycled plastic granules that satisfy the standard for food containers;
- Currently, the mix of rPET with virgin PET resin to produce bottles is in testing phase to check the conformity with national TCVN requirements
When utilizing rPET in final products, it is essential to consider several factors, including the quality of rPET granules, the capacity of chosen recycling units, and the prevailing market demand and pricing for rPET.
The Packaging Recovery Initiative (PCRI) aims to enhance awareness and improve collection rates while promoting advancements in recycling technology Coca-Cola Vietnam identifies key challenges in plastic waste management, including insufficient awareness regarding waste sorting, inadequate infrastructure for collection and recycling, and high investment costs associated with recycling technology.
A successful partnership hinges on commitment, as no single entity, including Coca-Cola, can address industry challenges alone The VPA plays a crucial role in fostering connections among enterprises, ensuring a unified voice to safeguard their collective interests.
VBSD, NGO_GreenHub, UNESCO in Ha Long, Hue, Da Nang, HCM on activities related to waste collections
Coca-Cola Vietnam is establishing a marketplace for recycled materials to connect sellers and buyers, focusing specifically on food-grade quality plastic products The company is committed to sourcing recycled PET (rPET) exclusively from qualified domestic suppliers This marketplace will significantly enhance the motivation for the existing scrap collection system in Vietnam, promoting sustainable practices within the industry.
To promote circular economy in Vietnam, Coca-Cola Vietnam will be willing to work with other companies, VCCI and concerned agencies.
Group 2: Producer
In the primary plastic processing industry, waste primarily consists of packaging and containers from imported materials, which are collected and sold to recycling units According to Phu Giang Paper and Packaging Company, the average solid waste generated during paper recycling is between 1-2%, with a maximum of 5% This waste is further segregated to recover recyclable materials like metal and plastic, which are then sold to recycling units The company collaborates with Thuan Thanh Bac Ninh Environment Company to manage non-recyclable waste, such as oil, grease, and gloves, which accounts for about 50% of the 1-2% waste removed The treatment costs for this waste management range from VND 10-20 million per month, with a production capacity exceeding 50,000 tons per year, or approximately 5,000 tons per month.
At Lee & Man Vietnam, we assess solid waste contaminants such as plastic and metal generated during the paper scrap sorting process for potential reuse and recycling Waste that cannot be reused is processed at our facility, with the resulting ash being sold to a cement company for cement production or to other companies for the creation of unburnt bricks.
70-75% recyclable plastics collected 25-30% are wastes
Figure 19 Flow of plastic scraps in craft village
During our on-site observation, we identified two distinct models for handling imported plastic scraps The first model is exemplified by Vinatic JSC, a medium-to-large company in an industrial zone, which processes several thousand tons of materials each month, achieving a high recyclability rate of 98-99% with only 1-2% impurities such as labels, metal, and paper They employ a dedicated inspection team that documents the condition of imports before processing In contrast, the second model operates at the craft village level, where only 70-75% of the imported plastic scraps are recyclable, with 25-30% classified as waste This waste includes approximately 5% metal contaminants, along with other materials like paper and adhesive tape, while soil and water make up about 5% After a second classification, around 12-15% of the non-recyclable materials are sent to landfill sites for disposal.
Legal recycling is conducted by licensed enterprises authorized by MONRE to import and recycle plastic scraps, typically situated in industrial zones equipped with advanced technology and high operational standards In contrast, smaller businesses operating without MONRE licenses are often found in craft villages While both models utilize imported materials for production, they differ significantly in terms of investment costs, production capacity, and the associated economic and environmental benefits The following table outlines a comparison of the costs and benefits of these two recycling models.
