EIP in Vietnam

EIP in Vietnam: An Initial Formation And Stable Development

The Ministry of Planning and Investment (MPI) has proposed a new Industrial Park Law to promote the development of large-scale Eco-Industrial Parks (EIPs) and attract quality investments. The proposal includes a series of incentives designed to support industrial park projects that are in line with Vietnam’s goals of industrialization, modernization, green infrastructure, digitalization and circular economy.

With the aim of promoting sustainable investment, the MPI is taking proactive steps to establish a comprehensive regulatory framework for EIPs. The current investment environment for industrial parks in Vietnam is hampered by complex and overlapping laws, regulations and procedures, posing a significant challenge to sustainable development. The management of these parks is particularly complex due to overlapping regulations and policies on land, construction and environmental issues.

The MPI is optimistic about the potential of the proposed legislation. It is seen as a set of experimental measures that could effectively tackle the current challenges and foster the development of EIPs. This potential is not just a set of measures, but a beacon of hope for the future of industrial parks in Vietnam, promising a more sustainable and efficient investment environment.

Overview of Vietnam’s industrial parks

Vietnam’s export sales heavily rely on its 416 industrial parks and over 1,000 industrial clusters, as highlighted in the MPI report. In recent years, foreign direct investment (FDI) has significantly boosted the growth of these parks and economic zones. FDI inflows in these areas constitute a substantial portion, ranging from 35% to 40%, of the total registered FDI in the country. Notably, the processing and manufacturing industry has seen 70% to 80% of its registered FDI projects concentrated in these industrial parks.

The MPI’s efforts in promoting Eco-Industrial Parks (EIP)

Despite their economic benefits, the expansion of industrial parks and increasing industrialized manufacturing in Vietnam create significant ecological risks and social challenges. Inadequacies persist in these parks’ services, social security, and industrial symbiosis between enterprises within an industrial park or between different parks.

Therefore, Vietnam is committed to transforming traditional industrial parks into green and eco-friendly zones that follow global sustainable development standards. With assistance from international experts and organizations, the Vietnamese government has successfully piloted several EIPs.

The development history/plan is presented below.

1. MPI & UNIDO: Pilot EIP projects phase (2015 to 2019)

From 2015 to 2019, the MPI piloted several EIP initiatives in three provinces, with technical assistance from the United Nations Industrial Development Organization (UNIDO) and funding from other international organizations. The three pilot EIP projects were:

  • Khanh Phu Industrial Park and Gian Khau Industrial Park in Ninh Binh
  • Hoa Khanh Industrial Park in Da Nang
  • Tra Noc Industrial Park 1 and 2 in Can Tho
EIP in Vietnam
Hoa Khanh IP

In Minister Dung’s view, innovation in these pilot zones has helped 72 businesses save 22,000 MWh of electricity, 600,000 m3 of water, 140 TJ of fossil fuel, 3,600 tonnes of chemicals and waste, and more than VND76 billion ($2.99 million) annually.
The private sector has also invested over VND207 billion ($10.62 million) in these eco-industrial parks, which will help reduce 32 kilotonnes of CO2 per annum.

2. Swiss Government Engagement: EIP Replication Phase (2020 to the present)

With the financial support of the Swiss Government, MPI is continuing its collaboration with UNIDO to replicate EIP models in Hai Phong, Dong Nai, and HCMC. By the end of May 2024, this joint collaboration had supported 90 enterprises implementing 899 viable solutions for resource-efficient and Cleaner Production (RECP) in the following industrial parks: Hiep Phuoc, HCMC; Amata, Dong Nai; Deep C (Dinh Vu), Hai Phong; and Hoa Khanh, Da Nang to be completed by the end of May 2024.

The MPI suggests implementing 62 industrial symbiosis and industrial-urban symbiosis solutions for three industrial parks (Hiep Phuoc, Amata, and Deep C) on a trial basis, with 18 cases of high feasibility. This will help optimize waste reuse and materialize the circular economy.

The Ministry has also worked with the Government to draft the legal framework for the effective implementation of the EIP model, which shall be embodied in Decree No. 35/2022/ND-CP, dated May 28, 2022, on the Management of Industrial Parks and Economic Zones. Decree No. 35/2022/ND-CP inherits and expands upon the regulations in Decree No. 82/2018/ND-CP by adding and completing regulations on:

  • Policies of support and cooperation in the development of EIPs
  • Criteria for identification
  • Incentives
  • Orders, procedures, and registration documents for the Certification of EIPs and eco-enterprises
  • Re-certification, termination, or revocation of the Certificate of EIPs and eco-enterprises

3. Swiss Government’s continuous support: Future cooperation Phase (2024 to 2028)

Having observed the positive outcome of EIPs’ past implementation in Vietnam, coupled with the partnership of UNIDO, the Swiss government has pledged to further support Vietnam from 2024 to 2028 in the development of EIPs and the attainment of a circular economy.
Moreover, there exist several cooperation frameworks between MPI and other Organizations as follows:

  • Actively promoting EIP building in Binh Duong under the World Bank coordination.
  • Implementing water circulation networks for several textile-focused industrial parks in Hung Yen and Thua Thien Hue.
  • Incentivizing efficient power usage to replicate South Korean models of EIPs.
  • Furthering cooperation with the European Union (EU) delegation and the Dutch Sustainable Trade Initiative (IDH) to support the transition to a circular economy for businesses in industrial parks.

Source: Various sources

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