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19 December 2024

Vietnam's Transition To Green Industrial Zones Faces Major Hurdles

Experts call for strategic pathways and legal frameworks to support sustainability goals.

Green industrial zones are becoming increasingly important as part of the global trend toward sustainable development, but the transformation poses substantial challenges, as emphasized during the Vietnam Industrial Zones Forum held on December 19, 2024.

Nguyễn Chí Toàn, Deputy Chairman of the Viet Nam Industrial Real Estate Association (VIREA), discussed the pressing need for clarity in the pathways to achieve these green transformations. He noted, "The green industrial zone is the inevitable trend, but it must have suitable pathways and intelligent transformation" (Original quote in Vietnamese: "Chuyển đổi khu công nghiệp xanh cần phù hợp năng lực, có lộ trình").

The importance of transitioning from traditional industries to greener models is underscored by Vietnam's commitments alongside 150 other countries to achieve net-zero emissions by 2050. This ambitious goal includes reducing methane emissions by 30% by 2030. To meet these expectations, Vietnam is increasingly aware of the global demand for environmentally friendly industrial practices.

Currently, the nation has made strides, with 416 industrial zones covering over 89,000 hectares, yet only 296 of these zones are operational, with occupancy rates above 72%. Despite this progress, the challenges remain significant.

TS Bùi Thanh Minh, Deputy Director of the Private Economic Development Research Office (Ban IV), asserted the necessity for supportive measures from the government to facilitate this transition: "We must support companies with comprehensive and effective assistance to facilitate their transition to green operations," emphasizing the need for cooperative efforts.

Hoàng Tuấn Anh, CEO of Shinec, shared insights on the advantages of the circular economy model within industrial zones, stating, "Investment costs for developing green industrial zones are significant, requiring considerable time to recover costs" (Original quote in Vietnamese: "Những khoản đầu tư này không chỉ lớn mà còn yêu cầu thời gian dài để hoàn vốn"). This highlights the financial burden faced by companies as they navigate through necessary upgrades and innovations.

The shifting dynamics call for improved laws and policies to enable sustainable practices. Phan Đức Hiếu, Permanent Member of the Economic Committee of the National Assembly, noted, "The government has plans to develop laws on industrial zones, which are necessary for development." This reflects the strong advocacy for comprehensive legal frameworks to support the green transition.

While the move to greener industrial zones is deemed inevitable, the pace and efficacy of transformation are contingent upon overcoming various hurdles, including outdated regulations and inconsistent policies. The motivation to transition exists, but it must be met with informed strategies and policy support.

The shift toward environmental sustainability and reduced carbon footprints is not merely about compliance with international standards but also about improving the industrial competitiveness of Vietnam and attracting foreign investments, particularly from states with rigorous environmental standards like Japan, South Korea, and EU member nations.

For Vietnam's industrial zones, the path forward is clear—the need to embrace green transformation is urgent, yet achieving success requires coordinated efforts across several fronts: corporate innovation, policy support, and community engagement. These elements are interconnected through the overarching goal of sustainable industrial development.

A collective ambition is necessary among stakeholders—government bodies, industrial leaders, and communities—each playing their part to pave the way for Vietnam's green industrial future. The transformation from conventional to green industrial zones is not merely desirable; it is imperative for the nation's long-term economic viability and environmental stewardship.

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