Legal recycling enterprises Craft villages
Efficiency of imported scraps as input materials
98-99% are recyclable; impurity is only 1-2% only 70-75% can be recycled
Capacity = 20 tons/month After segregation, produce 15.5-16 tons of recycled plastic (output)
Recycling activity Dry production of granulation technology with magnetic heating system, only pure
PE plastic smell, without smoke
Washing steps are not applied, so water is only used to cool down the plastic granules
Wet technology, normal heating: Sorting - cutting, grinding and washing - drying - melting and extruding - granulating
Price of input materials VND 6,000-7,000/kg for domestic scraps
VND 12,000-14,000/kg for imported scraps
VND 12,000/kg for imported scraps
Operating cost: electricity, workers, transportation, etc
10% Classification cost (for 20 tons): VND
12,000,000/20 tons Worker (for 15,5 tons): VND 900/kg Electricity (for 15,5 tons): VND 600/kg Transportation fee (from export port to factory): VND 13,000,000/container 20 tons
VND 21,500/kg VND 330,000,000/15.5 tons/month
Benefit = (VND 20,000/kg * 4,000,000) - 10% management cost - cost of input material (3,200 ton * 12 mil/ton + 800 ton * 6 mil/ton)
Table 19 Comparison of two plastic recycling models
Vietnam currently meets only 20% of its plastic material demand, relying on imports for the remaining 80% The majority of these imports consist of virgin and recycled resins, with plastic scraps making up a minor portion Domestic sources of plastic scraps, such as bottles, buckets, and pots, are limited in volume and often highly contaminated compared to imported scraps Recycling enterprises in Vietnam are increasingly interested in utilizing recycled materials due to their lower costs and high domestic demand Domestic plastic scraps are priced at approximately USD 2.6-3.0/kg, while imported scraps can cost nearly double In terms of granules, primary plastic costs around VND 30,000/kg, whereas high-quality recycled plastic granules are available for about VND 22,000/kg, resulting in a price difference of approximately USD 350 per ton.
Companies expressed concerns about stringent regulations on scrap imports, which have led to a shortage of raw materials for production Additionally, factors such as supply and demand dynamics play a crucial role in the scrap importation process Furthermore, the ongoing smuggling of scraps by small Chinese traders continues to impact scrap prices significantly.
Rapid changes to risk-related policies, particularly those outlined in Resolution 09/2019, significantly impact access to essential input materials by restricting production to intermediate goods, such as plastic pellets from scrap, until 2024 Consequently, companies are compelled to invest in additional equipment to manufacture final products like packaging materials, leading to increased competition in the market as more businesses enter the production of these final goods.
Group 3: Waste Service Provider
URENCO Hanoi, a leading waste collector and landfill operator, faces significant limitations in recycling activities, as most recyclable materials like metal, plastic, and paper are manually collected by scavengers and sold to recycling companies In its subsidiaries, including URENCO10, URENCO11, and URENCO13, the recycling process is primarily restricted to the segregation of recyclable materials as scraps.
In 2007, a pilot 3R project was launched in four wards across four districts in Hanoi, focusing on the classification of organic waste to produce compost at Cau Dien Waste Treatment Company (URENCO7) While the quality of the compost produced is satisfactory, the project's economic efficiency fell short of expectations due to high operational costs, resulting in elevated prices and reduced competitiveness against similar products.
URENCO Hanoi has initiated a pilot program involving a service team dedicated to segregating recyclable materials and purchasing them from scavengers at market prices Despite this effort, the implementation has proven to be unfeasible due to various challenges.
• The purchasing group is not specialized, purchasing prices was not identified properly, therefore, those type of collection is not effective;
• Facilities and vehicles were not invested;
• Requirement of big workshop area for storage;
In Vietnam, the cost of treating domestic waste through landfilling is VND 500,000 per ton, which includes transportation fees, while the price for 1 cubic meter of domestic waste is VND 208,000 per ton For industrial waste, incineration treatment costs range from VND 800,000 to VND 2,500,000 per ton, influenced by the waste composition, distance, and treatment technology used Hazardous waste treatment incurs the highest costs, ranging from VND 2,000,000 to VND 15,000,000 per ton, depending on the waste code and applicable technology as outlined in Circular 26/2015 on hazardous waste management by the Ministry of Natural Resources and Environment (MONRE).
