Vietnam: Solid Waste Handling and Management

Vietnam: Solid Waste Handling and Management Page 1 of 8

Ngo Thuc Anh April 2010 Summary Given Vietnams rapid urbanization due to consistently strong economic growth over the past several years, solid waste has become a growing concern of virtually every Vietnamese city. In a recent national survey conducted by the Ministry of Natural Resources and Environment (MONRE), nearly 70 percent of Vietnamese municipalities identified solid waste management as one of their top environmental priorities. Important challenges in improving solid waste management include a lack of funding and equipment, lack of public awareness, inconsistent urban planning, and an insufficient legal framework. Further, technical capability for hazardous waste treatment is lacking. This report provides an overview of the solid waste handling and management sector, consisting of waste generation; waste handling and collection; disposal; treatment; and management issues such as policy and institutions.

Market Demand According to the Ministry of Construction, Vietnam's waste amounted to approximately 29 million metric tons in 2008, with municipal waste from households, restaurants, markets, and businesses sources accounting for over 80 percent of the total. Given a growing population, rapid urbanization and increased consumption, municipal waste is expanding considerably. With this growth, it is anticipated that waste generation will increase to 36 million metric tons by 2015, 47 million metric tons by 2020, and 54 million metric tons by 2025, and that the types of waste produced will continue to undergo a change from more degradable to less degradable and more hazardous. For the most part, municipal waste is concentrated in urban areas, while industrial waste is concentrated in economic zones, industrial parks, and urban areas. Growth in hazardouswaste-intensive industries such as chemical products and electronic products is expected to increase the proportion of hazardous waste in Vietnam. There is an urgent need to establish industrial hazardous waste management systems, including factory-based handling, treatment, and disposal systems, and centralized hazardous waste treatment facilities. Hazardous waste from industries and hazardous healthcare waste from hospitals, while much smaller in terms of quantities, are also burning issues because they pose high health and environmental risks if not properly handled and disposed. Hazardous healthcare waste is increasing more rapidly as a result of the adoption of new medical techniques, greater use of disposable medical equipment such as plastic syringes, and an increase in tests, therapies, and operations undertaken.

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Waste handling in Vietnam, including collection, treatment and disposal is mainly carried out by Public Urban Environment Companies (URENCOs), which are responsible for the collection and disposal of municipal waste, including domestic, institutional, and in most cases also industrial and healthcare waste. Although there have been significant improvements by URENCOs in handling waste, most of the municipal waste in Vietnam is not safely disposed of. The dominant form of disposal of municipal waste remains open dumping. In many areas, selfdisposal methods such as burning or burying waste, or dumping in rivers, canals, and open fields is common. Out of the 91 disposal sites in the country, only 17 are sanitary landfills. Hazardous waste handling remains weak. Industrial hazardous waste treatment systems are largely inadequate. Given the lack of treatment facilities and limited incentives for safe disposal, many industries use a variety of unsafe methods of treatment and disposal, including allowing URENCOs to collect and dispose the hazardous waste with municipal waste, store hazardous waste onsite, sell to recyclers, or even dump indiscriminately. Hazardous healthcare waste treatment capacity is expanding but is hindered by poor technical capacity. Vietnam has built 43 modern medical waste incinerators since 1997, bringing its total capacity for incineration of hazardous healthcare waste up by roughly 50 percent. The composition of Vietnamese waste makes composting potentially attractive. The high proportion of organic matter in municipal waste provides great potential for composting, which can reduce disposal costs while producing a marketable soil conditioner for agricultural and public uses. Given the strong market for composting fertilizers once source separation becomes successful, the effectiveness of centralized composting facilities could increase considerably. The government strongly encourages private sector participation in solid waste collection, separation, transportation and treatment. Polluters Pay is compulsory by regulation. Entities generating solid waste are responsible for waste collection, transportation and treatment fees. Regulation also requires that waste be separated at the sources of generation. In order to minimize burying waste, the government recommends new technologies to treat less degradable waste. Vietnams solid waste management is facing a number of challenges. Waste generation, composition, types of waste and hazardous waste are increasing. This is particularly due to the rapid urbanization and strong industrial growth. Public awareness and accountability on waste management are still quite low. The community does not fully perceive the benefits of the waste separation at source, waste reduction, reuse and recycle. Waste treatment technologies and facilities are outdated and in serious shortage. The recycling industry is underdeveloped due to the lack of proper investment. Only a number of major cities have recycling facilities. The legal framework for waste management is inadequate. Despite of the issuance of a law on environment and of other Governments decrees, there are not enough detailed guidelines for implementation. Policy measures such as tax, fees as incentives for waste reduction, reuse and recycling are not in place. Last but not least, investment for waste management is quite low and inefficient.

