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Plastics make a vital contribution to the Vietnamese economy. Plastics are commonly used in a wide range of industries in the country, including packaging, consumer goods, electronics, automotives, aviation, textiles, and agriculture. In 2019, Vietnam¡¯s plastics industry produced 8.89 million tonnes of products, and the industry contributed an estimated US$17.5 billion to the national economy, representing 6.7 % of GDP.

However, mismanaged plastics waste has serious economic, environmental, and social consequences. Asia is responsible for more than 80 % of plastics leakages into marine environments, with eight out of the top 10 contributing countries from this region ¨C with Vietnam ranking fourth globally, according to some estimates.

Recognizing that plastics pollution is a serious emerging issue, Vietnam has set ambitious national plastics waste management goals to combat the economic and environmental consequences of such waste nationally. This market study uses a plastics value chain approach to evaluate Vietnam¡¯s plastics recycling industry and its role in supporting a circular economy. It identifies major challenges, market drivers and opportunities for scaling-up recycling efforts via targeted public and private sector interventions.

The key plastic resins assessed in this study are: Polyethylene Terephthalate (PET), Low Density Polyethylene (LDPE), High Density Polyethylene (HDPE) and Polypropylene (PP).

KEY FINDINGS

Vietnam recycled about 33% of key plastics resins in 2019.

About 75%  of the material value of the key plastics resins ¨C approximately US$2.2 billion to US$2.9 billion per year ¨C is lost in Vietnam when 2.62 million tonnes are disposed of annually rather than recycled into valuable materials.

Several structural challenges cause a market failure for plastics recycling:

• Lack of sustained local demand for recycled plastics across all key resins
• Gaps in domestic recycling capacities, inconsistent and at-risk supply from the informal sector and reliance on higher quality scrap imports
• Low quality recyclables due to a lack of ¡°design for recycling¡± standards
• Lack of access to financing for recyclers
• Lack of a waste management system that prioritizes collection and disposal over recycling.

During the ongoing COVID-19 pandemic, these challenges have amplified in the form of declined supply to the recycling industry due to changes in consumption patterns and a significant reduction in demand for recycled products resulting from low oil prices and the economic slowdown.

RECOMMENDED INTERVENTIONS AND ACTIONS