Implementing a circular economy is key to driving innovation, enhancing quality, efficiency, and competitiveness, and creating effective value chains. It balances economic growth with environmental protection, supporting commitments to nature conservation, biodiversity, carbon neutrality, and net-zero emissions by 2050.
To promote this model among businesses, including FDI enterprises, priority policies are essential. The recent episode of “Creating Momentum for Circular Economy Development in Businesses” on Hanoi Radio & Television Broadcasting featured insights from Mr. Simon Kreye, Deputy Head of the German Embassy Hanoi, GIZ Vietnam, and GBA members including Big Dutchman Vietnam, B. Braun Vietnam, and tesa Site Haiphong. They discussed improvements and proposals to advance the circular economy in Vietnam, highlighting practical examples and the importance of business responsibility.
Watch the full interview (in Vietnamese) here>>> and below is the English script.
Need for Policies to Promote a Circular Economy
Torben Minko, General Director of B. Braun Vietnam: “We are trying to ensure that all products delivered to end consumers can be returned to us for recycling. For example, with plastic bottles, we try to contact end users to collect them for recycling and reintroduce them to the market. We are collaborating with other countries like Singapore to support us in collecting and recycling. Additionally, there is internal circular economy. For example, products produced in Europe are packed in cardboard boxes and sent to Vietnam. After taking the products out, we use the same cardboard boxes to pack products made in Vietnam and send them back to Europe.”
Dirk Hartmann, General Director of tesa Site Haiphong: “All elements of sustainability are related to the reuse and recycling of materials. Waste management is extremely important. Therefore, it is necessary to improve waste recycling and bring it back into the production cycle. This is one of the key measures.” He added “It is necessary to improve waste recycling and bring it back into the production cycle. Materials should not be wasted and should not be thrown away into the trash, but must be reused after the product’s life cycle ends.”
It can be seen that the circular economy model is one of the breakthrough solutions to address the relationship between the economy and the environment in the context of scarce, disrupted, and depleted resources and fuels. To preserve the living environment and achieve sustainable economic development, Hanoi in particular and Vietnam in general need to shift from a linear economy to a circular economy as soon as possible.
This shift will benefit the national economy, and especially, policies must be practical and effective in promoting the implementation of the circular economy, particularly within the business sector.
Pieter Buijs, Managing Director of Big Dutchman Vietnam discussed the vital role of circular economic development in transforming challenges into opportunities. He underscored how adopting circular economy practices can significantly benefit the environment, economy, and society in the following dialogue:
MC1: Sir, the recent report has shown that implementing a circular economy brings environmental benefits. So, when businesses adopt a circular economy, it will help protect the environment. Specifically, what does this mean for Vietnam’s commitment at COP26 to achieve net-zero emissions by 2050?
Answer 1: First, let’s clearly distinguish between carbon neutrality or net-zero emissions and the circular economy. Carbon neutrality essentially means that the greenhouse gases emitted by human activities are somehow offset by absorbing an equivalent amount from the atmosphere. As for the circular economy, it is an economic model that uses materials more efficiently in production activities with the goal of extending the lifespan of materials. For example, the efficient use of materials when constructing buildings will significantly reduce the demand for industrial materials. Therefore, you basically don’t need to produce new things. A major consulting firm recently conducted a study and concluded that if circular economy models are properly implemented, Europe could reduce greenhouse gas emissions by 50%. The circular economy complements net-zero emissions, but it is not the only solution to the problem.
MC2: So, what challenges do businesses face when transitioning from a linear economy to a circular economy?
Answer 2:
- Mindset Change: Shifting perspectives is crucial.
- Economic Viability: Companies like Big Dutchman see customer interest in sustainability, but profitability remains uncertain.
- Technical and Logistical Limits: These pose significant hurdles.
- Regulatory and Legal Issues: Policies must support and stimulate the circular economy.
MC3: In your opinion, has the circular economy model really developed in localities like Hanoi? What are the current barriers in Hanoi in particular and Vietnam in general in this regard? What policies do Hanoi and other localities need to encourage businesses to participate in the circular economy model?
Answer 3: I think the barriers we currently see in localities like Hanoi and elsewhere, such as funding for a new circular project or the legal enforcement of implemented solutions, are significant. Equally important is the change in mindset and actual behavior change. For example, reusing consumer goods instead of buying new ones.
Secondly, to encourage businesses to participate in the circular economy model, there need to be policies regarding carbon credit exchanges. Therefore, establish a carbon credit exchange to monetize the emissions you are reducing.
Thirdly, improve education and knowledge about the circular economy. How do you recycle? How do you reuse? Can you set up a second-hand market to buy consumer goods so that new ones don’t need to be produced?
And fourthly, I want to mention policies that stimulate media campaigns to create a sense of urgency and help people become familiar with the concept of the circular economy.
MC4: What advantages do businesses have when participating in the global supply chain by producing according to the circular economy model?
Answer 4: The main advantage is opening up export opportunities, especially to Europe, which is leading in creating a circular economy and moving towards net-zero emissions. Companies wanting to do business in Europe must align with these goals. The second benefit is cost savings from reusing materials efficiently, minimizing the need to buy new ones. The third benefit is potential additional income sources. For example, Big Dutchman supplies livestock equipment. Customers can turn animal waste into organic fertilizer, creating a second income source. Additionally, if a carbon credit trading platform is implemented, companies can sell certified CO2 emission reductions.
Conclusion: The circular economy brings double benefits to the environment and the economy, allowing businesses to utilize waste and scrap as inputs for other processes. As a leading country in developing a circular economy, Germany has introduced many regulations and prioritized policies for circular economy development, bringing positive results in environmental protection, economics, and launching high-quality consumer products to the market.
Circular Economy – Experience from Germany
As a country with the most advanced science and technology in the world, Germany has early on identified the goal of sustainable development, applying a circular economy model, and focusing on waste management.
Germany’s circular economy law clearly stipulates the principles of sharing public and private responsibilities in waste management, along with a five-tier waste hierarchy, prioritizing reuse or recycling to limit landfill. Notably, the German government has shifted the task of waste management to resource management with the view that waste can become a source of raw materials and energy for production.
Simon Kreye, Deputy Head of the German Embassy Hanoi: “Since the 1970s, we have had many environmental protection movements. Since then, the government’s focus on environmental protection has increased. Today, it has become a government policy.”
Dennis Quennet, Director of Sustainable Economic Development, GIZ Vietnam: “We sort waste for recycling after use. One of Germany’s successes is the establishment of the recycling industry. Whenever there are products that are no longer used, we always consider what can be done with them.”
Germany’s Circular Economy Policy mandates businesses to reduce resource consumption and waste. Regulations support waste treatment and recycling, requiring manufacturers to use secondary materials, recycle harmful materials, and manage used goods or packaging. These activities are handled by manufacturers or distributors, with costs included in product prices. Germany’s strict environmental policies have successfully promoted a circular economy.