Vietnam - Country Commercial Guide
Environmental Technology
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Vietnam’s rapid growth and industrialization have caused negative impacts on the environment and natural assets. Vietnam is one of the world’s five most vulnerable countries to climate change. Typhoons, floods, droughts, and landslides frequently threaten a high proportion of the country’s population and economic assets concentrated along its long, densely populated coast.

According to the World Bank, from the beginning of its market transformation, Vietnam has emerged as one of the world’s fastest-growing per-capita greenhouse gas emitters, although Vietnam is a modest greenhouse gas (GHG) emitter, GHG emissions have multiplied fivefold in the last 20 years. The energy sector is responsible for more than half of the country’s GHG emissions, followed by agriculture, industrial processes, and waste. Water demand continues to increase, while water productivity is low, about 12% of global benchmarks indicated by a World Bank report on water. Unsustainable exploitation of natural assets such as sand, fisheries, and timber negatively affect prospects for long-term growth. Vietnam’s population and economy are also highly vulnerable to climate impacts.

Urbanization and strong economic and population growth are also raising concerns about the rapid depletion of natural resources and environmental threats 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 ten in-land rivers, and the Mekong River is one of them. Vietnam is among the ten countries most affected by air pollution worldwide. Water pollution has high costs on the productivity of key sectors and human health.

At the UN Climate Change Conference in Glasgow in November 2021 (COP26), Vietnam’s Prime Minister made several commitments, including an ambitious target of reducing emissions to Net Zero by 2050. Vietnam’s increased attention to climate change and the environment reflects the growing economic costs of resource depletion and climate impacts, which have already started to harm trade and investment— two key drivers of the nation’s robust growth and job creation in recent decades. GVN has released National Action Plans in coping with the increasing public interest in environmental quality. The national action plan covers different areas related to air quality, water conservation, and plastic waste pollution.

Institutional Framework and Policies

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 which issues regulations, standards, and permits and performs inspections. One of the main tasks of MONRE is planning for the use of national land, and it is also responsible for education and awareness of national land laws and regulations. Also, under the Law on Environmental Protection, MONRE is responsible for air pollution, water resource management, and waste problems. In addition, it has recently taken the lead in implementing measures on international environmental issues such as greenhouse gas reduction, ozone-depleting substances, and the Stockholm Convention.

The Ministry of Construction is tasked for formulating the Water Supply and Sewerage Law. The development of the Law on Water Supply and Sewerage is a state management tool for promoting the construction and development of a more synchronous and modern strategic infrastructure system for industry.

The Ministry of Public Security (MOPS) conducts investigations and issues sanctions to ensure the enforcement of environmental protection laws and regulations. In contrast, 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 managing environmental protection activities in the local areas.

Ministry of Construction (MOC) has primary responsibility for formulating the Law on Water Supply and Sewerage. The law will be a state management tool for promoting the construction and development of a more modern strategic infrastructure system. The MOC’s bill in 2021 promotes more private sector involvement to develop projects for state water management. In addition, the new law on PPPs, which came into effect on January 1, 2021, also includes water infrastructure, and will play a crucial role in improving the regulatory framework for investments. These efforts may offer opportunities for more private investment in water infrastructure.

Vietnam announced at the 2021 United Nations Climate Change Conference (COP26) a target of net zero carbon emissions (GHG) by 2050. To align with this target, Vietnam’s National Assembly passed the Revised Law on Environmental Protection in May 2021. The new law will replace the 2014 version, give communities a more prominent role in conservation, and impose responsibilities on corporations. The law, went into effect in January 2022 and 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.

The Government of Vietnam released Decree 06 on January 7, 2022, providing regulations on the reduction of GHG emissions and protecting the ozone layer. Per Decree 06, the government is currently drafting the National Climate Change Strategy until 2050 and the National Methane Emissions Inventory 2020, as well as designing an Emissions Trading System.

In April 2022, the GVN issued Decision 450/QD-TTg National Strategy for Environmental Protection to 2030, vision to 2050 aims to prevent increasing pollution and environmental degradation, solve urgent environmental problems, gradually improve, and restore environment quality; ensure environmental security, advance to circular and green economy with low carbon emissions.

National Strategy on Integrated Solid Waste Management by 2025, vision to 2050 aims at development and deployment of the scheme for improvement of solid waste management in Vietnam. This Strategy identifies the specific targets for domestic waste in urban areas.

Leading Sub-Sectors

Most of the revenue and employment for environmental goods and services in Vietnam can be found in water purification and delivery services, 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, advanced 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.

Water Resource: Severe and increasingly unpredictable weather patterns due to climate change will place a greater level of stress on Vietnam’s existing water resources, especially during the dry season when water flows are lower. In 2019, water levels in the Mekong River fell to their lowest in more than 100 years, disrupting water supplies to farms and factories. In 2022, low water levels in the Red River led to energy shortages in Northern Vietnam. According to the International Water Resources Associations, Vietnam faces a shortage of water, with water output of less than 4,000 cubic meters (cu m) per head per annum.

