Vietnam - Country Commercial Guide
Environmental Technology

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-09-15

Overview

Vietnam’s rapid growth and industrialization have caused negative impacts on the environment and natural assets. According to the World Bank, from the beginning of its market transformation, Vietnam has emerged as the fastest growing per-capita greenhouse gas emitter in the world – growing at about 5 percent annually in 20 years. Demand for water continues to increase, while water productivity is low, about 12 percent of global benchmarks indicated by a World Bank report on water. Unsustainable exploitation of natural assets such as sand, fisheries, and timber could negatively affect prospects for long-term growth. Compounding the problem is the reality that much of Vietnam’s population and economy is highly vulnerable to climate impacts.

Urbanization and strong economic and population growth are also raising concerns about the rapid depletion of natural resources and threats to the environment that are causing increasing waste management and pollution challenges, especially air pollution and wastewater discharge in resource intensive industries. Waste generation in Vietnam is expected to double in less than 15 years. Linked to this is the issue of marine plastics. Ninety percent of global marine plastic pollution is estimated to come from just 10 in-land rivers, and the Mekong river is one of them. Vietnam is among the 10 countries worldwide that are most affected by air pollution. Water pollution has significant costs on productivity of key sectors and human health.

Realizing the urgent need to promote a shift towards more sustainable industrial development pathways, the Government of Vietnam has paid special attention to the issue of green industry, where environmental management practices in industrial products and processes are put in place to improve resource productivity and environmental conservation.

Industry Structure

At the central level, the Vietnam Environment Administration (VEA), under the Ministry of Natural Resources and the Environment (MONRE), is the main body in the Vietnamese Government that issues regulations, standards, and permits, and performs inspections.

The Ministry of Public Security (MOPS) conducts investigations and issues sanctions to ensure enforcement of environmental protection laws and regulations, while the Ministry of Industry and Trade (MOIT) issues regulations for specific industries and conducts inspections. This system is replicated at the local government level through subsidiary offices of the three ministries.

The Departments of Natural Resources and Environment (DONRE) at municipal and provincial levels is responsible for the management of environmental protection activities in the local areas.

Vietnam’s Law on Environmental Protection was first enacted in 1994 and updated and strengthened in 2005 and 2014. Following the enactment of the law, Vietnam issued draft regulations for environmental protection, including Decree 38 on waste management in 2015, Decree 29 in 2008 on the management of industrial parks, and Decree 80 in 2014 on water drainage and wastewater treatment. Central-level attention on protecting the environment also includes setting environmental sustainability goals in its 2015-2020 plan, issued in 2016.

On February 1, 2017, Decree No. 155/2016/ND-CP on Sanctioning Administrative Violations in Environment Protection went into effect. The decree puts in place fines up to VND 1 billion (USD 44,400) for individuals violating environmental protection, and up to VND 2 billion (USD 88,800) for organizations, the highest administrative fines ever to be put into effect.

During the latest meeting in May 2021, Vietnam’s National Assembly passed the Revised Law on Environmental Protection. The new law will replace the 2014 version, give communities a bigger role in conservation, and impose responsibilities on corporations. The law, which will go into effect on January 1st, 2022, requires owners of factories to use the best available technology to control pollution and limit environmental impacts, and defines residential communities as an essential part of the environment to be protected.

Leading Sub-Sectors

The majority of revenue and employment for environmental goods and services in Vietnam can be found in services relating to water purification and delivery, sewage and wastewater treatment, and solid waste management. While Vietnam’s technical capacity is improving in the water, wastewater, solid waste management, and (to a lesser extent) the environmental consulting and engineering sectors, most sophisticated technical skills and technology for pollution control, remediation, monitoring, and analysis are imported.

Water and Wastewater

This sub-sector provides the most opportunities for environmental technologies coming from the United States. Overall, the water infrastructure industry is expected to grow 7 percent annually between 2017 and 2026. In addition to large-scale wastewater treatment plant projects, there is also a substantial market for small and custom wastewater treatment and reuse solutions, septage management, and space-saving techniques such as advanced trenchless technologies.

