04/08/2016
Việt Nam identifies environmental industry as one of economic sectors supplying technologies, facilities, services and products meeting environmental protection requirements .
Since Resolution No. 41-NQ/TW by the Politburo on environmental protection during the industrialisation and modernisation of the country that established the foundation for the “formation and development of the environmental industry” by now the environmental industry of Việt Nam is still in the period of forming its development and orientation pathway.
1. Finalisation of the legal and policy framework
After the Resolution No. 41-NQ/TW dated 15/11/2004 by the Politburo setting the orientation for “forming and development of the environmental industry”, in 2005 the Law on Environmental Protection 52/2005/QH11 assigned the Ministry of Industry (now the Ministry of Industry and Trade) to instruct the development of the environmental industry (Clause 5, Article 121, LEP No. 52/2005/QH11). Only by 2012, the Ministry of Industry and Trade (MOIT) was assigned by the Government to develop the environmental industry at Decree No. 95/2012/ND-CP by the Government regulating the function, mandate and organisational structure of MOIT (Before that, in Decree No. 189/2007/ND-CP by the Government regulating the function, mandate and organisational structure of MOIT there were only 12 sectors and 10 fields without the environmental industry) followed by the establishment of the Pollution Control and Environmental Industry Division at Decision No. 699/QD-BCT by the Minister of MOIT regulating the function, mandate and organisational structure of the Industrial Safety Techniques and Environment Agency, afterwards the state management structure on environmental industry is formed.
MOIT is assigned by the Law on Environmental Protection 52/2005/QH11 to develop the environmental industry, but the “environmental industry sector” concept was not defined in legal documents of Việt Nam leading to many different understandings of adjustment scope and application limitations of the “environmental industry” that MOIT was assigned to “instruct the development”. Whether the environmental industry is a green industry linked with cleaner production or it is the industrial sector that manufactures green products, sound environmental products and eco-products? Environmental industry development is the development of a new industry or the conversion of existing structures towards greening existing industries? Does the environmental industry consist of environmental services and recycling industries? Discussion was lessened in 2014 after the environmental industry terminology was defined in the Law on Environmental Protection No. 55/2014/QH13 as “an economic sector supplying technologies, facilities, services and products meeting requirements on environmental protection” and the development of environmental industry (Article 153, LEP 2014) is regulated as “investment in construction, improvement of waste treatment and recycling technical infrastructure; concentrated waste treatment facility establishment and development; production and supply of equipment and products serving for environmental protection”.
Environmental industry is an economic sector that is highly policy-driven. Therefore, although by 2014 environmental industry was formally legalised, as a foundation for the formulation of legal documents for environmental industry development, but in the last 10 years (2005-2014), many policies have been used to develop the environmental industry. Of which, Decrees of the Government require the integration of incentives and supporting policies for the environmental industry development such as Decree No. 69/2008/ND-CP, Decree No. 04/2009/ND-CP, Decree No. 59/2014/ND-CP and Decree No. 19/2015/ND-CP; many decisions by the Prime Minister have been promulgated to promote the environmental industry development such as: Decision No. 1030/QD-TTg approving “Environmental industry sector development scheme to 2015, vision to 2025”, Decision No. 249/QD-TTg approving “Scheme for environmental service development to 2020”, Decision No. 1216/QD-TTg approving the “National environmental protection strategy to 2020”, Decision No. 1292/QD-TTg approving the action plan for the environmental industry development and energy savings to implement the industrialisation of Việt Nam within the cooperation framework of Việt Nam - Japan to 2020, vision to 2030.
2. Structure and component forming of the environmental industry sector
In Decision No. 10/2007/QD-TTg by the Prime Minister approving the system of economic sectors in Việt Nam, the environmental industry sector has no economic codes and products of the environmental industry sector do not have any product codes except some products relating to environmental services listed in E sector group such as: E381 – Waste collection, E382 – Waste treatment and disposal, etc. in Decision No. 39/2010/QD-TTg by the Prime Minister regulating the Việt Nam product sector system.
