Posted At: Jun 09, 2026 - 3 Views
On October 29, 2025, the Ministry of Industry and Trade issued Decision No. 3187/QĐ‑BCT promulgating the Action Plan for Implementing a Circular Economy in the Industry and Trade Sector until 2035, aimed at innovating the growth model, improving resource efficiency, and enhancing the competitiveness of the Industry and Trade sector.
Legal basis
The circular economy model has been established on a legal foundation in several documents, specifically: the 2020 Law on Environmental Protection (Article 142: Circular Economy) and Decree No. 08/2022/ND-CP dated January 10, 2022, of the Government detailing certain provisions of the Environmental Protection Law (Section 3: Criteria, roadmap, and incentive mechanisms for circular economy development); Decision No. 222/QĐ-TTg dated January 23, 2025, of the Prime Minister on the National Action Plan for Implementing Circular Economy until 2035 (Section 4, Article VIII), which stipulates that ministries and ministerial-level agencies are responsible for organizing the development and issuance of sector- or product-specific circular economy action plans in accordance with this national action plan and their assigned functions and management responsibilities.
Strategic Perspective
From a strategic perspective, the circular economy is identified as a priority orientation in the Industry and Trade sector to drive green transition, promote innovation, and develop circular business models aligned with sustainable development requirements. Implementing the circular economy contributes to achieving sectoral objectives, complying with legal regulations and international commitments on sustainable development and climate change, and advancing a green, circular economy in Vietnam. Circular economy implementation in the sector should be organized coherently, with a clear and unified roadmap, integrated into existing policies, strategies, plans, and programs, focusing on breakthrough tasks that ensure close linkage along the product lifecycle and across sectors to maximize spillover effects. Implementation must leverage innovation and science–technology applications, utilizing the Fourth Industrial Revolution achievements to optimize the value of materials and waste throughout the product lifecycle, from design, production, and distribution to consumption and waste management. Priority tasks must be urgent, practical, tailored to sectoral characteristics, and maximize sustainable development potential. Implementation requires active and sustainable participation of stakeholders, with businesses and consumers at the center.
Objectives
The overall objective of the Action Plan is to promote the adoption of circular economy models across all fields within the Industry and Trade sector, including industrial production, trade, distribution, and supporting services. Key focuses include innovation, technology transition, and the development of circular business models. The circular economy is seen as a solution to increase resource efficiency, reduce waste generation, lower greenhouse gas emissions, and enhance renewable energy usage. The plan also aims to establish sustainable production–consumption chains, where products have extended lifecycles, materials are reused and recycled, and waste becomes secondary raw materials. Promoting the recycled material market and developing a circular business ecosystem are integral to these objectives. The plan targets green job creation, enhanced competitiveness, and compliance with international clean production standards. By 2035, the Ministry aims to establish a complete institutional and policy framework supporting circular economy implementation, including reviewing and integrating circular economy content into sectoral planning, strategies, and programs, issuing relevant standards and technical regulations, and expanding the scale of circular economy adoption, particularly in resource-intensive or high-waste sectors. It also emphasizes developing recycled material markets, strengthening business capacity in sustainable product design, and establishing monitoring and evaluation mechanisms, while fostering links between businesses, localities, and international partners to support technology transfer, innovation, and investment cooperation.
Key Tasks
The Action Plan focuses on three pillars: capacity building, policy and institutional development, and deployment of circular economy technologies. The Ministry will organize communications and training for management authorities, businesses, and consumers, covering eco-design, lifecycle assessment, circular waste management, and clean technology application. Sharing effective models and business lessons will help scale circular practices and provide a foundation for technical and managerial solutions.
Policy and institutional development is also critical, including reviewing and integrating circular economy content into laws, sectoral strategies, and plans, as well as proposing amendments to fill gaps. Incentives include tax benefits, access to technology, capital, and markets. Evaluation criteria will quantify implementation, track progress, and promote eco-design and material management across the value chain.
Businesses are supported to develop circular models via clean technology investment, eco-design, recycled material usage, and lifecycle extension. Support includes technology transfer, digital transformation, traceability systems, and capacity building in lifecycle management. Recycled material markets and circular consumption are developed to stabilize supply, improve production efficiency, and reduce resource pressure.
Waste management is a breakthrough task, treating waste as secondary raw materials. Pilot models include source segregation, recovery, reuse, recycling, and technological application, coupled with technical-standard infrastructure development to form closed-loop circular chains, reducing landfill and greenhouse gas emissions.
Effects
Decision 3187/QĐ‑BCT provides a comprehensive action framework guiding the Industry and Trade sector toward circular economy adoption, helping businesses adapt to sustainable development requirements, enhance competitiveness, reduce risks from international green policies, decrease greenhouse gas emissions, conserve resources, and improve environmental quality, thus advancing Vietnam’s green growth and sustainable development goals.
In the new-generation FTAs to which Viet Nam is a party, the circular economy is increasingly reflected, mainly through commitments on efficient resource use, waste reduction, the promotion of recycling, and sustainable production and consumption models. EVFTA and UKVFTA incorporate these elements in their Trade and Sustainable Development Chapters, emphasizing sustainable resource management, a low-carbon economy, and environmental cooperation; while the CPTPP also addresses waste management, environmental protection, and the encouragement of clean technologies, thereby providing a foundation for the implementation of the circular economy. One of the policies supporting the circular economy model globally is Border Carbon Adjustment (BCA) mechanisms, exemplified by the European Union’s Carbon Border Adjustment Mechanism (EU CBAM) and the UK CBAM. The EU CBAM, effective from 2026, requires importers to declare and pay for the carbon content equivalent to products produced within the EU. Similarly, the United Kingdom is finalizing its own CBAM, while Canada, the United States, Japan, and South Korea are exploring carbon pricing measures linked to trade. These policies aim to ensure fairness in global carbon competition but also pose significant challenges for exporting countries, particularly developing economies such as Vietnam. |
Source: Multilateral Trade Policy Department