Market Study for Vietnam: Plastics Circularity Opportunities and Barriers

Plastics make a vital contribution to the Vietnamese economy. Plastics are commonly used in a wide range of industries in the country, including packaging, consumer goods, electronics, automotives, aviation, textiles, and agriculture. In 2019, Vietnam’s plastics industry produced 8.89 million tonnes of products, and the industry contributed an estimated US$17.5 billion to the national economy, representing 6.7 % of GDP.

However, mismanaged plastics waste has serious economic, environmental, and social consequences. Asia is responsible for more than 80 % of plastics leakages into marine environments, with eight out of the top 10 contributing countries from this region – with Vietnam ranking fourth globally, according to some estimates.

Recognizing that plastics pollution is a serious emerging issue, Vietnam has set ambitious national plastics waste management goals to combat the economic and environmental consequences of such waste nationally. This market study uses a plastics value chain approach to evaluate Vietnam’s plastics recycling industry and its role in supporting a circular economy. It identifies major challenges, market drivers and opportunities for scaling-up recycling efforts via targeted public and private sector interventions.

The key plastic resins assessed in this study are: Polyethylene Terephthalate (PET), Low Density Polyethylene (LDPE), High Density Polyethylene (HDPE) and Polypropylene (PP).

KEY FINDINGS

Vietnam recycled about 33% of key plastics resins in 2019.

About 75%  of the material value of the key plastics resins – approximately US$2.2 billion to US$2.9 billion per year – is lost in Vietnam when 2.62 million tonnes are disposed of annually rather than recycled into valuable materials.

Several structural challenges cause a market failure for plastics recycling:

• Lack of sustained local demand for recycled plastics across all key resins
• Gaps in domestic recycling capacities, inconsistent and at-risk supply from the informal sector and reliance on higher quality scrap imports
• Low quality recyclables due to a lack of “design for recycling” standards
• Lack of access to financing for recyclers
• Lack of a waste management system that prioritizes collection and disposal over recycling.

During the ongoing COVID-19 pandemic, these challenges have amplified in the form of declined supply to the recycling industry due to changes in consumption patterns and a significant reduction in demand for recycled products resulting from low oil prices and the economic slowdown.

RECOMMENDED INTERVENTIONS AND ACTIONS