Vietnam’s Green Industry: An important development of the sustainable economy

Green industry development in Vietnam

Green industry development in Vietnam started gaining attention around 2010-2011. Vietnam’s first two green industrial projects were the Colgate-Palmolive Factory (LEED Silver Certification in 2010) and the YCH Protrade Distripark logistics center (LEED Silver in 2011). These projects marked a significant shift in recognizing the importance of green building certifications for industrial projects in Vietnam.

In the following years, the number of newly constructed and expanded factories adhering to green building standards steadily increased. There were six industrial projects in 2012-2013, ten in 2014, twelve in 2015, and fifteen in 2016-2017. By early 2024, the industrial park real estate sector accounted for over 30% of nearly 400 projects certified as green buildings in Vietnam.

Recently, the Vietnamese government has recognized the crucial role of green industry as well as eco-industrial parks in environmental protection and sustainable development. Policies and support programs such as the National Strategy on Green Growth and the National Action Plan on Cleaner Production have been implemented to encourage businesses to adopt advanced and environmentally friendly technologies. Consequently, many large enterprises have begun transitioning to green production methods, utilizing renewable energy and optimizing resource use.

Several investors in Vietnam, including VSIP and DEEP C, have developed projects that have achieved green building certification. These organizations utilize rooftop solar power systems to supply electricity to tenants in the industrial parks.

Financial needs for developing green industry

Investing in the green industry requires significant financial resources. According to the Ministry of Planning and Investment and the World Bank, Vietnam needs about $30 billion for its green growth strategy by 2030. The state budget can cover up to 30%, requiring the remaining 70% from other sources, primarily the private sector.

Transitioning to green development also necessitates advanced technology and science in production and business. However, the adoption of high technology in Vietnam’s agricultural and industrial sectors is limited. Businesses struggle to access foreign knowledge, experience, and technology and often lack the financial resources for high-tech applications.

To address these issues, on July 22, 2022, the Prime Minister issued Decision No. 882/QD-TTg, approving the National Action Plan on Green Growth for 2021-2030. This plan focuses on reducing greenhouse gas emissions, promoting green production, fostering a green lifestyle, and encouraging sustainable consumption.

Additionally, green credit policies offer interest rate subsidies for environmental protection, energy-saving, and clean technology projects. The Vietnam Environmental Protection Fund provides preferential loans with interest rates of up to 3.6% per year and a maximum term of 10 years. These policies support environmental service providers, clean energy projects, and efficient water use. Green industrial growth is essential for Vietnam, given the ongoing environmental pollution, climate change, and resource depletion. Thus, green growth requires reasonable policies and a clear, feasible implementation roadmap.

The World Green Economy Council (WGECO) defines Green Green Industry means economies striving for a more sustainable pathway of growth, by undertaking green public investments and implementing public policy initiatives that encourage environmentally responsible private investments. Greening of Industry is a method to attain sustainable economic growth and promote sustainable economies. It includes policymaking, improved industrial production processes, and resource-efficient productivity. (Source: https://wgeco.org/green-industry/)