Decision 1894/QD-TTg (September 4, 2025) — Approving the Vietnamese Environmental Industry (EI) Development Program for the 2025–2030 period. Decision 1894/QD-TTg marks an important milestone in transitioning Vietnam’s recycling and environmental treatment sector towards industrialization, standardization, and clear incentive policies (forming recycling zones/clusters, issuing HS codes, setting domestic supply rate targets, and supporting technology transfer). However, the actual impact will heavily depend on guiding legal documents, capital sources, and local management capacity over the next 1–3 years.
Key Contents of the Decision (Summary)
Overall Goal: To build and develop the environmental industry into an independent economic sector, contributing to the national economic structure, and ensuring proactive provision of technologies, equipment, and products for environmental protection and the circular economy foundation by 2030.
Specific Goals by 2030: Complete the legal framework; form recycling industrial zones/clusters as a leading foundation; develop domestic supply capacity for key sectors such as wastewater treatment (target supply of 70–80% of demand), exhaust gas treatment (60–70%), solid/hazardous waste treatment (50–70% for some indicators), and monitoring and measuring equipment (around 20%). (The specific target numbers are clearly stated in the Program).
Main Solutions: Review and finalize policies and institutions; issue standards/regulations for environmental industry goods; issue HS codes for environmental goods in the tariff catalog; implement incentives/investment support policies to form recycling industrial zones/clusters; support technological innovation, transfer, copyright trade, and hiring experts; and establish a list of priority technologies/equipment.
Management and Implementation Requirements: Assign Ministries, sectors, and People’s Committees at all levels to develop implementation plans and mechanisms; study and issue a specialized Decree on environmental industry development; and add environmental industry data to the national statistical system.
Direct Impact on the Recycling & Environmental Treatment Sector
- Increased Investment Scale and Centralized Infrastructure: The decision encourages the formation of recycling industrial zones/clusters. This means there will be a trend to locate recycling plants, transfer stations, and sorting facilities in clusters with centralized infrastructure (leachate treatment systems, safe landfills, exhaust gas treatment stations, and logistics). This will reduce logistical costs and improve environmental standards for recycling activities.
- Increased Domestic Supply Rate: The goal of increasing the domestic equipment supply rate (e.g., 70–80% for wastewater treatment) encourages the local production of treatment equipment, machinery, and recycled materials, benefiting domestic equipment manufacturers and technology solution providers.
- Technical Standardization & Transparency: The development of standards and regulations for equipment/construction/recycling will gradually shift operations from small-scale, manual activities to industrialized, environmentally compliant operations, reducing the risk of being shut down due to violations.
- Driving Force for Green and Technology Transfer: Support for copyright trade, hiring experts, and R&D support funds will encourage businesses to upgrade technology, adopt safer treatment methods, and increase efficiency.
- Statistics & Tax/Incentive Policies: Including the sector in the national statistical system and issuing environmental HS codes will facilitate tax policies, import/export incentives, and enable the measurement of the sector’s scale (attracting investment and green credit).
Beneficiaries and Specific Target Groups
- Small- and Large-scale Treatment and Recycling Businesses: These will directly benefit from investment incentive policies, the conditions for forming industrial clusters, access to funds, and tax incentives (once the policies are finalized and issued).
- Domestic Environmental Equipment Manufacturers: The goal of increasing the domestic supply rate is an opportunity to expand market share for companies that produce treatment equipment/platforms.
- Domestic & Foreign Investors: Investment incentive policies in the environmental industry and recycling zones will attract FDI and green funds.
- Environmental Technology Startups/SMEs: These will be encouraged through incubators, support funds, incubation networks, and prioritized public procurement mechanisms.
- Workers & Local Communities: This will create jobs in the recycling chain, but strict management is needed to avoid localized environmental risks. (A social benefit that requires compliance with standards).
- Regulatory Agencies and Industrial Supply Chains: These will have data and documentation for long-term policy planning.
Strategic Significance and Future Direction
- Transitioning the Recycling Sector from Fragmented to Industrialized: The Decision aims to transform recycling activities (currently often small-scale and informal) into an industrial, safe, and standardized value chain.
- Laying the Foundation for Vietnam’s Circular Economy: Developing the environmental industry is a key pillar to reduce emissions and conserve resources, aligning with climate change response and emission reduction strategies.
- Activating the Domestic Market for Environmental Products and Services: Public procurement benefits and standardization will help domestic businesses compete better against imports.
Specific Support for Businesses
Specific support measures for businesses are outlined in the Decision:
- Issuing policies for investment incentives, benefits, and support to form recycling industrial zones/clusters.
- Financial/investment support for technology transfer, copyright trade, and hiring domestic and international experts.
- Developing standards, regulations, and HS codes for environmental industry goods (supporting trade, import/export).
- Encouraging the establishment of incubators and support networks for SMEs in the environmental industry.
Suggestions for Businesses to Prepare
- Prepare Investment Dossiers for Recycling Clusters/Zones: Contact provincial/regional People’s Committees to understand incentive policies once the Decision is implemented at the provincial level and consider participating in centralized recycling zone projects.
- Leverage Technology Support Mechanisms: Create R&D proposals, requests for copyright support, or collaborate with institutes/universities, and submit specific needs to Ministries/localities (to receive support under the program).
- Register for Standards & Participate in Drafting: Proactively engage in the standard/regulation-making process to ensure products comply with domestic and international standards.
- Prepare a “Green” Dossier to Access Green Credit: Upgrade environmental management systems and demonstrate product life cycle efficiency to apply for green incentives/guarantees/credit.
- Monitor New HS Codes: When HS codes for environmental goods are issued, businesses should review them to benefit from import/export incentives or avoid tax risks.
Current Points to Note
- No Decree/Detailed Guidance Yet: The Decision is a program framework issued on September 4, 2025. As of now, there are no detailed guiding documents. The actual support will depend on guiding documents and implementation resources. If the decree/circulars are delayed, businesses will have to self-fund for longer periods.
- Technology Transition Risk for Small Businesses: Small businesses may lack the financial/human resources to upgrade to new standards. Therefore, specific support programs (financial, technical) are needed.
- Potential for Localized Environmental Impact: Concentrating many recycling facilities in one area without good centralized treatment infrastructure can create pollution risks; thus, the infrastructure of the zones/clusters must be prioritized.