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Over the past decade, commendable efforts have been made to develop a policy and legal framework for environmental protection, particularly for the management and disposal of waste streams, specifically the Strategy for the Management of Solid Waste (SWM) in Vietnam Cities and Industrial Parks (1999), the National Strategy for Environmental Protection (2003), and the governments Decree 59/2007/ND-CP, dated April 9, 2007, on Solid Waste Management. On December 17, 2009, the Prime Minister approved the National Strategy for solid waste management until 2025, with a vision toward 2050. The strategy sets the following main tasks: 1. Preventing and minimizing solid waste generation Reducing the governments subsidies in solid waste collection, transportation and treatment; applying various fees accordingly to the amount of the solid waste generated. Minimizing municipal solid waste generation by encouraging sustainable and friendly-environmental consumption and behavior, promoting programs to encourage using recycled products. Reducing industrial waste by implementing Clean and Environmentally Friendly Production Program, namely applying ISO environmental standards at industrial facilities. Minimizing solid waste in trade and services areas Closely monitoring scrap importation Waste separation at source of generation Encouraging community participation in implementing waste separation at the source of generation Developing collection and treatment facilities for different types of waste after separation Increase waste reuse and recycling Encouraging reuse of solid waste Developing solid waste market Developing recycling industry Encouraging to buy and use recycled products Developing incentives measures related to financing, tax and land policy for recycling activities as provided in the Article 68 of the Law on Environment Establishing recycling funds with contribution from the Government, community and enterprises to facilitate R&D activities and recycling Increase waste collection and transportation Increasing capability in solid waste collection and transportation Developing waste collection network Strongly encouraging private sector participation in solid waste collection and transportation Waste Treatment Developing a legal framework for waste treatment Applying appropriate advanced technologies at waste treatment facilities
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2.

3.

4.

5.

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6.

Recover the environment of waste treatment facilities Formulating legal documents, guidelines for implementing this task Raising finance for environment recovery

To implement the Strategy, the Prime Minister also endorsed the following list of programs: List of ten programs to implement the National Strategy for Solid Waste Management until 2025, with a vision to 2050 No Name of Program Objectives Due Date 2020 Ministry in charge MONRE

Solid Waste Prevention, Reduction, Recycling, and Re-use

Develop solid waste prevention, reduction, recycling, and reuse solutions Develop recycling industry Formulate regulations, guidelines on waste separation at source

Waste Separation at Source

2015

MONRE

6 7

Widely replicate model of waste separation at source Investment on Construction Build solid waste treatment of Regional Solid Waste facilities in economic zones Handling Facilities approved by the PM Urban Municipal Solid Build urban municipal solid waste Waste Handling Program treatment facilities in all cities for the Period of 2009-2020 using advanced technology with the aim to minimize waste burying activities Recovery of the Fully address seriously polluted Environment of Solid open dumping sites Waste Handling/Burying Facilities Recover and upgrade sanitary landfills throughout the country Rural/Craft Villages Solid Increase waste management in Waste Management rural and craft village areas Developing Solid Waste Develop country-wide solid waste Database and Monitoring database and monitoring system System in order to increase waste management effectiveness from central to local government Public Education Programs Increase public awareness on to Increase Community waste separation, reduction,

2020

MOC

2020

MOC

2020

MONRE

2020 2020

MARD MONRE

2015

MIC

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Awareness 9 Develop Legal Framework for Solid Waste Management Healthcare Waste Treatment for the Period of 2009-2025

10

reuse, and recycling through education and training programs Develop complete system of standards, regulations, technical guidelines and policies on solid waste management 100% of healthcare waste will be collected and properly treated in 2025

2015

MOC

2025

MOH

It is generally acknowledged that these targets are very ambitious, and meeting them would require greater investment from the government, the private sector, and international donors. Furthermore, in an attempt to provide strong incentives for recycling, reuse and minimizing burying activities, Ministry of Construction (MOC) in coordination with other government agencies has already submitted to the Prime Minister a draft policy to provide subsidies for related projects up to 50% of a treatment cost per metric ton of solid waste. The remaining 50% will be financed with concessional interest rate loans from the Vietnam Development Bank. Market Data Vietnams market for environmental and pollution control equipment and services was estimated to be over $700 million in 2009, with an annual growth rate of 10% - 15% over the next five years. Out of this total, the market for solid waste management is expected to be approximately US$ 150 million. The above figures are unofficial estimates based on total Official Development Assistance (ODA) funding of environmental projects underway and in the pipeline, as well as projects undertaken by urban and industrial entities. Best Prospects Funding for Vietnams environmental projects in general, and solid waste projects in particular, comes from various sources within the state budget, as well as ODA loans and grants. ODA financing plays a key role, with two major donors being the World Bank, and the Asia Development Bank. The World Bank (WB) leads the group of multilateral donors with a commitment of US$2.498 billion for Vietnam in 2010. The Asian Development Bank (ADB) has committed US$1.479 billion in 2010. Whether funded multilaterally or bilaterally, projects funded by ODA offer numerous opportunities for foreign equipment suppliers, engineering and consulting firms. Local production of environmental equipment does not meet market demand, especially the requirements of ODA-funded projects. Vietnam has to import several waste treatment equipment and technologies including landfill equipment, incinerators, and composting
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technologies. To date, most incinerators have been imported from Belgium, Austria, Switzerland, U.K., Spain, and South Africa. Existing incineration facilities are used to treat medical waste, not industrial waste. Composting technologies are mainly imported from Spain, Holland, and the United States. Currently, Vietnam lacks the capability to produce lab equipment that could be used to analyze hazardous/toxic compound samples. Equipment packages over $500,000 are typically procured through international competitive bidding. Among imports, U.S. products and technologies are highly regarded for their high quality.

