Extracting the most in circular economy value

09:54 | 25/04/2019
Vietnam’s initiative to build a circular economy, aimed at tackling pollution and achieving more sustainable development by reusing and recycling defunct products, has attracted the participation of several foreign businesses. However, for this new economic model to gather more corporate participation, the government needs to create a market for trading secondary materials. Thanh Thu reports.
extracting the most in circular economy value
As the disastrous effects of climate change are increasingly felt across the world, building out a circular economy is becoming a burning need, Photo: Le Toan

Last week, a memorandum of understanding (MoU) to build the first road in Vietnam using recycled plastics at the DEEP C industrial complex in the northern port city of Haiphong was signed between US-backed Dow Group and DEEP C – a joint venture between Belgium’s Rent-A-Port and the Haiphong People’s Committee.

The project aims to divert post-use flexible packaging from becoming litter or entering a landfill, while also creating more durable, longer-lasting roads.

The initial one-kilometre road, set for completion in September, will divert nearly four metric tonnes of flexible packaging, the equivalent of roughly one million pieces of flexible wrappers which will be supplied by Dow customers in the surrounding areas. Upon completion, the road will be tested by Vietnam Maritime University prior to expansion throughout the complex.

“Dow has a strong commitment to ending plastic waste, in part by finding innovative ways to transform it into new products,” said Dow Vietnam general director Ekkasit Lakkananithiphan. “We have developed more than 90km of asphalt roads containing plastic waste in India, Indonesia, Thailand, and the United States, which provides us with foundational knowledge that we can apply for this initiative in Vietnam.”

The scheme points towards the advancement of a circular economy in Vietnam through the development of roads made with recyclable materials, while developing better end markets for plastic waste, according to the Vietnam Business Council for Sustainable Development (VBCSD).

Circular economy in need

Vietnam is developing quickly, gradually leaving its low-income past behind and becoming a middle-income country. However, this rapid economic growth is accompanied by increasing pressure on the environment. Waste generated by industrial activities and urbanisation is a serious issue for Vietnam. In addition to increasing pollution, it has forced the country to transform its production into cleaner, safer, and more sustainable methods in order to protect both the environment and the population’s health.

“In this context, a circular economy – a relatively new concept in Vietnam – could be a good solution,” vice chairman of the VBCSD, Nguyen Quang Vinh told VIR.

According to the experts, in a circular economy, waste from factories becomes a valuable input to other processes. Also, rather than disposing of defunct products, they are repaired, reused or upgraded.

Circular economic strategies could also result in considerable cost savings, increasing the competitiveness of the nation’s industry while delivering net benefits in terms of job opportunities.

“This concept is an essential solution for Vietnam to continue serving the growing energy and resource demands in the domestic market, all the while decreasing pressure from waste, pollution, and climate change,” added Vinh, who is also general secretary of the Vietnam Chamber of Industry and Commerce.

According to the Ministry of Natural Resources and Environment, the volume of solid waste discharged annually by industrial zones in Vietnam is about 8.1 million tonnes, excluding 17 million tonnes per year of ash, slag, and gypsum discharged by thermal power plants, and chemical and fertiliser usage activities.

Meanwhile, the demand for recycled waste has increased annually by 10-20 per cent, showing the great potential of the recycling industry in Vietnam.

Foreign business participation

Last year, the VBCSD and three foreign companies – Coca-Cola, Dow Chemical, and Unilever – jointly signed an MoU to implement the council’s Zero Waste to Nature initiative, the first of its kind in Vietnam.

This initiative is part of Vietnam’s programme on supporting enterprises to realise the country’s circular economy. The programme includes the establishment of a centre for assisting enterprises in this endeavour.

The centre focuses on suggesting policies, incentives, and mechanisms to the government to build up secondary material markets, introduce good practices of global enterprises to local businesses, and then implement initiatives based on the public-private partnership (PPP) format.

The programme, primarily targeting plastic waste, is now being piloted in Ho Chi Minh City, and will be expanded to Hanoi and Danang. Related activities will also target various industries such as steel, cement, and textiles.

Do Quang Hung, first deputy general director of DEEP C HP I & III/Dinh Vu Industrial Zone JSC, highly values the programme and its co-operation with Dow. “DEEP C is a pioneer in building and converting industrial zones into eco-industrial parks,” Hung said. “One of the main goals under the eco-park initiative is promoting industrial symbiosis to mitigate and decrease industrial waste.”

The project that DEEP C co-operates in with Dow will engage local governments, waste collectors, and the plastic industry value chain to tackle the marine debris and plastic waste issue in Vietnam as well as develop better end markets for plastic waste, according to Vinh.

Vietnam is currently one of the top producers of plastic waste, with urban areas like Hanoi and Ho Chi Minh City seeing an estimated 80 tonnes of plastic waste entering the environment as litter each day.

Coca-Cola Vietnam has conducted several initiatives in regards to the circular economy. It has reduced the weight of its Dasani-branded plastic water bottles to only 12.15 from the initial 14.5 grammes, saving the firm millions of dollars in material costs. By 2030, Coca-Cola will collect and recycle all of the waste it produces in the form of bottles, cans, nylon, paper, and more.

In another case, Dutch-backed HEINEKEN also applies environmentally-friendly solutions to contribute to Vietnam’s circular economy. Le Thi Ngoc My, head of sustainability at HEINEKEN Vietnam, said that 99.01 per cent of waste and by-products at the company are reused and recycled, and four out of six of its breweries are fuelled 100 per cent with renewable energy. “All staff at HEINEKEN like the circular economy as it greatly benefits the entire society,” My said. “In our company, we never use plastic bottles to contain water. We encourage staff to use pencils instead of ball-point pens, which tend to cause environmental pollution.”

According to industry experts, plastics of ball-point pens would need hundreds of years to completely decompose.

A secondary material market

However, Vinh of the VBSDC told VIR that for the circular economy to develop with the participation of many enterprises, the government needs to develop a market for secondary materials. Secondary materials refer to manufactured materials that have already been used at least once, and is to be used again after recycling.

“Currently, there is no specific legal framework for such materials, and enterprises have to compete strongly and even unhealthily to purchase materials,” Vinh said. “If there was a legal framework, like in many developed nations, more and more enterprises would join hands with the government in developing a circular economy via PPP projects,” Vinh said.

Hung of DEEP C told VIR that over the past few years, businesses have traded in secondary materials without specific regulations, which have driven up prices “irrationally” and caused “unhealthy competition” among them.

“Thus, we await a specific legal framework for trading in secondary materials,” he said. “This will help boost the development of a circular economy.”

According to Andrew Mangan, managing director of the US Business Council for Sustainable Development, it is necessary for Vietnam to create such a marketplace.

“A reuse and recycle material-trading system will help direct Vietnam’s booming manufacturing industries towards the circular economy,” he said. “It is necessary to establish an active and vibrant materials marketplace programme that serves as a foundation for well-informed, systematic industrial material reuse and recycling. The initial focus is on plastic and paper supply webs.”

Mangan added that, “Success will be measured by the numbers of small, medium, and large businesses, non-profits, and public entities participating in the programme and the validation of a sustainable business model.”

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