Treatment price by incineration is VND 400,000/ton for domestic waste and VBD 500,000/ton for industrial waste, excluding transportation fee
The daily waste collection amounts to 300 tons, with 30% currently being recycled; this ratio is projected to increase to 50% by the third quarter of 2019 Among the recyclable materials, plastics and nylon bags make up 35%, metals account for 10%, and paper and glass each represent 5% The remaining 50% consists of 25-30% brick, stone, and soil, along with 15% organic waste, which is being utilized to produce compost.
Our company efficiently collects and recycles various plastic scraps, including PE, PP, PET, and PVC, while excluding LDPE and HDPE The recycling process yields plastic pellets for domestic market trading and straps for internal use Additionally, we gather paper scraps, which are sold to specialized recycling units.
Group 4: Other stakeholders
According to data from the Vietnam Paper and Pulp Association (VPPA) and the Vietnam Plastics Association (VPA), the total domestic scrap collection remains minimal, with only 640,000 tons of paper scraps and 700,000 tons of plastic scraps collected in 2018 This collection is not part of a systematic process but is instead carried out by individual scavengers and junk shops operating at three different levels.
• 1st level: scavengers and waste pickers who directly collect recyclable materials at households, waste gathering points and even in landfills;
In Vietnam, numerous provinces are home to small-scale junk shop networks that buy recyclable materials from scavengers and waste pickers, as highlighted by Greenhub in Hanoi These junk shops play a crucial role in the recycling ecosystem, facilitating the collection and processing of valuable resources within local communities.
Large-scale scrap dealers play a crucial role in the recycling process by purchasing recyclable materials from junk shop networks For instance, Greenhub and Viet Trung Environmental Technology Co., Ltd highlight that nearly all plastic scraps collected from a network of junk shops are consistently sent to dealers in Hung Yen, which is home to two prominent plastic recycling craft villages.
Due to insufficient domestic supply of recyclable materials, the paper and plastic industries in Vietnam are reliant on imports for production inputs In 2018, the plastic manufacturing sector imported over 5 million tons of plastic materials, primarily from the Middle East, Korea, Taiwan, and the USA, with virgin plastic making up the majority and plastic scraps accounting for less than 10% Additionally, domestic collection met only about 40% of the paper industry's demand.
- about 3 million tons per year - had to be imported
In 2018, new regulations regarding imported scrap materials significantly impacted VPA and VPPA enterprises due to complex customs clearance procedures involving multiple inspection agencies, including local DONRE, MONRE, customs, and independent appraisal firms However, in March 2019, these regulations were revised to streamline the process by removing local DONREs from the verification process, allowing only independent inspection units and customs to be involved VPPA advocated for paper scraps to be classified as input materials rather than scraps to alleviate inspection challenges Additionally, it is crucial for recycling facilities to adhere to stringent environmental management standards concerning wastewater, solid waste, and gas emissions Both VPA and VPPA have voiced their concerns about the need for policies that enhance the collection and recycling of domestic scraps.
In 2018, Vietnam's paper industry had a total production capacity of 3.6 million tons, primarily serving domestic needs, with exports to China reaching only 640,000 tons Meanwhile, the plastic industry produced 8.3 million tons, including 897,000 tons of plastic pellets exported, while the remaining 7.4 million tons comprised plastic products for both export and domestic consumption.
Vietnam's Division of Environmental Industry and the Department of Waste Management face challenges in developing and managing recycled materials markets for plastic and paper Currently, only 20 licensed enterprises are authorized to import plastic scraps, while many others engage in smuggling, often linked to craft villages Imported containers frequently contain less than 75% recyclable material, prompting governmental agencies to prioritize strict management of these imports A comprehensive materials marketplace should encompass both imported and domestically sourced materials, as domestic supply consistently falls short of demand Establishing a transparent and reliable marketplace is crucial for monitoring scrap imports and enhancing the collection and availability of domestic materials.
