Environmental Industry and Energy Efficiency: Historical Market Barriers

Historical policy discussion. This article reflects the development context described around the 2013–2014 Vietnam–Japan industrialization strategy and forecasts through 2020. Statements about pending policies and market size are historical.

Demand for environmental services

More than 1,000 businesses worked in environmental industry, energy audits and energy efficiency, despite the sector being identified as a development priority.

It cited projections of approximately 59,000 tonnes of daily municipal solid waste from qualifying urban areas by 2020. Industrial zones were associated with estimated wastewater of 25–30 m³ per hectare per day and solid waste of 200 tonnes per hectare annually. Medical waste was described as growing by about 7.6% per year.

Major treatment gaps included overall solid-waste capacity at roughly one-third of demand, hazardous-waste treatment near 14% and compliant urban wastewater treatment at only 2–3%. These are figures from the old report, not current national indicators.

Investment needs and opportunity

Environmental investment needs across 16 sectors were estimated at more than USD 7.6 billion by 2020. Signed environmental ODA in 2010–2014 totalled approximately USD 2.9 billion, including USD 58 million in grants and the remainder in concessional loans.

Potential projects included municipal wastewater plants, waste sorting, composting, energy recovery, hazardous-waste treatment and recycling of plastics, oils, electronics and end-of-life vehicles.

Energy audit and efficiency services

The report identified opportunities in energy-intensive steel, paper, cement and ceramics production. It also highlighted efficient lighting, electronics and refrigeration, together with emissions-reduction projects in breweries, seafood processing and buildings.

Barriers described by industry representatives

• Incomplete policy and incentive mechanisms at the time of the report.
• Weak links between manufacturers and component suppliers.
• Limited demand for supporting products and services.
• Constraints in technical capability and competitiveness.
• Insufficient willingness to pay for environmental services and inconsistent enforcement.

Nguyen Van Tai emphasized the need for effective environmental management to support a viable market. Do Huu Hao of the Vietnam Environmental Industry Association called for complementary support through finance, land and infrastructure, workforce training, information access and technology transfer.

Implications for project development

Technical need alone does not guarantee a viable project. Clear service requirements, reliable revenue, suitable technology, financing and capable operators all matter. Current programmes and incentives must be checked separately from the historical strategy discussed here.