Industry Structure: In Vietnam, water utilities that run water distribution systems are under the management of provincial authorities, thereby having a monopoly on water distribution Local water utility companies in their ongoing transformation to become autonomous, service-oriented organizations. The country’s water sector has also achieved impressive gains in commercial transformation, equitization, and operational expansion. According to Vietnam Water Sewerage Association (VWSA), the operators of water treatment plants have increased their capacity by 6% to approximately 11.5 million cubic meters per day. Forecasted real growth in Vietnam’s water infrastructure is at average 6.8% annually. 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.

Water supply infrastructure

Vietnam’s water infrastructure needs are diverse, ranging from water supply infrastructure to wastewater management systems and facilities, to anti-flood infrastructure. Existing water supply and treatment facilities are inadequate and face increasing strain from the growing populations of many cities, alongside increasing water demand from both the industrial and agricultural sectors.

As the economy continues to expand and industrialize, water demand will rise and form a larger proportion of overall water withdrawal over the coming years. Water security and access to clean water has become an increasingly important issue in recent years. This points to a need to invest in more robust water supply infrastructure and to diversify the country’s water sources.

We expect more projects to be announced over the coming years as the regulatory and operating environment for water infrastructure projects improves. The prime minister issued a directive in August 2020 to call for improving legal frameworks, new investment models, and new operation and management technologies to ensure sufficient clean water. Given the country’s large investment needs, we expect foreign companies to form a growing proportion of the water sector competitive landscape. Water suppliers are operating more efficiently thanks to regular system upgrades and the installation of advanced water leak detectors. Water loss ratios are expected to fall to 16.5% this year, from 17.5% in 2022 and raising the water supplier’s profit margin.

According to the Ministry of Construction, Vietnam had 750 water plants in 2022 with an aggregate capacity of 11.2 million cubic meters per day. On the demand side, household consumption rose by 5% year-by-year and industrial consumption by about 8%, against an annual rise of 3% in water prices.

Wastewater treatment infrastructure

In Vietnam, wastewater treatment collection rate is low, in urban area, the rate is at only 12.5-15%. Wastewater is almost untreated and discharged directly into canals. According to the Technical Infrastructure Department under the Ministry of Construction, the total capacity of 24 operating plants for centralized wastewater treatment is estimated to be about 670,000 cubic meters per day. According to the Ministry of Construction, the drainage system in Vietnamese urban areas is popularly a mixed drainage system, except for Thua Thien - Hue, Lam Dong, Binh Duong, Can Tho where they have the separate drainage system. The reasons for low drainage capacity of collecting excess water in Vietnam are due to the asynchrony and incompletion of urban drainage system development plan, with deteriorated sewer lines and uneven investment and construction through different regions in Vietnam. Furthermore, the concretization of canals and riversides have reduced water drainage, resulting in urban areas flooding.

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

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 with experience in water treatment technologies. Governmental policies encourage private investment, but the environment is unfriendly because of the government’s continued ownership of assets and considerable control over operations. Most wastewater treatment firms find it challenging to access financial funds, because the perceived risks to the investors remain too high.

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 in 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, the Government of Vietnam has not accepted new ODA to finance large projects.   

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 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. In 2022, Vietnam ranked 14th out of 118 countries with the most polluted air. 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 under Prime Minister’s Decision approving the national action plan on air quality management up to 2020, with a vision toward 2025 (No. 985a/QD-TTg) 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% reduction target for NOx, SOx, and particulate matter emitted by cement, chemicals, fertilizer, and petroleum production facilities. Separately, a draft of the 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 will also 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. Most solid waste is still inadequately managed. According to MONRE, most of the country’s solid waste (73.5%) 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.

Soil pollution

According to MONRE, land in every city in the country is now seriously polluted by waste generated from industrial projects, construction projects, and household activities. However, soil rehabilitation has not been performed for such seriously polluted land. State authorities do not have sufficient technology or experts to analyze pollution levels. In recent years, the awareness of soil contamination has gradually increased among Vietnamese people. A growing number of farmers are starting to use microbial fertilizers made from agricultural wastes, instead of chemical fertilizers or pesticides to avoid soil pollution. The farmers are calling on the government to introduce regulations that limit the use of chemical fertilizers and pesticides, and more comprehensive and stringent measures against soil pollution.

Market Opportunities

Until 2021, Vietnam has centralized only fifteen percent of its wastewater treatment system. The Government is encouraging privatizing the sector and prioritizing water collection, drainage, and wastewater treatment.

Investment projects in wastewater treatment and drainage works require significant capital while service prices are still low; subsequently, investors are indifferent to the field. Therefore, developing policies to encourage long-term investment and an open and transparent mechanism to select investors is necessary. With most of the wastewater treatment companies moving toward fully commercialization, the private sector is playing an increasing role in urban regions.

In terms of industrial wastewater treatment, with the rapid industrialization, the market is increasingly dominated by domestic companies or joint venture of domestic companies with foreign players, major water treatment companies included Envico, Envitech, Navitechco, Tam Nhin Xanh, SEEN Technologies Corp., Ecoba ENT, Huvis Water Vietnam, etc. In 2022, 50 wastewater treatment plants with a total design capacity of about 1.8 million cubic meters per day are planned and will be under different stages of development. Approximately 80% of plants are designed and built using activated sludge technology.

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

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)


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



  • Janice Tran, Commercial Specialist

U.S. Embassy in Hanoi