After the Prime Minister approved Decision No. 1030/QD-TTg approving “Environmental industry sector development scheme to 2015, vision to 2025”, the environmental industry sector is viewed as manufacturing, commercial and service provision facilities in three main areas: environmental industry equipment, environmental industry service (waste treatment, waste collection, monitoring, environmental impact assessment, review, etc.); and sustainable natural resource uses and environmental rehabilitation . By now, Việt Nam has about 928 enterprises working in all these three areas, attracting about 82,406 labourers. Together with activities of the Vietnam Environmental Industry Association, a professional social organisation of individuals and organisations participating in environmental industry development activities established in April 23rd, 2011 with the sponsorship of the Ministry of Industry and Trade, the Việt Nam environmental industry sector has officially formed.
2.1. Environmental industry equipment production
By now regarding the field of manufacturing environmental technology equipment, some enterprises with key products have been initially established such as: incineration of solid, industrial, healthcare and hazardous wastes; dust filtration system; waste classification chain and specialized waste transport facility (waste pressing vehicles, vacuum cleaner, oil spill collection ship, etc.). Competitive capacity of national enterprises that manufactures equipment and facilities is weaker than foreign enterprises. About 10 enterprises manufacture and produce environmental technology equipment such as air and dust infiltration system, hazardous and regular waste incineration, waste classification technology equipment, compost manufacturing and fuel pellets.
Environmental technology equipment in waste treatment makes up 40 - 60% of the total investment values, achieving about 700 - 1,000 thousand billion VND/year. However, the environmental industry equipment manufacturing in Việt Nam only halts at mechanical processing and separate manufacturing assembly but not fulfils the right meaning of environmental industrial equipment manufacturing technology.
Environmental industrial equipment products are also not listed in the Việt Nam environmental industry list and statistics criteria but they are merged with mechanical products or other industrial sectors. Basically this is a supporting industry for the environmental technology sector, originating from different sectors (chemistry, construction, steel, mechanics, electronics, etc).
Box 1. Environmental industry is a terminology having different definitions in other countries in the world
|
Environmental industry is considered as a relatively new definition in the world although its component has been existed for a long time. This definition was referred to from 1988 in the report of Environmental Business International (EBI), an organisation on market consultancy and investigation operating mostly in the areas of environmental industry and climate change. According to the preliminary definition of OECD, environmental industry or more correctly environmental products and services manufacturing industry consists of goods manufacturing activities and service supply in order to measure, prevent, limit, reduce or restore environmental losses in terms of water, air and land as well as relevant issues relating to waste, noise and ecosystems. Environmental industry also consists of cleaner production, environment risk reduction products and services, pollution prevention and natural resources uses. OECD changed this definition in 2005, after having consensus with UN, EC, IMF and WB to propose the definition of “groups of manufacturers of environmental products, including cleaner production technologies and products, pollution management service and natural resources management”. This definition is much broader than the original definition of OECD and other definitions that are being used in many developed countries such as eco-industry, environmental goods and services or environmental technology industry. Berg, D.R et. al, 1998 identified “environmental industry consists of activities creating profits in all fields: environmental regulation compliance; environmental assessment, analysis and protection; pollution control, waste management and pollution rehabilitation, natural resources and environment supply, such as water, recycled materials, clean energy; and technologies and techniques to enhance the quality of energy and natural resources uses, productivity increase and sustainable economic growth. DTI/DEFRA, 2006 described environmental industry as a group of enterprises manufacturing market goods and service provision for traditional pollution management (end of pipe cleaning and treatment); and integrated management of natural resources, or ecological production or consumption (including cleaner production). In general, the definition and delineation of environmental industry up to now is still a difficulty even in developed countries, mostly because of difficulties in delineation and categorisation of environmental fields, together with the advance and development of science and technology. Report of OECD stated that, except some products and services that are definitely grouped into the environmental industry (waste treatment, environmental monitoring, environmental impact assessment), remaining areas intersect with other industries (food, chemistry, mechanics, etc.) and therefore, it is difficult to define environmental industry in an adequate manner. This will lead to certain difficulties in sectoral studies, as well as the forming and orientation of sectoral policies and development planning. This is the point that should be noted for strategizing the young environmental industry development in Việt Nam. |
2.2. Environmental industry service
By now in Việt Nam, there are about 125 enterprises working in the field of water discharge and wastewater treatment, 473 enterprises performing solid waste treatment services. According to Decision No. 1292/QD-TTg by Prime Minister, there are 86 enterprises that are certificated to work in the areas of hazardous waste treatment.
