Tackling Challenges in Eco-Industrial Park Development

By 2030, Vietnam aims for approximately 40-50% of localities nationwide to have plans for converting existing industrial parks into eco-industrial parks, while 8-10% of localities are expected to develop plans for establishing new eco-industrial parks. Achieving this goal will require addressing several challenges, including securing capital and financial resources, and navigating regulatory hurdles. Our reporter interviewed Ms. Vuong Thi Minh Hieu, Deputy Director of the Department for Economic Zones Management at the Ministry of Planning and Investment, to learn more about these issues.

The green transformation of industrial parks currently faces several challenges related to legal regulations, including those governing water reuse, energy use and access to resources. How can these obstacles be tackled in the coming time?

Observations by authorities and feedback from the business community indicate that the transformation and development of new ecological industrial parks (IP) have encountered significant challenges. These include insufficient and inconsistent regulatory frameworks, particularly concerning water and waste reuse in industrial parks, which impede the progress of industrial symbiosis.

Besides, the cost of solutions to convert or build new ecological industrial parks requires huge investment capital or advanced technical solutions while companies lack resources. Therefore, it is necessary to further mobilize resources from international organizations, business associations, climate finance funds, energy transition partners, commercial banks and green financial institutions. Moreover, it is necessary to add more incentives on finance, credit and land to encourage companies to convert and build new eco-IPs.

The Ministry of Planning and Investment is working with relevant bodies to promote the above solutions to create a favorable environment and encourage eco-industrial parks as follows:

Promoting support for making policies and guidelines on eco-industrial parks, assisting in the assessment and certification of eco-IPs and coordinating with relevant bodies to research and propose solutions to remove barriers and resolve obstacles in the implementation of eco-IPs.

Enhancing technical support at IPs is essential to meet the requirements for eco-IPs. This involves ensuring compliance with domestic regulations while aligning with international standards.

Strengthening public-private connection; mobilizing more resources from international organizations, business associations, climate finance funds, energy transition partners and other resources for climate change as well as connecting with commercial banks and green financial institutions to mobilize more resources for the implementation of eco-IPs.

Bracing up training to improve capacity for central and local authorities, IP infrastructure developers and tenants in industrial parks; coordinating with donors and relevant agencies to muster capital, techniques and technology to build eco-IPs, closely linking eco-IPs with green growth and circular economy in line with the Government's direction.

Vietnam aims to convert 40-50% of the industrial parks into eco-industrial parks nationwide by 2030

The transition to green practices, including meeting ESG (Environmental, Social and Governance) criteria, adopting circular economy principles, and developing eco-industrial parks, represents a key trend. How should businesses and investors seize this opportunity to attract green investment capital?

The global landscape of trade and investment is undergoing transformations, presenting both opportunities and challenges for businesses. These shifts, particularly in sectors such as green energy and the semiconductor industry, offer potential breakthroughs in attracting investment and integrating into new value chains. To effectively capitalize on redirected investment flows, developers and operators of IP infrastructure should focus on the following key areas:

One, boldly adapting development strategies to align with new industrial park and economic zone models, including eco-IPs.

Two, positioning science, technology, and innovation as the core drivers for attracting business and investment. Focusing on enticing technology firms and startups by allocating land and resources for research and development projects, new product research and testing, high-tech applications, digital transformation and energy efficiency initiatives.

Three, selectively attracting investors, actively contacting and closely following the world's leading corporations in industries and fields that Vietnam prioritizes, especially modern technology projects with commitments to technology transfer, strong ripple effects on industries and fields, and expanding the market; developing supply chains, developing human resources for domestic companies to enter more deeply in global value chains.

Four, ensuring environmental sustainability and launching solutions to build housing and service facilities and public utilities for workers in IPs; researching and adopting EGS standards and meeting sector-specific requirements.

Five, enhancing the competitiveness and attractiveness of each IP through sustainable transformation in all three pillars: economy, society and environment.

The green transformation of industrial parks is currently hindered by challenges in legal regulations

The Ministry of Planning and Investment is reporting to the Government on the outline of the Law on Industrial Parks and Economic Zones. How will this law supplement the current incentive policy on eco-industrial park development?

Regarding the institutional development of industrial parks and economic zones (EZ), the Ministry of Planning and Investment is in the process of consulting on and submitting a proposal for the Construction of the Law on IPs and EZs to the Government. The proposal will focus on the following key areas:

Institutionalizing viewpoints, guidelines, policies and orientations of the Party and the State on IP and EZ construction and development; creating a unified legal corridor for IPs and EZs.

Production line at An Phat Bioplastics factory, An Phat Holdings Group 

Stipulating the conditions for IP and EZ planning to ensure consistency in the national planning system, sectoral and field planning on the principle of land efficiency, linked with investment attraction, associated with regional connectivity and formation of key IPs, ecosystem conservation and sustainable economic, social and environmental development; regulating policies on investment incentive and attraction in IP and EZ construction and development in disadvantaged areas; supplementing regulations on incentive and support policies on construction and development of new types of IPs, new functional areas in IPs, new economic zones and new industries (like chip, semiconductor and innovation), developing industry linkages and industry clusters in IPs and EZs.

Improving the effective State administration of IPs and EZs on the single-window principle; fostering decentralization of authority; building a streamlined organization and management model with sufficient authority, simplifying administrative procedures, and upgrading the investment and business environment in Vietnam.

For new industrial park models, including eco-industrial parks, the draft law, once approved by the competent authorities, is expected to introduce enhanced mechanisms and policies. These will aim to encourage investment from both primary and secondary companies. Key areas of focus will include policies on operational duration, access to finance and credit, and measures to address policy bottlenecks. The goal is to remove barriers and increase investment resources for these industrial park models.

Thank you very much!

By Thu Ha, Vietnam Business Forum