Five years to act 
2025 is almost here. We are now just five years away from the 2030 targets set out in the Sustainable Development Goals and Viet Nam's Socio-Economic Development Strategy. By 2030, Viet Nam aims to reach a GDP per capita of $7,500, increase forest coverage to 42%, establish marine protected areas covering 3-5% of its waters, ensure  95% of municipal wastewater is collected and treated, and reduce greenhouse gas emissions by 15.8%.

These ambitious targets reflect Viet Nam's commitment to sustainable development and the well-being of its people. Achieving them will require focused, coordinated efforts in the next five years.

Yet as Viet Nam works toward these targets, it faces significant challenges. Ha Noi was recently ranked the second most polluted city in the world, with an Air Quality Index (AQI) of 210. A few months ago, Typhoon Yagi devastated northern provinces, claiming lives and livelihoods, and damaging infrastructure. Meanwhile, global geopolitical and trade tensions persist, and Viet Nam must balance the goal of rapid development with the complexity of structural reforms.  

From Planning to Action
The circular economy (CE) provides a powerful response to the sustainability challenges we face. At its core, CE is built on the premise that materials can, by design, be reused and transformed almost infinitely. In fact, circular practices have long been integral to Viet Nam's journey, evolving from the traditional "garden-pond-cage" system to more advanced industrial symbiosis within industrial zones.

While the foundation has been laid and the policy framework established, it is now time to rapidly transition from Planning to Action.  In this context, the United Nations Development Programme (UNDP), a longstanding advocate for the CE has crafted a vision to support Viet Nam to advance a transformative agenda, for a Low-Carbon and Inclusive Circular Economy.

Rooted in the Revised Law on Environmental Protection (LEP)  , our vision aims to prepare Vietnamese businesses for the green transition, reshape consumption and production patterns, prioritize circular designs, enable financial flows, promote gender-responsive approaches, and ensure a just transition where no one is left behind.

Moving From Planning to Action through Integration
How can we transition the circular economy from planning to action within the five-year timeframe set by the Government of Viet Nam and international agreements? One key strategy is integration.

To make the CE a reality, it must be viewed not as a standalone topic but as an integrated approach. UNDP proposes four key pathways for such integration to be effective, inclusive, and forward-looking:

1.    Integrating design into Policies, the Foundation of a Circular Economy
At the policy level, which serves as the core umbrella for the circular transition, the measures and incentives must be rapidly implemented. For instance, Extended Producer Responsibility (EPR) was first enacted in the LEP 2022 and has since been widely recognized as one of the most effective policy instruments that drive recycling worldwide. Yet it still lacks essential guiding documents. Gaps include the absence of coefficient (FS) guidelines; unclear incentives for industries to contribute financially, engage in self-recycling, or utilize producer responsibility organizations (PROs); as well as no clear mechanism for disbursing the funds of around VND 1,400 billion (USD 55,123,000) managed by the Viet Nam Environment Protection Fund.

Additionally, Viet Nam needs to adopt a roadmap or a law, for eco-design, setting clear mandates for relevant ministries and sectors . Since up to 80%of environmental impacts can be identified and reduced at the product design stage, such legislation could act as a catalyst for innovation in circular materials and services – critical components of the transformation.  By rethinking design, businesses can also better align with evolving social expectations and regulatory requirements. This approach is most effective when coupled with policies on ‘green public procurement,’ leveraging the purchasing power of local and central governments to stimulate sustainable consumption and production. A key next step would involve developing mandatory, quantitative eco-design requirements, governing indicators such as recycling rates, product lifespan, energy intensity, and recycled content, to align with EPR principles.

For reference, the European Union introduced the Eco-design for Sustainable Products Regulation (ESPR), which came into effect in July 2024, serves as a key component of the EU's 2020 Circular Economy Action Plan. This regulation is designed to establish sustainable products as the standard across the EU market.

2.    Integrating Circular Economy Practices into Priority Sectors

As an outward-oriented country, Viet Nam’s growth is closely tied to international trade and global connectivity. It has achieved the fastest export growth in the region, driven by key sectors such as electronics and textiles. Notably, the international market is increasingly favoring green products. Businesses that can adapt to meet global sustainability standards are already ahead of the curve.

The transition to a CE is not only an environment and climate imperative, but also presents untapped business opportunities for Vietnamese firms. 

Policies like the European Union’s Carbon Border Adjustment Mechanism (CBAM) may seem distant but will have direct repercussions on various stakeholders in Viet Nam. These include aquaculture fishers in the Mekong Delta, coffee producers in the Central Highlands, and dragon fruit women-led cooperatives in Binh Thuan province. Why? Because these policies embed strict environmental standards within their application.  Are these standards out of reach for the thousands of farmers and MSMEs driving Viet Nam’s economy? No. But are we fully prepared to uphold these standards? Unfortunately, the answer is also no. This is precisely where the transformative power of circular economy practices can make a difference. By adopting circular approaches, some sub-sectors can gain a competitive advantage compared to neighboring regions.  