The operating scope of enterprises on environmental industry service is medium and small, with low charter capital and limited capability for big investments; almost no state-owned enterprises on environmental services are strong enough to address enormous and important environmental issues of the country such as: regional, inter-provincial hazardous waste treatment centre; oil spill incident treatment; regional, inter-provincial concentrated domestic solid waste treatment; natural resources and environment loss assessment, environmental technology appraisal.
Equipment and technologies of enterprises used in providing environmental industry services were not invested at an appropriate level. As regulations on conditions for providing environmental industrial services are not available for a long period, many enterprises were formed following “all citizens providing environmental industrial services”, the lack of investments in professional services leads to ineffective performance and poor, inadequate and unrealistic consultancy service quality.
2.3. Natural resources sustainable use and environmental rehabilitation
Sustainable use of natural resources and environmental rehabilitation is mostly relevant to the scarcity of natural resources. Therefore, the key point of this sector is the development of the recycling industry.
The recycling industry intersects with the environmental industry services that involve solid waste treatment and hazardous waste treatment and with the manufacturing industry that involves recycled refuse materials such as paper, plastic and steel manufacturing industries.
Paper, plastic and steel manufacturing industries depend mostly on imported recycled materials. On the other hand, paper, plastic and steel refuse collected locally are recycled mostly in traditional craft villages with very backward infrastructure, equipment and technologies of the 1980s, 1990s .
Composting of organic wastes is the priority of ODA investments in recent years mostly with SERAPHIN and ASC technologies with capacities of 50 - 250 tonnes/day.
A majority of industrial wastes can be recycled as construction materials such as ashes of coal thermal power factory; appropriate technologies for recycling are not available for blast furnace ashes, electric furnace and dust waste of steelmaking, gypsum based waste of DAP fertiliser manufacturing factory .
In craft recycling villages, electronic wastes are mostly preliminarily recycled and then exported to China. By now, there is no domestic organization that is capable of recycling and collection of original materials enclosed in electronic wastes.
|
1. Solid waste collection, transportation and treatment: In urban areas, increasing each year, in 2010 achieved 81%, 82% in 2011; 83% in 2012 and 83.5-84% in 2013. Recently, the collection and transportation of solid wastes have been socialized; many private enterprises have invested in solid waste collection and transportation. In suburban areas, the rate is only 40 - 60%; in many areas, many households conduct self-burning of domestic wastes using backward methods. 2. Solid waste treatment: Currently, there are 30 solid waste treatment factories that have been invested with domestic and international technologies, which contributes to protect the environment, reduce landfills, etc. common solid waste treatment technologies are landfills, compost and incineration: Landfill: The total number of landfills in local areas is about 450, of which the proportion of sanitary solid waste landfill accounts for 20-25%. Some landfills have applied gas collection technologies for electricity generation such as in Nam Sơn – Hà Nội, Hải Phòng, Hồ Chí Minh City, etc. Composting organic waste: Currently, there are 22 compost factories. Waste treatment factories using foreign technologies and ODA loans are in Hà Nội (Cầu Diễn factory, 50 tonnes/day, Spanish technology), Nam Định (250 tonnes/day, French technology), Hải Phòng (Trang Cat, 200 tonnes/day, Korean technology), etc.; domestic technology factories in some provinces such as Vinh City (Dong Vinh, 200 tonnes/day, Seraphin technology), Huế (Thuy Phuong, 150 tonnes/day, ASC technology), Kiên Giang (200 tonnes/day, ASC technology), Cà Mau (200 tonnes/day), etc. Concentrated incineration: some factories are operating such as Xuân Sơn, Phương Đình (Hà Nội), Dong Thanh (Hồ Chí Minh City), Phuc Khanh (Thái Bình), Uông Bí (Quảng Ninh), etc. and are being invested in some areas such as Nam Sơn, Đông Anh (Hà Nội), etc. The incineration mostly follows the traditional two-stage combustion, Martin and Plasma incinerators. Combustion requires less land but high investment, management and operation costs. 3. Treatment expense: Solid waste treatment expense depends on local conditions and treatment technologies; solid waste management and treatment enterprises are paid from the local budget for domestic solid waste treatment: cost for landfill technology is about 60,000 - 140,000 VND/tonnes, compost manufacturing: 210,000-240,000 VND/tonnes, incineration about 320,000 - 360,000 VND/tonnes. Annually, local budget is allocated for solid waste collection and treatment: in Hồ Chí Minh City and Hà Nội about 1,200 - 1,500 billion VND/year, making up 3.5% of the city budget; other provinces about 20 - 40 billion VND/year, lowest at 3 - 10 billion VND/year. Expense for hazardous solid waste treatment is, on average, about 6 million VND/tonnes depending on waste types and methods, treatment technologies which is paid by the waste source to treatment facilities through service contracts between the 2 parties. |
3. Development potential and challenges of the environmental industry
According to the study by the Industrial Policy and Strategy Institute of the Ministry of Industry and Trade at the Strategic Environment Assessment Report of the “Environmental industry sector development planning to 2020, vision to 2030” that has been appraised by the Ministry of Natural Resources and Environment and at the report to the Prime Minister, it is forecasted that by 2020 the demand for the environmental industry development is very high.