Currently, water supply in Vietnam meets only about 70 percent of demand, with a relatively high water-loss rate (about 30 percent).  The country has few centralized wastewater treatment plants, and about three-quarters of its industrial wastewater is discharged into the environment without proper treatment. 

Vietnam has significant potential for large-scale water treatment facilities. Rapid industrialization throughout Vietnam is polluting the country’s water supply at an increasing rate and reducing the availability of potable water.

The effects of climate change and urbanization in Vietnam will also drive investment in water infrastructure. Many upcoming water utility projects are being planned under PPP frameworks, which will generate opportunities for foreign enterprises that have experience in water treatment technologies.

The government has urged Ho Chi Minh City and the Mekong Delta provinces to build and upgrade drainage systems, pumping stations, and treatment plants over the next five years, as drought, salinity and severe flooding have become urgent issues for the region, (More than 60 percent of Ho Chi Minh City lies less than 1.5 meters above sea level and is prone to tidal flooding).

Reliance on Official Development Assistance (ODA)

For over a decade, Vietnam has relied heavily on ODA from international donors for infrastructure and environmental projects. The country received USD 45 billion of ODA funds between 2005 and 2015. The World Bank stopped offering low or zero interest rate lending to Vietnam in July 2017 because it reached middle-income status in 2009. The Asian Development Bank (ADB) also halted concessional lending to Vietnam as of January 2019. Losing such preferential loan sources may require Vietnam to finance large projects differently.   

We note the high capital and technological requirements for advanced water projects will require the involvement of international firms, generating new opportunities for U.S. environmental technology companies in Vietnam.

Over the past 20 years, Japan, Denmark, Finland, Holland, Australia, Germany, and France have been the most active countries in financing projects in the water sector. Government grants from these countries have been used to finance feasibility studies and master plans for environmental improvements and pollution prevention in Vietnam. Companies from these countries are often well positioned to win the design contracts and subsequent engineering and equipment contracts. As is the case in numerous industries in Vietnam, U.S. companies are playing “catch-up” in the environmental technologies and services market in Vietnam.

Air Pollution

Vietnam is struggling with alarming air pollution.  According to the Yale 2019 Environmental Performance Index (EPI), Vietnam ranks 141th out of 180 countries in terms of air quality and modest biodiversity protection (with 180 being the worst possible performance).  Its two biggest cities, Hanoi and Ho Chi Minh City, are now among the top 15 most polluted cities in Southeast Asia.

Fine particulate matter (PM2.5) raises specific concerns in Vietnam. In 2019, Hanoi had only eight days with PM2.5 lower than the national standard of 50 micrograms per cubic meter (µg/m3). Meanwhile, the air quality in Ho Chi Minh City only experienced 36 days below the standard. For the remaining days of the year, over ten million people in these cities were exposed to heavily polluted air.

The primary sources of urban air pollution are transportation, industrial activities, construction, agriculture and handicraft production, and poor waste management practices, according to MONRE. 

Vietnam passed a National Action Plan on Air Quality Management in 2016 to manage and minimize air pollution. The Plan includes stricter regulations on new vehicle emission standards, better traffic control, enforcement of dust management measures for construction sites and transporting trucks, enhanced monitoring of industrial emissions, and bans on charcoal stove use in cities. While these measures could help partially address Vietnam’s pollution, long-term national policies and stronger enforcement of existing policies are urgently needed.

Industrial Air Pollution

The National Action Plan on Air Quality Management Plan includes a 20 percent reduction target for NOx, SOx, and particulate matter emitted by cement, chemicals, fertilizer, and petroleum production facilities.  Separately, a draft National Technical Regulation on Emissions for the Steel Industry is in the works. Vietnam’s 2014 Environmental Law (55/2014/QH13) also contains air quality management requirements, including point source registration, emissions inventory and installation of continuous emission monitoring systems for the biggest stationary source emitters. Improving air pollution control also will require industrial parks to install emissions treatment systems.  This increasing regulatory stringency is likely to drive growth in the air quality management market and provide opportunities for U.S solution providers, especially in industrial sectors.