Key Suppliers
ODA projects funded by World Bank or the Asian Development Bank in Vietnams larger cities, including Hai Phong, Da Nang, Quang Ninh, and Ho Chi Minh, offer significant opportunities for U.S. companies to participate in the international competitive bidding process to supply consulting or equipment for solid waste projects. A number of countries also apply portions of their bilateral development assistance programs to the environmental sector. Typically, companies from the donor countries have a distinct advantage in gaining work on these projects. Over the last three years in this sector, Denmark, the Netherlands, Japan, and France have been the most active countries in financing bilateral aid projects or co-financing multilateral projects. Companies from these countries typically win these contracts. U.S. bilateral aid also has been focused on the waste management sector. Two grants have been approved by the U.S. Trade Development Agency (TDA) to fund feasibility studies in the solid waste sector- one in HCMC and another in Danang with values of $225,000 and $83,000 respectively. A U.S. company, Lemna International Inc., undertook both of these studies. Lemna also implemented a $36 million project to build a solid waste treatment facility in HCMC. The facility uses proprietary technologies to convert 1,200 metric tons/day of solid waste into recycled materials and organic compost for agricultural use. This project was supported by both TDA and the U.S. Overseas Private Investment Corporation (OPIC).

Prospective Buyers
The largest customers for imported solid waste equipment are government-executed, foreignfinanced ODA projects for major cities and provincial towns. Additional buyers include companies that are operating projects funded by the Vietnamese government. Usually the implementing agency for solid waste management projects and concurrently the end-user is the local provincial/city urban environmental company.

Market Entry Strategies

As mentioned above, financing for projects in the environmental sector in general, and the solid waste sector in particular, will continue to come mainly from the ODA sources. Therefore, it is important to maintain contact with ODA sources and Vietnams Ministry of Planning and

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Investment (MPI) as an overall planner of investment projects and coordinator of ODA assistance. Tracking ODA projects includes establishing relationships with implementing agencies, ministries, and project management units at the local level. The main Ministry responsible for the environment in Vietnam is the Ministry of Natural Resources and Environment (MONRE). Additionally, five other ministries including Ministry of Construction (MOC), Ministry of Health (MOH), Ministry of Industry and Trade (MOIT), Ministry of Transportation (MOT), Ministry of Planning and Investment (MPI), and the provincial Peoples Committees (PCs) are also directly involved in waste management activities. Some other ministries have specific roles to play as well.

Market Access Issues & Obstacles

Many U.S. companies set up representative offices and/or distributors/agents to penetrate the Vietnamese market. Local agents and distributors can be invaluable for their existing distribution networks, technical and sales staff, contacts, and relationships with provincial, municipal, and other governmental officials. It is important to provide local agents/distributors with adequate training so that they are able to provide quality after-sales services to buyers. Representative offices initiate marketing strategies and conduct various marketing activities including advertising, business promotion, product knowledge training, and technical seminars and demonstrations. However, representative offices are not allowed to sell goods directly or sign contracts with customers. Representative offices can only identify potential buyers, and negotiate preliminary terms and conditions of sales contracts. State-owned and private companies are allowed to import environmental equipment directly. Import license quotas are applied to some equipment imports in Vietnam. In general, imported environmental equipment is subject to an import tariff and value added tax (VAT). The U.S. waiver of the Jackson-Vanik Amendment to Vietnam in 1998 frees financing support to trade promotion projects, loan guarantees and insurance programs by the U.S. ExportImport Bank (EXIM Bank) and OPIC for American firms doing business in Vietnam. In addition, the TDA has been very active in Vietnam in providing technical assistance, grants for feasibility studies, and orientation visits for projects being pursued by U.S. firms to facilitate market access.

References & Key Contacts

World Bank www.worldbank.org Asian Development Bank www.adb.org
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Ministry of Natural Resources and Environment (MONRE) www.monre.gov.vn www.nea.gov.vn

For More Information

The U.S. Commercial Service in Hanoi, Vietnam can be contacted via e-mail at: Ngo.Anh@mail.doc.gov ; Phone: (84-4) 3850-5199; Fax: (84-4) 3850-5064 or at My.Tran@mail.doc.gov; Phone: (84-8) 3825-0490; Fax: (84-8) 3825-0491, or visit our website: www.buyusa.gov/your_office.

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Disclaimer: The information provided in this report is intended to be of assistance to U.S. exporters. While we make every effort to ensure its accuracy, neither the United States government nor any of its employees make any representation as to the accuracy or completeness of information in this or any other United States government document. Readers are advised to independently verify any information prior to reliance thereon. The information provided in this report does not constitute legal advice. International copyright, U.S. Department of Commerce, 2008. All rights reserved outside of the United States.

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