2024 marks the dawn of Expanded Producer Responsibility (EPR), promising a bright future for the long-neglected recycling industry.

Starting January 1, certain manufacturing and import businesses will be required to take responsibility for recycling tyres, batteries, lubricants, packaging materials and other specified products. These responsibilities are outlined in the Environmental Protection Law and Decree No. 08/2022/ND-CP, aiming to address environmental concerns.

Given the new regulation, importers and businesses selling consumer products in the domestic market must collect and obtain waste credits from designated collection units according to the specified rates. Sellers are also required to demonstrate their collection capacity to meet these requirements. The waste recycling rates will be subject to revision after a period of three years.

As a result, EPR, which is seen as a revolutionary waste management policy, offers a financially effective solution for addressing waste issues while stimulating the growth of the recycling industry.

Through the enforcement of environmental laws and legal frameworks for recycling, businesses are taking important steps. For example, major competitors have formed the Packaging Recycling Organisation Vietnam (PRO Vietnam) to develop a strong ecosystem for domestic packaging collection and recycling, reducing environmental impact.

Meanwhile, global brands like Coca-Cola, Unilever and FrieslandCampina are actively collaborating with recycling entities, committing to sustainable development goals.

The demand for recycled products is obviously on the rise.

Obstacles not less

Despite the emerging opportunities in the recycling industry, Vietnamese businesses are facing challenges in harnessing these prospects, putting them at risk of losing market share domestically.

In fact, the implementation of the EPR mechanism to enforce product and packaging recycling regulations continues to encounter significant challenges.

A major headache for manufacturers is the absence of clear guidelines regarding recycling costs.

Manufacturers have three options to fulfil their responsibility: organising in-house recycling, outsourcing to third-party recyclers, or contributing financially to the Việt Nam Environmental Protection Fund.

Quách Thị Xuân, Coordinator of Vietnam Zero Waste Alliance, said that the regulations detailing EPR implementation, such as cost allocation for recycling and guidelines on the use of financial contributions, have not been issued yet.

While numerous businesses consider the cost norms of recycling (Fs) to be high, the Ministry of Natural Resources and Environment (MONRE) said that they are at reasonable levels to cover the recycling costs in Việt Nam.

Amid the current difficulties in global and domestic economic backgrounds, businesses often prefer the simplest option of making financial contributions to the fund as a form of taxation.

Việt Nam also lacks policies that effectively promote the recycling market, Xuân added.

“There are no mandatory regulations in place regarding the minimum recycled content requirement,” Xuân told Việt Nam News.

“For example, in the plastic recycling industry, there is no obligation to use recycled plastic.

“In contrast, other countries have regulations stipulating a maximum percentage of recycled plastic to be used, such as 30 per cent in the production of new products. Unfortunately, these regulations have not yet been established in Việt Nam.”

Meanwhile, the country’s recycling industry remains outdated and lacks adequate infrastructure, further exacerbating the challenges.

Recycling operations in Việt Nam are still characterised by manual and small-scale processes, which do not yet meet the quality requirements for use in the production of recycling materials for exporting.

“There are certain products, such as batteries and accumulators, that we still cannot recycle," Xuân said.

"For products like plastics, packaging and electronics, we do have the ability to recycle them, but our infrastructure is still weak and the scale of recycling is not yet sufficient.”

This affects prices and supplies of the recycled products, reducing competitiveness of domestic recycling companies.

More encouragement policies

Policies should be amended so that manufacturers and importers can only opt for collecting and recycling approaches, instead of making financial contributions, said Xuân.

To enhance the value of post-consumer packaging through recycling, standards and regulations need to be established for increasing recycling-oriented design.

Policies should mandate minimum recycled content, promote the use of recycled materials and incentivise investment in high-quality recycling infrastructure and technologies.

Additionally, upgrading recycling villages and ensuring environmental compliance will create a level playing field for all recycling businesses.

To allow recycling companies to prepare, upgrade technology and expand their operations, Việt Nam needs to issue a clear roadmap for the mandatory recycling rates specified in Decree 08/2022/ND-CP. This plan should outline the incremental increases over the years and specify the year when the 100 per cent target will be achieved.

"I also hope that we can implement regulations on solid waste classification at the source and potentially limit the import of scrap materials from abroad for production purposes," Xuân said, referring to the use of domestic scraps as input materials for Việt Nam recycling industry.

Currently, many global importers have stipulated that products must contain approximately 30-60 per cent recycled materials. To meet these requirements, businesses in Việt Nam have been relying on importing a substantial amount of recycled materials from other countries like China.

"If we can restrict the imported scrap materials, it will encourage the use of domestic recycled wastes as well as the development of the recycling industry."

Equally important is increasing consumer awareness, as it affects the market and consumer preferences.

"For products made from recycled materials, consumers may still have reservations when they see packaging that claims to be 100 per cent made from recycled materials," Xuân added. — VNS