Information on emission reduction

Managing plastic as a resource provides a significant source of revenue

Managing plastic as a resource provides a significant source of revenue

Our country's economy wastes 75% of the material value of plastic, equivalent to 2,2-2,9 billion USD per year, a new report by the World Bank Group (WBG) revealed.

Managing used plastic as a resource will bring significant economic benefits, promoting a circular economy in Vietnam, creating opportunities for the private sector to participate in addressing plastic pollution, according to Report published on September 29 by the International Finance Corporation (IFC) - a member of the WBG.

The report "Market Research for Vietnam - Opportunities and barriers for plastic circularity" said that plastic is commonly used in many industries in Vietnam, including packaging, consumer goods, electricity electronics, automobiles, aviation, textiles, and agriculture. In 2019, Vietnam's plastic industry produced 8,89 million tons of products, and contributed an estimated 17,5 billion USD to the national economy, or equivalent to 6,7% of GDP.

However, only 33% of the 3,9 million tons of commonly used plastics discharged annually in Vietnam are recovered and recycled, the report said.

The problem of plastic pollution

Globally, up to 50% of ocean plastic waste comes from single-use or short-term packaging. The Covid-19 pandemic has made the situation worse due to a sudden increase in the consumption of masks, disinfectant solutions in plastic bottles, and packaging for online orders.

The cost of plastic packaging's impact on the external environment after use, plus the costs associated with greenhouse gas emissions during plastic production, is conservatively estimated at $40 billion annually. year, even higher than the total profit of the plastic packaging industry.

Each year, $80-120 billion worth of plastic packaging is lost from the global economy due to lack of recycling and suboptimal value creation even with recycling.

In Vietnam, IFC research estimates that up to 2,62 million tons of plastic are thrown away each year, that is, not recycled, leading to wasting 75% of the material value of plastic - equivalent to 2,2 billion to 2,9 billion USD per year. Details are in the following chart:

All these factors have contributed to increased global awareness of plastic waste management. At the same time, concerns about plastic pollution have been well recognized by Vietnamese consumers.

“Rapid urbanization and an expanding middle class have significantly increased consumption of plastic products and packaging, making emerging markets in the region including Vietnam a hotspot for hot on plastic pollution," said Ms. Carolyn Turk, World Bank Country Director in Vietnam.

“However, investment in waste management infrastructure has not yet kept up with the rate of waste discharge. The public and private sectors need to work together to solve this complex economic, environmental and social problem, while promoting policies and increasing investment to help fully exploit the value of materials. plastic,” Ms. Turk commented.

The importance of a circular economy

The report shows that managing used plastic as a resource will bring significant economic benefits, helping to scale up recycling efforts and other efforts to promote plastic circularity, support development sustainable economic development.

“A circular economy is crucial for Vietnam to achieve its low carbon growth goals. Plastic recycling not only solves the problem of plastic pollution but also helps reduce greenhouse gas emissions and save valuable raw materials,” said Mr. Kyle Kelhofer, IFC Country Director for Vietnam, Cambodia, and Laos, comments.

“Improving the economic benefits of plastic recycling will help mobilize greater private sector investment to tackle the threat of plastic pollution, while also supporting key industries such as tourism, shipping and fisheries, which are being severely affected," Mr. Kelhofer said.

Recycling is a key lever that creates investment opportunities for the private sector to divert large volumes of plastic waste away from landfills, and Vietnam's long coastline.

The study proposes short- and long-term solutions to increase domestic demand for recycled plastics and expand the scale of the domestic recycling industry by improving the favorable environment for private sector investment. core.

Specifically, the study recommends strengthening waste management capacity, establishing “recycled content targets” for products commonly available to consumers, and requiring mandatory implementation of standards. “designed for recycling” standards for plastic products, especially for packaging, and many other recommendations.

Both short- and long-term interventions can strengthen the enabling environment, improve local demand for recycled plastics, and help scale up the domestic recycling industry by creating opportunities. investment in the private sector.

Targeted interventions to strengthen solid waste management infrastructure and improve operations in Vietnam are necessary improvements to manage municipal solid waste more effectively while transitioning from the current linear model, which is collecting waste at the end of its life cycle and disposing it in landfill, to a circular economy of plastics.

Implementing recommendations focused on plastics circularity could also help improve capacity and reduce capital costs for future non-landfill solid waste management options (e.g., waste-derived fuels) by only treating waste that cannot be recovered, recycled, or upcycled for value recovery.

Private sector opportunities

Although aspects of new reuse, refilling, and distribution models of the plastics circular economy have been evaluated, this research primarily focuses on plastics recycling, which is the segment where the private sector There are many large-scale investment opportunities to address plastic pollution.

The conclusion of this study is that recycling, especially for high-value rigid plastics, is a key lever for large-scale, impactful private sector investment opportunities to shift Large volumes of plastic waste leave Vietnam's waste dumps, landfills, and long coastline.

Decentralized recycling solutions close to waste sources can help accelerate the transition towards a circular economy by managing waste as a valuable resource, growing markets domestic market for secondary materials, and take advantage of the informal sector in Vietnam.

New refill/reuse and distribution models were briefly reviewed, but global brands are not currently focusing on these circular economy models in Vietnam due to challenges such as high costs more, logistics challenges, and local consumer preferences.

This report presents policy options to support the adoption of reuse and refill models in the future. In addition, the World Bank is conducting an analysis to provide a basis for identifying the top 10 priority plastic products to target for policies and investments in Vietnam. This analysis will support the government’s advice on policies to address the targeted plastic products.

The report notes that the Vietnamese Government encourages private sector participation to support efforts to achieve ambitious national plastic waste management goals.

Much of the country's recycling occurs separately from the municipal solid waste management system through upstream diversion, carried out directly by the informal sector, including scavengers, collectors , purchasing facilities, and scrap collection points, leading to a parallel economy for the collection and sale of recyclable scrap.

There is a need to transition from the current linear model, which collects waste at the end of its life cycle and disposes of it in landfill, to a circular economy of plastics. 

Additionally, this study identifies the current status of the domestic plastic waste recycling industry, including supply and demand, market opportunities, drivers and barriers to growth, and recommends actions that the government need to be done.

This study recommends eight thematic interventions and 29 actions so that Vietnam can unlock significantly more material value through plastic recycling. Each intervention has the potential to release a material value of 0,8-1,8 billion USD per year. However, these interventions may overlap, so the total value that can be released will be less than the sum of the values ​​of the individual interventions. In theory, the maximum value that can be unlocked could be as much as $2,2 – 2,9 billion per year if certain structural and market failures are addressed effectively and promptly.

IFC’s “Market Study for Vietnam – Opportunities and barriers to plastic circularity” uses a plastics value chain approach to identify how common plastics are produced, used, and management in Vietnam and encourage increased classification, collection, and recycling of waste to take full advantage of the value of plastic materials.

The study was conducted with the support of PROBLUE – a multilateral trust fund managed by the World Bank (WB), which promotes sustainable and harmonized development of marine and coastal resources for the protection oceans.

The research is part of WBG efforts to address plastic pollution in the East Asia and Pacific region.

According to the Center for People and Nature

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