Agricultural by-products pave the way into green export markets

A major opportunity

Rice husks and sugarcane bagasse are no longer treated as waste left behind after harvest. Instead, they are becoming feedstocks for biodegradable plastic pellets, materials that can fully decompose and replace conventional plastics in a wide range of single-use products.

Mr. Doan Van Tung, Chief Executive Officer of iGreen Development Technology JSC, a company specializing in biodegradable plastic pellets and compostable packaging, said the company recognized a significant opportunity in Viet Nam's generation of millions of tonnes of agricultural by-products each year, most of which remain underutilized.

“We realized that enormous quantities of agricultural residues are being wasted, while the world is increasingly tightening restrictions on conventional plastic products. If these resources can be regenerated into new materials, they can not only reduce environmental pressure but also create additional value for agriculture,” Mr. Tung said.

According to experts, utilizing agricultural by-products also helps reduce the widespread practice of open-field burning after harvest, a major source of greenhouse gas emissions and air pollution in many rural areas. This approach is also aligned with Viet Nam’s efforts to promote a circular economy in agriculture and the processing industry.

In 2012, iGreen began researching this business model and officially put its manufacturing plant into operation in 2019. Materials such as sugarcane bagasse, rice husks and bamboo powder are processed into biodegradable plastic pellets, which are then supplied to manufacturers producing packaging, trays, spoons, forks and other single-use items.

Currently, most of the company’s products are exported to North America, with the United States and Canada accounting for about 60% of its market share. According to Mr. Tung, the company’s output is growing by approximately 40% annually, reflecting rapidly increasing international demand for sustainable materials.

“We do not manufacture finished products ourselves. Instead, we supply raw materials to other businesses. This allows the value chain to expand much more quickly,” he said.

According to Mrs. Vu Kim Hanh, Chairwoman of the High-Quality Vietnamese Goods Business Association, Viet Nam possesses abundant agricultural by-products, yet much of this resource is either discarded or sold in raw form at low value.

“We cannot continue competing by exporting raw materials alone. What matters is recycling and innovation to increase the value added of Vietnamese agricultural products,” Mrs. Hanh said.

The long road ahead is not easy

According to Mr. Tran Viet Anh, Chairman of the Viet Nam Waste Recycling Association, agricultural by-products are in fact a valuable resource, but one that is difficult to utilize without stable supply chains and advanced processing technologies.

Mr. Viet Anh noted that many countries have moved ahead of Viet Nam in developing industries based on the recycling of agricultural residues. In Japan, rice straw is compressed into biodegradable packaging for export, while in Europe, fruit peels and nut shells are used to manufacture cosmetics and bio-based materials.

“The global trend today is to reduce reliance on conventional plastics and increase the use of bio-based materials. Major corporations are willing to pay a premium for environmentally friendly products. This presents a tremendous opportunity for Viet Nam’s agricultural by-products,” he said.

However, businesses say the biggest challenge remains production costs. Bio-based products remain significantly more expensive than conventional alternatives, even as consumers continue to prioritize affordability.

“Some green products cost two to two-and-a-half times more than conventional products. Consumers support them in principle, but when it comes to purchasing decisions, cost remains a major consideration,” Mr. Doan Van Tung said.

In addition to pricing challenges, international standards and certification requirements also place considerable pressure on green businesses. To obtain certification for biodegradability, companies must undergo testing and verification processes that can take about a year and cost billions of Vietnamese dong.

Experts believe that as global markets increasingly favor sustainable consumption, agricultural by-products could become a key feedstock for Viet Nam’s emerging bio-based industries. However, turning “waste into wealth” will require stronger support mechanisms, including access to finance, technology, green certification systems and more systematic planning of raw-material supply zones.

Viet Nam generates approximately 156-159 million tonnes of agricultural by-products each year. However, only about 10-35% of this volume is currently utilized. Meanwhile, markets such as Europe, Japan and North America are increasingly demanding bio-based and environmentally friendly products. This is widely seen as an opportunity for Viet Nam to develop a circular-economy-based agricultural by-product recycling industry and expand its green exports.