Table 1. Forecast of development demands of the environmental industry sector
|
No. |
Area |
To 2020 |
To 2030 |
|---|---|---|---|
|
I |
Manufacturing of environmental industry equipment (Unit: billion VND/year) |
|
|
|
1.1 |
Wastewater treatment equipment |
22,797 |
70,479 |
|
1.2 |
Urban solid waste treatment equipment |
21,414 |
35,416 |
|
1.3 |
Sludge treatment equipment |
2,141 |
3,542 |
|
1.4 |
Hazardous waste treatment equipment |
46,085 |
110,725 |
|
1.5 |
Air emission treatment equipment |
1,000 |
2,000 |
|
|
Total value |
93,437 |
222,162 |
|
II |
Environmental industry service |
|
|
|
2.1 |
Total wastewater (Thousand m3/day night) |
9,345 |
22,227 |
|
|
Urban wastewater |
6,145 |
8,627 |
|
|
Industrial zone wastewater |
3,200 |
13,600 |
|
2.2 |
Total volumes of urban solid waste (tonnes/day) |
96,370 |
200,871 |
|
|
Special urban areas |
50,906 |
86,510 |
|
|
Other urban areas |
45,464 |
114,361 |
|
2.3 |
Total volumes of industrial zone solid waste (thousand tonnes/year) |
11,160 |
54,720 |
|
|
Non-hazardous solid waste |
7,812 |
38,304 |
|
|
Hazardous solid waste |
3,348 |
16,416 |
|
|
Hazardous healthcare waste |
50 |
92 |
|
2.4 |
Total volume of air emission (million tonnes of equivalent CO2 /year) |
320 |
542 |
|
|
Energy, industry |
251 |
470 |
|
|
Agriculture |
69 |
72 |
|
III |
Sustainable use of natural resources and environmental rehabilitation |
|
|
|
|
Total volume of recycled solid waste (thousand tonnes/year) |
7,280 |
21,840 |
|
3.1 |
Incineration of hazardous waste for energy |
432 |
1,296 |
|
3.2 |
Solidified solid waste, and others |
288 |
864 |
|
3.3 |
Solid wastes can be recycled (from urban solid wastes) -10% |
15,829 |
32,993 |
|
3.4 |
Solid waste can be recycled from solid waste in industrial zones |
7,280 |
21,840 |
|
3.5 |
Organic solid waste as compost, energy pellets |
17,588 |
36,659 |
|
3.6 |
Electronic solid waste |
89 |
2,397 |
|
3.7 |
Electric solid waste recycled as construction materials |
24,600 |
51,300 |
|
3.8 |
Recycled waste oil |
214 |
420 |
The potential is high but the Việt Nam environmental industry sector still faces non-insignificant challenges that are listed by the Prime Minister :
The capacity of environmental industry by now only meets 2 - 3% of the urban wastewater treatment demand, 15% of solid waste treatment, about 14% of hazardous waste treatment; many areas such as oil waste recycling, plastic refuse, electric and electronic waste have not developed.
The attraction of investments in environmental industry sector is low and not corresponding with the requirements of the society. The environmental service sector depends mostly on the budget allocated from the state budget, mostly for urban wastewater treatment services.
Environmental service cost is low and less-attractive for investors. This is the biggest barrier to the development of the environmental industry sector.
Capacity and linkage between research and mass production of environmental equipment is limited. Many state-owned environment enterprises are weak in technology capital investments. In some areas, foreign enterprises play important roles; private enterprises do not have opportunities for development.
