Developing a legal framework on sandbox for cicular economy in Viet Nam

On 4 August 2023 in Hanoi, the draft decree on regulatory sandbox for circular economy (CE) development in Viet Nam was discussed at a consultation workshop held by the Central Institute for Economic Management (CIEM) in collaboration with GIZ. The event brought together experts from ministries and government agencies, research institutions, international organisations, and embassies, to provide feedback and recommendations on the draft.

The draft decree stipulates a trial mechanism support pilot projects for circular economy development in Vietnam by setting incentives through a series of policies, including industrial zones and economic zones; Green classification; Technology consulting and technology transfer; Green credits, green bonds; Human resource development; Land; Industrial zones and economic zones. It proposes the following sectors: Agriculture, forestry & aquaculture; Industry; Energy; and construction material.

At the workshop, GIZ’s Mira Nagy shared German experience in CE modellation, which shows that CE offers great potential for climate and environmental protection and resource security as well as societal wealth. She remarked: “The sectors which are to be addressed by the Circular Economy Sandbox in Viet Nam, also emerge as key in developing a CE in Germany, such as construction, vehicles and batteries, electronic appliances, and food. The Sandbox further resonates with some of the recommended measures such as financing circular measures, setting incentives for businesses, providing funding for R&D, as well as strengthening local value chains. In addition, the modellation approach can inform research efforts for CE development in Viet Nam.”

Experts stressed the importance of, among others, developing the set of criteria to select CE projects and businesses to join the Sandbox, in line with relevant national and international standards. Further discussions circled around the inclusion of industrial clusters where the majority of recycling business in Viet Nam are registered, and the consideration of circular business models that focus on waste prevention through e.g., product-as-a-service business models or the development of alternative materials. Experts further remarked to pay closer attention to the potential socio-economic potentials of the Sandbox, and unexpected effects of promoting new technologies.

Based on the outcomes of this consultation session, CIEM will update the draft decree and submit it to the Ministry of Planning and Investment. Further consultation workshops will be organised later this year, before MPI could finalise the draft Decree and submit it to the Government by the end of 2023.

The workshop was part of the project “Go Circular” implemented by GIZ on behalf of the Federal Ministry of Economic Cooperation and Development of Germany. Go Circular supports the transition to a circular economy at global level and in three partner countries, including Viet Nam, Columbia and Ghana. The project supports stakeholders in developing innovative circular economy solutions within value chains, strengthening mechanisms for scaling up tested approaches, and global action via alliances. Priority measures in Viet Nam are promoting innovative circular business models and providing advice on implementing national strategies for the circular economy.