How is Viet Nam turning textile waste into a strategic opportunity?

When I arrived in Hanoi two years ago, what immediately impressed me was Viet Nam’s energy. On the streets, in factories, and through conversations across the country, I could always sense a strong spirit of movement and an aspiration to move forward. Viet Nam is building, producing, and looking ahead.

This future-oriented mindset is also shaping the way Viet Nam views its economic development pathway. The goal is not merely growth, but also a transition toward higher value-added industries that are more resilient, apply advanced technologies, foster innovation, and promote sustainable development.

Few sectors demonstrate this ambition as clearly as the textile industry. For decades, the sector has made a significant contribution to Viet Nam’s growth, created millions of jobs, and connected the country with global markets. This is a remarkable success story. However, the next chapter will not be defined solely by scale, but by innovation, resource efficiency, and the ability to meet increasingly stringent sustainability standards from international partners.

In practice, this means addressing the industry’s growing “material footprint”, reflected in the increasing volumes of discarded clothing, production waste, and synthetic fibres that do not simply disappear after their first use. Too often, these materials are incinerated, landfilled, or lost within fragmented and informal waste streams. For a country with a large-scale textile industry like Viet Nam, this is not only an environmental challenge, but also a question of how to maximise the value of existing resources and maintain competitiveness in a rapidly changing global market.

Viet Nam has already begun moving in this direction. The Ministry of Industry and Trade, together with industry associations and international partners, has launched collaborative initiatives toward 2030 to promote circular economy models, sustainable production, and energy efficiency in the textile and footwear sectors. This is the right path forward. However, for large-scale recycling operations to function effectively, recyclers need more than just “waste”; they need a stable supply of materials that are properly collected and sorted so they can be reused or recycled.

Here, awareness plays a role that is just as important as the systems themselves.

In many places, when an item is labelled as “waste”, it is immediately associated with pollution or something that must be discarded. Sometimes, such concerns are justified certain waste streams are genuinely hazardous and require strict control. However, clean, sorted textile waste is not the same as hazardous industrial waste. A used polyester garment is not equivalent to dangerous chemical waste. If these distinctions are not clearly understood, public discussions can become inaccurate and unintentionally hinder viable solutions.

Sweden’s experience offers a valuable perspective, not as a blueprint to be copied, but as an example of what can be achieved when materials are recognised for their true value.

In Sweden, a circular textile system is being developed step by step: from dedicated sorting infrastructure and public awareness campaigns to industrial partnerships and innovation ecosystems that help return materials into production cycles. Today, artificial intelligence-based sorting systems developed by organisations such as Wargön Innovation and RISE can automate labour-intensive processes while identifying which textiles are suitable for reuse or recycling. Large-scale facilities such as Siptex enable efficient fibre separation, while technologies such as Södra’s cotton-polyester separation process are helping brands like Lindex create more sustainable products.

These examples do not mean that Sweden has solved every challenge. Textile recycling remains a technically complex and commercially demanding field, even in a country with advanced infrastructure. However, they demonstrate an important lesson: when textiles are viewed as a resource rather than a problem to be managed, innovation follows.

This is why some of the most notable developments today are not only taking place in Sweden, but are increasingly emerging through partnerships with Viet Nam.

One particularly promising example is Syre, a Swedish textile impact company backed by H&M Group and Vargas. In April 2025, Syre signed a memorandum of understanding with Bình Định Province to develop what aims to become Viet Nam’s first large-scale textile-to-textile recycling plant, with a total investment of up to US$1 billion. According to the company, Viet Nam was selected due to its strategic position in the global textile supply chain, long-standing industrial expertise, and skilled workforce. The plant is expected to produce large volumes of high-quality recycled PET pellets annually while creating hundreds of jobs. This is not a small pilot project, but a major commitment and a clear demonstration of confidence in Viet Nam’s industrial future.

Syre’s vision aligns particularly well with Viet Nam’s development trajectory. The project creates opportunities for new industries in collection, sorting, processing, advanced materials, and circular design, while reducing environmental pressures by lowering water and energy consumption as well as pollution. It contributes to promoting green exports, strengthening supply chain resilience, and positioning Viet Nam not only as a manufacturing hub, but also as a potential leader in the circular textile economy.

At the same time, the project will help businesses meet growing demand from international partners for low-impact materials and more transparent supply chains. This provides Viet Nam with an opportunity to move further up the value chain — from garment processing and manufacturing toward high-value circular textile production — while fostering innovation in recycling and materials development, in line with the country’s National Green Growth Strategy.

This trend is already becoming evident in the market. Syre has been selected by Nike as a leading strategic supplier of textile-to-textile recycled polyester, demonstrating both the commercial viability and the growing global demand for these solutions.

What is needed now is a framework that enables pioneering initiatives to develop responsibly. Syre has outlined key conditions for its investment: appropriate industrial infrastructure, access to green energy, a stable supply of recyclable textile materials, and a pilot mechanism allowing the import of such materials from neighbouring countries. This points to a clear policy direction.

Viet Nam does not need to lower its environmental standards; on the contrary, it must remain committed to maintaining them. However, an effective regulatory system should also create space for responsible innovation. A modern framework can achieve both objectives: protecting people and the environment while supporting high-standard industrial recycling.

Syre’s large-scale recycling facility demonstrates what can be achieved when innovation, investment, and policy come together. With the right combination of industrial ambition, responsible investment, and a supportive regulatory framework, Viet Nam can transform textile waste from a burden into a valuable resource. Put simply, this is not only about helping Viet Nam manage waste better, it is also about helping Viet Nam compete more effectively. This is precisely why Sweden is particularly interested in strengthening cooperation with Viet Nam in this field.

The question is no longer whether Viet Nam should recycle, but whether it will seize the opportunity to turn waste into wealth, jobs, and green growth.

Sweden stands ready to accompany Viet Nam on this journey.