The VPA emphasizes the necessity of a materials marketplace platform to address the insufficient domestic supply of input materials, meet the growing demand from large corporations for recycled content in production (30-50%), and counter the limitations of primary plastic derived from finite oil resources, especially given that recycled plastic is more cost-effective In light of Resolution 09/2019/CT-TTg, which prohibits the use of imported scraps for intermediate products, many enterprises are transitioning to produce final products, highlighting the importance of a materials marketplace in aligning supply and demand for input materials This platform would facilitate the classification and collection of domestic scraps while providing essential information on material origins, pricing, and specifications, which are currently challenging to access.
Identification of future challenges and recommendations
SWOT analysis
To gain insight into the current state of the recycling sector and explore the feasibility of establishing a marketplace for recycled materials and waste-to-resource strategies, a SWOT analysis is conducted This analysis highlights the sector's strengths, weaknesses, opportunities, and threats, providing a comprehensive overview of its key characteristics.
- Vietnam has favorable natural and political conditions to develop market place for recycling material
The recycling rate remains low, primarily due to the reliance on informal networks of workers Additionally, various small and medium-sized enterprises are engaged in processing recyclables throughout the value chain, contributing to the overall recycling efforts.
- High growth rate of paper and plastic industry
- Abundant and cheap human resource is also an advantage to the development of the industry
- High willingness of stakeholders to participate in marketplace
- The potential for leveraging informal waste sector members as a vehicle to support the adoption of waste segregation practices and in order to expand waste collection coverage
- Some waste segregation practices (albeit limited) already exist, which could be leveraged and up-scaled, both formally and informally
- Demand for recycled products including paper and plastic remains high as Vietnam economy is developing and population is rising
- Production capacity of recycled based materials (paper and plastic) remains low, technology is backward, domestic production has not met consumption demand, especially for those products of highest demand
Domestic production of plastic and paper now only meets partly of the demand
- Paper and plastic industry is still highly attractive for investment The increasing number of foreign investors in the industry shows the interest level of foreign investors in the industry
- Lack of a strategy, vision and goals for recycling sector, including targets for the conversion of waste into resources
- Scrap collection system and rate in Vietnam are low developed
- Paper and plastic production technology is still backward, leading to inefficient production and environmental pollution
- Paper and plastic enterprises are not active in establishing their own domestic collection system
- Paper and plastic industry is tightly regulated by the Government
- Most recycling enterprises are still dependent on external sources for input materials The proportion of imported input is still very high, which has negative impacts on production
- Unclear policy direction on recycling industry development, scrap management and waste collection and separation
- Lack of a policy and regulatory framework supportive of waste-to-resource approaches
- Limited awareness of stakeholders at all levels on circular economy and recycling and 3R principles
- Limited experience existent in the country in implementing waste-to-resource approaches
Vietnamese enterprises are grappling with heightened competition from imported products, particularly in the high-quality paper and plastic sectors, where local producers struggle to meet demand Additionally, the market for certain products has reached near saturation, impacting stability and production costs Household and craft village enterprises in the recycling industry face significant challenges as they transition from traditional production methods to modern practices while striving to comply with environmental regulations.
Recommendations
Creating a materials marketplace is essential for addressing Vietnam's environmental pollution while fostering a circular economy To achieve this, several strategic actions must be implemented.
Implement programs and tools for gathering data on material flows across entire supply chain
To successfully transition to a circular economy, Vietnam must enhance data accessibility regarding the flow of imported materials post-port Currently, limited information and significant discrepancies in existing data suggest the presence of undocumented and illegal material flows, posing risks to pollution control and economic growth Without actionable data, conflicting policies could waste resources and hinder progress Therefore, the Vietnamese government should collaborate with industry to implement localized programs and tools, such as the Materials Marketplace platform, to facilitate the collection and transparent reporting of material flows from both imports and domestic sources This initiative will not only support innovation, investment, and policy enforcement but also pave the way for a transactional system that connects producers and consumers of reusable materials, ultimately fostering a robust domestic circular economy.
