Overview

Typhoons, floods, droughts, and landslides frequently threaten a high proportion of Vietnam’s population and economic assets concentrated along its long, densely populated coast.

On March 1, 2025, Vietnam officially merged the Ministry of Natural Resources and Environment (MONRE) with the Ministry of Agriculture and Rural Development (MARD) to form the new Ministry of Agriculture and Environment (MAE). This restructuring consolidated responsibilities for land, water, forestry, fisheries, environmental protection, climate change, and disaster management under a single ministry, streamlining oversight and improving coordination across agriculture and environmental sectors.

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. Unsustainable exploitation of natural assets such as sand, fisheries, and timber negatively affects 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 inland rivers, and the Mekong River is one of them. Vietnam is among the ten countries most affected by air pollution worldwide. Water pollution also 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 attaining a carbon-neutral economy 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. The Government of Vietnam has released National Action Plans to address 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 Agriculture and Environment (MAE), is the main body in the Vietnamese Government that issues regulations, standards, and permits and performs inspections. One of the main tasks of MAE 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, MAE 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 (MOC) is responsible for drafting the Law on Water Supply and Sewerage, which is intended to serve as a key state management tool to promote the construction and development of a more modern and integrated strategic infrastructure system for the water sector. The proposed law aims to strengthen the regulatory framework, encourage greater private sector participation, and support the modernization of water supply and wastewater services. Notably, the MOC’s 2021 draft bill emphasizes the need to attract private investment in water infrastructure projects. Complementing this, the Law on Public-Private Partnerships (PPPs), effective from January 1, 2021, includes provisions for water infrastructure development, creating additional opportunities for private sector engagement and investment in this sector.

The Ministry of Public Security (MPS) 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 Agriculture and Environment at municipal and provincial levels are responsible for managing environmental protection activities in the local areas. 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, requiring factory operators to use the best available technologies to control pollution and limit environmental impacts and highlighting the need to protect environments with residential communities.

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

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

Leading Sub-sectors

Environmental Technologies Sector

Water purification and delivery systems, wastewater treatment, and emissions control remain the strongest-performing segments for U.S. companies in Vietnam’s environmental market. These areas address critical national needs–clean water access, safe waste management, and air quality–while aligning with Vietnam’s regulatory priorities and increasing urban and industrial demand. U.S. technologies are valued for their quality, durability, and ability to meet stringent environmental standards. However, high upfront costs and the need for strong local technical support can be barriers for some buyers.
Vietnam’s environmental sector is evolving rapidly. Success favors companies that offer not only innovation but also genuine partnership. U.S. firms are encouraged to focus on high-tech solutions where local capacity remains limited and to build long-term value through technical transfer, workforce training, and after-sales service. Emphasizing compliance, reliability, and lifecycle performance will help position U.S. solutions as trusted tools to meet Vietnam’s environmental and regulatory goals.

Key trends:

• Rising Demand: The water purifier market is expected to double by 2032, driven by factors such as urbanization, water contamination, and public health concerns.
• Smart and Sustainable Solutions: There is an increasing demand for IoT-enabled monitoring systems, advanced filtration technologies, and energy-efficient solutions.
• Government Investment: Significant government initiatives and public-private partnerships (PPPs) are focusing on upgrading water infrastructure and reducing water loss.
• Decentralized and Modular Systems: There is a growing need for both large-scale and customized small-scale solutions to meet the demands of urban and rural areas.

Industry Structure

Water utilities in Vietnam are managed by provincial authorities and hold exclusive rights to distribute water locally. These utilities are transitioning into more independent, service-oriented businesses focused on customer needs and operational efficiency. There is a strong push to improve commercial performance and deliver better service.

The water sector is making steady gains in partial privatization, network expansion, and digital transformation. Adoption of new management tools is helping utilities operate more transparently and effectively.

By 2024, Vietnam’s water treatment capacity rose to about 12.2 million cubic meters per day, up from 11.5 million cubic meters in 2022–an average annual growth rate of 6%.

Both large projects and smaller, tailored solutions are in demand. The market is looking for decentralized systems, advanced septage management, and innovative trenchless technologies that can maximize efficiency and use urban space effectively.

Water Supply Infrastructure

Urbanization and industrialization are putting pressure on Vietnam’s water supply and treatment infrastructure. Population growth in major cities, coupled with rising industrial and agricultural demand, continues to outpace the capacity of existing systems. Ensuring water security and access to clean water has become a central policy priority. The government is accelerating investment in resilient and diversified water supply systems, including surface water, groundwater, and desalination sources.

