Application Initiatives for Circular Economy

10:36:00 AM | 12/17/2021

With the efforts of the Government, agencies and many businesses in the past years, the concept of circular economy has become much familiar in the Vietnamese business community. Vietnam Business Forum would like to introduce some opinions on this matter.

Circular economy brings many business opportunities
Mr. Nguyen Quang Vinh, General Secretary of VCCI, Vice Chair cum General Secretary of VBCSD

The circular economy brings a new perspective on the more efficient and economical use of inputs; constantly reminds people to use finite resources such as water, energy, materials and even food with a longer life cycle and higher value than the current traditional way. According to a 2019 study by the World Business Council for Sustainable Development (WBCSD), once adopted, the circular economy will help create at least US$7.7 trillion of market opportunities for businesses and more than 380 million new job opportunities by 2030, while sustaining global economic growth.

Building the circular economy is defined as one of the country's development goals in the 2021-2030 period as stated in the Document of the 13th National Party Congress and included in the 2020 Environmental Law. This is an effort to build a legal corridor and an institutional framework for the stronger application of the circular economy in Vietnam.

The circular economy has been included in the working agenda of VBCSD/VCCI since 2016. VBCSD/VCCI has added this content into annual forums and conferences on sustainable development hosted by VBCSD/VCCI from 2017, thus helping raise awareness and boost discussions on the circular economy among the Government, agencies, experts and business community. In January 2018, VBCSD/VCCI officially launched the “Circular economy support initiative for businesses in Vietnam”. This effort enhances the competitiveness of the private sector and further fosters business participation to build a net-zero economy.

In 2020, VBCSD/VCCI asked the Prime Minister to develop and carry out the National Program on Circular Economy Support for the Business Community in the 2021-2025 period.

Furthermore, VBCSD/VCCI is also actively coordinating with its members, domestic and international partners to carry out projects and initiatives such as the “Zero waste to nature” initiative to reduce waste plastic and build a sustainable circular business model; the “Vietnam secondary marketplace” initiative; studies on readied participation into the circular economy in the paper and plastic industries; and business and media training on circular economy.

Recently, in October 2021, VBCSD published a report on research results on the current situation and potential of the circular economy in the fast-moving consumer goods industry in Vietnam, focused on the food and beverage sector. The study was carried out on 100 medium and large manufacturers and processors of inputs and products categorized into nine food and drink categories. Research results show that 90% of respondents shifted to the circular economy at different levels, with a focus on prioritized use of materials, infrastructure and packaging.

Building a zero-waste future
Mr. Binu Jacob, CEO of Nestlé Vietnam, Co-Chair of VBCSD

As one of the world-leading food and beverage companies, Nestlé has built a phased roadmap for net-zero CO2 emissions across its operation and supply chains by 2050.

Fulfilling the commitment “By 2025, 100% of Nestlé packaging will be recyclable or reusable”. This commitment matches Nestlé's vision “None of Nestlé's packaging, including plastic packaging, should be landfilled or wasted” to realize the goal of building and shaping a zero-waste future.

By mid-2022, 100% of Nestlé's instant drink products will switch to using environmentally friendly straws. This initiative helps reduce by nearly 700 tons the plastic waste in production each year.

Other Nestlé brands such as Nescafé are also being shifted to single-package, which is recycled much easier than the multi-layer package. La Vie Company, a member of Nestlé Group, also launched a natural mineral water product line using recycled plastic bottles (rPET).

Not only leading research and development of sustainable packaging, Nestlé also actively cooperates with the government and partner businesses to strengthen efforts to combat plastic waste. In 2021, Nestlé Milo worked with the Ministry of Natural Resources and Environment to launch the campaign "Say no to plastic straws", calling on 98 million Vietnamese people to take action to combat plastic waste.

Nestlé Vietnam and La Vie joined hands with leading companies in consumer goods and packaging sectors to co-found the Packaging Recycling Organization of Vietnam (PRO Vietnam) which aims to boost the circular economy to turn waste into resources instead of releasing it into the environment. Nestlé is also an active member of the Global Plastic Action Partnership Program (GPAP) and the National Plastic Action Partnership Program (NPAP).

By applying the circular economy in manufacturing factories, the company not only reduces solid waste and plastic waste into the environment but also helps cut 22,600 tons of CO2 emissions a year. Biomass energy helps replace 73% of fuel for boilers while 100% of waste from coffee production is reused as biomass energy.

Nestlé also actively recycles and reuses waste, including dairy packages. The company has changed packaging material from 25kg to 250kg, helping reduce 34 tons of plastic a year, and used a 1-ton sugar package to slash 31 tons of plastic a year or replace plastic wraps with canvas. Thanks to these efforts, Nestlé has significantly diminished the plastic used in production.

Applying circular economy from production
Mr. Pham Hung Anh Tuan, Head of Operations, BAT East Asia Cluster

In the sustainable development strategy, the tobacco industry has adopted many solutions to minimize product harm and improve production processes to reduce emissions into the environment. Particularly, BAT is very keen on biodiversity conservation, water protection and forest protection, committed to not using natural firewood, improving soil fertility, managing energy and reducing sources of water pollution in its leaf-growing areas. In addition, BAT has sought to raise farmers' awareness by applying advanced production models and providing culturally intuitive and appropriate training.

BAT-Vinataba tobacco joint venture factory in Bien Hoa (Dong Nai) also adopted many initiatives such as water reduction and water reuse. Waste from kitchens, leaves, tobacco dust and sewage sludge are reused to make fertilizers.

In business, we focus on reducing carbon emissions such as rooftop solar power systems and shifting to use biomass energy for boilers instead of fossil fuels.

In Vietnam, with more than 15 years of developing tobacco material areas, BAT has had stable growing areas where farmers’ incomes are always 30% higher than the investment target and over 90% of farmers have worked for the company since its establishment. To date, BAT’s factories in Vietnam have completely switched to using biomass for combustion boilers, thereby raising the rate of renewable energy used in Vietnam by the end of the third quarter of 2021 to 26%, double the plan for 2021. All lighting systems at factories have switched to LED lights to save more than 40% of lighting energy compared to conventional light bulbs.

Effective sustainability applications have helped BAT on a global scale to be continuously recognized on the Dow Jones Sustainability Index and continuously recognized as a Diversity Leader by the Financial Times.

By 2025, BAT aims to completely eliminate unnecessary single-use packaging plastics, achieve an average recycling rate of 30% for all plastic packaging; all plastic packaging products can be recycled, reused or biodegradable, environmentally friendly. All BAT plants will have no landfill waste and 95% of waste will be recycled.

By Huong Ly, Vietnam Business Forum