Development and completion of policies on waste management with focus on scrap and recycling
Vietnam must enhance its waste management legislation, particularly concerning scrap and recycling Key actions include revising Decree 38 to improve waste and scrap management, clarifying the distinction between scrap and waste, and creating policies that incentivize the recycling industry while promoting waste segregation at the source Additionally, the development of a Recycling Law is essential, treating domestic waste materials as valuable resources to reduce landfill disposal in alignment with the National Strategy and Action Plan on Green Growth.
Promote active and efficient implementation of existing policies and master plans on waste management with a focus on waste-to-resource approach
Vietnam must advance the successful execution of its National Strategy on Cleaner Production in Industry to minimize solid waste in production This includes stringent control of scrap imports to prevent illegal waste entry, as mandated by the LEP 2014 Additionally, the formalization of recycling activities is essential through the establishment of a robust recycling industry, in line with the National Strategy and Action Plan on Green Growth Furthermore, enhancing waste management infrastructure is crucial, requiring effective implementation of established solid waste management master plans.
Invest in programs to increase the awareness and innovation in the circular economy and recycling industry to change behavior and attitude of both policy-makers and consumers
This study emphasizes the dual challenge and opportunity for companies striving to balance high profitability with environmental responsibility It reveals that shareholder concerns about environmental impact and the perception of being a "Green" company are essential for reducing costs and increasing market share Many businesses now view environmental management and recycling as strategic tools for gaining a competitive edge However, the current low public awareness of the circular economy and recycling diminishes the perceived benefits for entrepreneurs To address this, initiatives should be developed to encourage companies to explore these concepts, with rewards for adopting circular economy practices Establishing innovation centers or zones that utilize data from by-product streams, supported by both internal and external investments, can foster regulatory flexibility, validate technologies, and enhance outreach and education efforts.
Formalize role of business associations in a Circular Economy committee focused on policy, enforcement, incentives, data transparency and education
Stronger industry involvement is essential in shaping and implementing policies in Vietnam, particularly regarding scrap management The recent tightening of import regulations on scrap has significantly impacted the paper, plastic, and related manufacturing sectors Business associations like VCCI, VPA, and VPPA must play a crucial role in fostering business sector development and bridging the gap between the government and the business community Establishing a Circular Economy oversight committee, led by VCCI and comprising industry representatives, government officials, and NGOs, is vital for balancing pollution control, economic growth, and social equity This committee would facilitate ongoing dialogue with the government on policies affecting the business sector, including economic, trade, financial, environmental, social, and legal issues Without an effective mechanism for addressing industry concerns and implementing actionable programs, the engagement of the business community will likely remain insufficient.
To effectively implement the recommendations, Vietnam needs a detailed and transparent roadmap for establishing a materials marketplace This should prioritize economic, social, and environmental benefits for stakeholders, set up necessary preconditions for successful execution, and communicate a clear long-term plan to relevant parties to reduce transition costs Immediate priority actions are essential to kickstart this process.
1 Present details of regulatory and manufacturing disconnections and opportunities to the VCCI/VBCSD Circular Economy Advisory Committee and work through solutions to protect the environment while allowing viable materials needed by manufacturing into Vietnam
2 Use a localized Materials Marketplace platform implementation as a central data collection and tracking system for government and business sectors
3 Establish an innovation center or innovation zones using material data gathered from the identified by-product streams and fueled by internal/external investment It would provide an opportunity for regulation flexibility and technology proof of concept and provide valuable material for outreach and education
4 Establish better tracking and verification systems to allow for smooth flow of materials through Vietnam’s ports
5 Use the VCCI/VBCSD November 2019 Sustainability Summit to bring these commitments together for implementation