In this context, UNDP recommends prioritizing sectors with higher potential, such as agriculture, electronics, plastics, and textiles. In these areas, we have identified best practices and low-hanging fruits opportunities that can be leveraged, provided the enabling conditions are quickly established. For example: (i) reusing agricultural by-products to reduce agri-waste and ultimately lower greenhouse gas emissions through pilot projects implemented by UNDP and MARD in the coffee, rice, and dragon fruit value chains; (ii) promoting the reuse of industrial wastewater, to cut down both wastewater discharge and the demand for freshwater supplies; (iii) enhancing waste collection and sorting at the provincial level to boost recycling, illustrated by a Norway-funded project implemented by UNDP in collaboration with Quy Nhon City.

Viet Nam is already home to 26,000 Social Impact Businesses, but to foster future growth, technological advancements must be prioritized through increased investment in higher education, research, and innovation, generating spill over for building national capabilities in circular economy.

3.    Nesting Circular Economy Transition within the current institutional reforms 
As recently highlighted by General Secretary To Lam at the 8th Session, institutions remain “the bottleneck of bottlenecks”, hampering the country’s sustainable development. Profound reforms are critical for fostering innovation and driving change. So, how do these relate to circular economy?

The concept of a circular economy may offer a framework for government-led innovation. I It embodies a systemic approach to envisioning development that encourages experimentation, supports startups, and attracts investment in research and development; all of which form the backbone of a circular transition. Let us see some examples.

Although Article 74 of Decree 08 guiding the implementation of the LEP discussed the reuse of treated wastewater, it remains a challenging process for companies because obtaining an environmental license is time-consuming, and authorities often hesitate to grant it due to the involvement of multiple government agencies—such as those overseeing environmental pollution control, water resource management, and industrial safety. This complexity and potential liability may discourage authorities from supporting the reuse of treated wastewater.

Similarly, in the plastic industry, the cost disparity between virgin and recycled plastic remains a major barrier to increasing the use of recycled content in packaging. To overcome this, a coordinated and cross-ministerial effort is required to create effective incentives for companies to use higher levels of recycled materials. This would involve the Ministry of Finance (introducing tax incentives or subsidies), the Ministry of Industry and Trade (promoting sustainable production and consumption through grants or policies under Decision 889), and the Ministry of Natural Resources and Environment (strengthening the EPR by mandating minimum recycled content). However, the division of responsibilities among these ministries often leads to delays and inefficiencies, making it difficult for businesses to receive the comprehensive and timely support necessary for transitioning to a circular economy.

By improving governance frameworks, streamlining regulatory processes, and removing bureaucratic barriers, Viet Nam can foster an environment where innovation for circular economy thrives. A more agile and responsive institutional framework empowers businesses, researchers, and individuals to lead transformative solutions that tackle societal challenges, from air pollution to environmental degradation.

4.    Integrated People and Private Sector for a Just and Inclusive Transition deploying innovative partnerships 
Linear practices also affect public health. Globally, air pollution causes about 7 million deaths per year. In 2023, Viet Nam was ranked  the second most polluted country in the ASEAN Region. While everyone is affected, vulnerable groups such as children and elderly and those living near open burning of waste are the most at risk.

Viet Nam must therefore continue to place ‘people’ and considerations of social equity at the center of the circular transition to ensure it is just and inclusive. This moral imperative is reflected, for example, in the recently adopted Just Energy Transition Partnership.

There are signs of hope. In recent years we have seen inspiring efforts by students, cooperatives, and provinces—all working to circulate materials and resources for as long as possible. This effort reduces environmental pressure in two ways: by slowing the rate at which we extract resources such as soil, sand, and limestone from ecosystems, and by dramatically reducing the release of pollutants into the air, maritime zones, watersheds, and land. UNDP is actively building the capacity of youth, who represent 25% of the population and our future workforce. Through the activities of the Youth Policy Working Group under the Youth4Climate Initiative, we are equipping young people to take play a leadership role in this transition.  

Moreover, closer collaboration is needed among government agencies, businesses and universities to strengthen linkages between policy, research and market opportunities. We cannot overstate the importance of partnerships. UNDP is honored to co-host the Viet Nam Circular Economy Hub with MONRE, which boasts over 100 members and 4,000 unique monthly viewers. We are also proud to support sectoral initiatives: the National Plastic Action Partnership (NPAP) and the Food System Transformation Partnerships. They all present unprecedented opportunities to transform the collective vision for the circular economy transition outlined in Vietnamese policies into tangible actions delivered by actors working together towards a shared goal.

UNDP is ready to support Viet Nam in prioritizing reforms that create a supportive ecosystem for transformation. We aim to be a driving force in support of the country’s shift to a greener, circular, and low-carbon economy, delivering multiple co-benefits, such as protecting human and ecosystem health, advancing climate goals, and fostering economic growth.

The time for action is now.