Inadequate statistics on the environmental industry sector leads to negative impacts on the monitoring and policy-making of the environmental industry.
The environmental industry development has not focused on economic effectiveness as well as considered the scarcity of natural resources - main incentives for the development of the recycling industry.
4. Conclusion, suggestion and recommendation
In the past few years, many incentives and supporting mechanisms and policies promulgated by the Government and the Prime Minister have been mobilized to bring opportunities and development incentives for the environmental industry in Việt Nam. However, the incentives and supporting methods have not brought outcomes as expected. The environmental industry only meets 2-3% of the urban wastewater treatment requirements, 15% of solid waste treatment, 14% of hazardous waste treatment; many areas such as oil recycling, plastic refuse, electric and electronic wastes have not developed.
The question is whether the recent environmental industry development in Việt Nam is due to incentive and supporting policies? Looking back at incentives (tax, fees) and supporting measures (land, infrastructure, market information, scientific research development and technology transfer, supporting investment in construction of key environmental treatment projects) have been regulated in relevant legal documents, it could be seen that all activities to develop the environmental industry have particular incentives and supporting policies. However, the Ministry of Industry and Trade was assigned the task but not assigned the state management function on the development of the environmental industry sector (as mentioned earlier), the Government has just promulgated regulations on incentive and supporting policies and there are no legal documents as bases for comparison, classification and identification of entities that can obtain incentives and supporting policies. As a result, although incentive and supporting resources are available, both state management agencies and investors meet difficulties in accessing the resources.
Therefore, it is time that the State should not only have incentives and supporting measures but also have a fair and equal playground for investors. Consequently, the Government must have national standards and technical qualifications applied for each product and equipment that are made by the environmental industry. Based on the national standards and technical regulations, the comparison and appraisal of cost and quality is transparent and reliable.
The international integration is occurring at deeper and wider scales. The development of the environmental industry in Việt Nam cannot have the absence of international investors that bring in imported waste recycling treatment equipment, machines and production lines. Therefore, Việt Nam needs to have economic and product codes for the environmental industry of Việt Nam to identify projects and equipment as bases for regulation of export and import tax policies for this sector’s products and equipment. In addition, this is the foundation for ministries and sectors to develop corresponding national standards and technical regulations for equipment and products of the environmental industry sector, which are used as standards for assessment and comparison in appraisal, selection and pricing of equipment and products of investment projects in the environmental industry development.
Finally, a more transparent and standardised cost identification of environmental industry products and services that is developed based on standards and criteria on products and goods will be the motivations to promote the socialization of environmental industry service activities and operation handover contracts and to encourage investors to invest in waste treatment. Price of equipment, products and services will be the final determining factor attracting investors■
REFERENCE
Law on Environmental Protection 2014 No. 55/2014/QH13
Huynh Trung Hai. Some experience from the development of environmental industry in the world. National workshop on environmental industry products in the industry and trade sector (October -2014)
David R.Berg, Grant Ferrier. The U.S Environmental Industry: Meeting the Challenge: U.S Industry faces the 21st century. US Department of Commerce, (1998), Section 1.2, p13
OECD. The Environmental Goods and Services Industry. Manual for Data Collection and Analysis. Paris, 1999
DTI/DEFRA: Bridging the gap between environmental necessity and economic opportunity. Environmental Innovation. First Report of the Environmental Innovations Advisory Group. London, (2006)
OECD. The Global Environment Goods and Services Industry, Paris, (1996)
Decision 1030/QD-TTg dated 20/7/ 2009 by the Prime Minister
Decision 1292/QD-TTg dated 01/8/2014 by the Prime Minister
Ministry of Construction – Report on consolidation and assessment of the status after 6 years of implementation of Decree 59/2007/ND-CP, (2014).
Huynh Trung Hai, Nguyen Duc Quang, Ha Vinh Hung. Analysis of demand and orientation for the development of the recycling industry. National workshop on environmental industry product in the industry and trade sector (October-2014)
Decision No. 1696/QD-TTg dated 23rd September 2014 by the Prime Minister on some solutions implementing ashes, dusts, gypsums of thermal power plants, fertiliser chemical factories used as construction materials.
Decision No. 1292/QD-TTg dated 1st August 2014 by the Prime Minister.
MSc. Phạm Sinh Thành
Ministry of Industry and Trade