Ongoing regulatory reforms and improved investment frameworks are enabling a new wave of projects, with foreign companies playing an expanding role in the competitive landscape. Utilities are also intensifying efforts to reduce non-revenue water through infrastructure upgrades and advanced leak detection technologies. The national water loss ratio is projected to decline to 15.8% by 2025, from 17.5% in 2022.
As of 2024, Vietnam had more than 780 operating water plants. Household water consumption rose by 4.8% year-on-year, while industrial usage increased by 8.2%. Water tariffs also saw a moderate rise, averaging 3% across the country.

Wastewater Treatment: Market Dynamics

Urban Wastewater Treatment

Centralized wastewater treatment in Vietnam remains underdeveloped, with only an estimated 16% of urban wastewater collected and treated as of 2024. To address growing environmental and public health concerns, the government is prioritizing sector reform–focusing on improved wastewater collection, drainage, and treatment infrastructure.

Authorities are encouraging private investment through regulatory reforms, clearer project pipelines, and more transparent investor selection processes. Public-private partnership (PPP) models are gaining traction, though uptake is still limited by high capital costs, low service tariffs, and long investment horizons. As utilities shift toward commercialized operations, more private players–domestic and foreign–are entering the market, particularly in urban centers.

Industrial Wastewater Treatment

Industrial zones and export manufacturing areas are rapidly expanding, driving an urgent need for on-site and centralized wastewater treatment facilities. As of 2024, over 55 wastewater treatment plants were in various stages of development, with a combined capacity exceeding 2 million cubic meters per day. While about 80% of plants use activated sludge systems, the market is shifting toward high-efficiency technologies such as membrane-based (MBR), biofilm, and advanced biological treatment to meet stricter discharge standards and support water reuse.

The industrial wastewater segment is led by domestic firms and joint ventures, which typically offer end-to-end engineering, procurement, and construction (EPC) services. These companies often rely on imported high-tech components and are keen to partner with foreign suppliers offering reliable, compliant, and cost-effective solutions.

Outlook for U.S. Companies

• U.S. technologies are well-positioned in areas such as advanced treatment, automation, monitoring, and reuse systems.
• Emerging PPP frameworks and tightening environmental regulations are creating new market openings.
• Smart, modular, and decentralized solutions are particularly relevant for industrial zones and smaller municipalities.
   

Foreign investors should engage early in project timelines and consider partnerships with local firms to navigate regulatory processes and maximize market access.

Air Pollution

Vietnam’s air quality remains a major public health concern. In 2024, Hanoi and Ho Chi Minh City consistently ranked among Southeast Asia’s most polluted cities, with PM 2.5 levels frequently exceeding national and World Health Organization standards.

Main sources include transportation, industry, construction, and waste burning. The government is enforcing stricter vehicle and industrial emission standards, expanding air quality monitoring, and banning charcoal stoves in urban areas.
The National Action Plan on Air Quality Management targets a 20% reduction in nitrogen oxides (NOx), sulfur oxides (SOx), and particulate emissions from heavy industries by 2025. New regulations require continuous emission monitoring for major emitters and tighter controls on industrial parks.

These policies are driving demand for advanced monitoring and control technologies, offering opportunities for U.S. solution providers.

Product Preferences and Challenges

Products from the United States, Europe, Japan, and Australia are preferred for their quality and durability. U.S. solutions are especially valued in high-tech segments but face challenges from higher upfront costs and the need for robust local support and after-sales service.

Key Technologies in Demand

Table: Priority Technology Segments for U.S. Companies

What You Need to Know

• Private sector involvement is growing, especially in urban wastewater and industrial treatment.
• PPP models and new investment policies are opening the market, but investors seek clear, long-term incentives and risk mitigation.
• U.S. products and solutions are preferred for advanced applications, but price and after-sales support remain key to winning contracts.
• Demand is rising for smart, efficient, and sustainable technologies as Vietnam enforces stricter environmental standards and expands infrastructure.
• Historical reliance on Official Development Assistance (ODA).
   

Vietnam’s water sector has historically relied on ODA, but access to multilateral concessional ODA from the World Bank and Asian Development Bank has been reduced as the economy develops. Japan, Germany, France, and other countries remain active in providing bilateral grants and technical assistance, often positioning their companies for follow-on contracts. U.S. firms are gaining ground but still face strong competition from established players.

New large-scale projects increasingly require commercial financing or foreign direct investment. This shift creates more opportunities for international environmental technology providers, particularly those offering advanced solutions and project finance expertise.

Resources

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

• Ministry of Natural Resources and Environment (MONRE)
• Vietnam Environment Administration (VEA)
• World Bank (WB)
• Asian Development Bank (ADB)
• United States Agency for International Development 

For more information, please contact:

Nam Tran, Commercial Specialist, U.S. Consulate General in HCMC
E-mail: Nam.Tran@trade.gov  

Janice Tran, Commercial Specialist, U.S. Embassy in Hanoi
E-mail: Bich.Tran@trade.gov