Solid Waste/Municipal Waste

Solid waste generation in Vietnam is growing on pace with its urbanizing population and economy. However, most solid waste is still inadequately managed. According to MONRE, most of the country’s solid waste (73.5 percent) is deposited in open dump sites. Over 23 million tons of household waste and seven million tons of industrial solid waste are discharged into the environment each day in Vietnam. There are presently 458 dump sites and 337 of them do not meet sanitation standards.

Technologies currently in use include incinerators, combined incineration and composting, and most commonly, composting combined with landfills. Domestic manufacturers produce trash receptacles, while trucks and sorting equipment are imported.

Market Opportunities

Products from the U.S., Europe, Japan and Australia are preferred over imports from other Asian countries because they are perceived to be of higher quality and more durable.  In general, products from the United States are highly regarded for their quality. The major hurdles to overcome in this market, however, are the initial cost of the product and service support.

Key Technologies in Demand in Each Sub-sector:

Industrial Air Pollution Reduction:

  • Fenceline monitoring equipment
  • Ambient air quality monitoring equipment
  • Source emission measurement technologies
  • Urea to ammonia reagent systems
  • Continuous emissions monitoring equipment
  • Wet/dry scrubbers (particularly systems that remove multiple pollutants)
  • Carbon injection systems (for reduction in mercury and organics)
  • Particulate matter control systems (particularly new bagging systems)
  • NOx, mercury, CO₂ and particulate matter monitoring and continuous monitoring systems
  • Selective non-catalytic reduction controls
  • Oxygen enrichment, fuel injection and other efficient combustion technologies
  • Innovative specialty cements
  • Mixing technologies
  • Pumping and fluid handling equipment
  • Engineering and plant design
  • Leak detection equipment
  • Alternative fuel technologies used to fire cement kilns

Power Plant Emissions Reduction:

  • Particulate matter control systems (particularly bagging systems)
  • Flue gas desulfurization equipment
  • Activated carbon injection technologies
  • Inspection, adjustment, maintenance and repair services
  • Selective catalytic and non-catalytic reduction technologies
  • Electrostatic precipitators (both wet and dry)

Mobile Source Emission Reduction:

  • Emission control technologies for motor vehicles and non-road (diesel) vehicles and machinery

Municipal Wastewater Treatment:

  • Waste handling equipment
  • Engineering, procurement and construction services
  • Advanced filtration
  • Membrane filtration
  • Waste to energy technology
  • Anaerobic digestion
  • Nitrification
  • Biological denitrification
  • Monitoring equipment
  • Testing equipment
  • Air flotation

Industrial Wastewater:

  • Engineering, procurement and construction services
  • Operations services
  • Waste to energy technology
  • Testing equipment
  • Water drainage and wastewater treatment systems

Drinking Water and Process and Produced Water:

  • Engineering and design services
  • Monitoring equipment
  • Non-revenue water control software
  • Low-loss distribution equipment
  • Storage equipment
  • Advanced filtration
  • Membrane filtration
  • Reverse osmosis
  • UV disinfection
  • Ion exchange technology
  • Advanced filtration
  • Secondary wastewater treatment
  • Sludge treatment technologies
  • Reuse technologies

Municipal Solid Waste:

  • Waste handling equipment
  • Waste treatment technologies
  • Waste-to-energy systems
  • Gasification, pyrolysis and incineration technologies
  • Waste management systems design expertise
  • Landfill design and engineering

Industrial, Hazardous and Medical Waste Management:

  • Waste handling equipment
  • Waste treatment technologies
  • Brownfield site remediation design and equipment
  • Soil contamination testing and monitoring equipment
  • Hazardous waste handling equipment
  • Hazardous waste treatment technologies
  • Brownfield site remediation design and equipment
  • Hospital and medical grade incinerators
  • Industrial autoclaves

Environmental Consulting and Engineering:

  • Environmental Impact Assessment (EIA)

Resources

The following websites may be valuable resources for U.S. companies interested in exploring business development opportunities in Vietnam’s environmental technology industry.

For more information please contact:

  • Nam Tran, Commercial Specialist

U.S. Consulate General in HCMC

E-mail: Nam.Tran@trade.gov