Identifying circular economy as driving force for green transition

This message was also underscored throughout the thematic session titled "Promoting Green Transition and Developing a Circular Economy to Realize High Growth and Sustainable Development Goals," held on December 16 within the framework of the Vietnam Economy in 2025 and Prospects in 2026 Forum (VEPF).

A pathway to breakthrough growth

According to Mr. Pham Dai Duong, Deputy Head of the Central Commission for Policy and Strategy, Viet Nam's economy is facing the imperative to create a breakthrough in renewing its growth model to realize the Party's 100-year strategic goals. Accordingly, Viet Nam strives to become a developing country with modern industry and upper-middle income by 2030 and become a developed, high-income nation by 2045. To achieve these objectives, economic growth during the 2026–2030 period and the following years will need to reach double-digit levels.

The new growth model does not focus solely on speed but must simultaneously ensure sustainability, comprehensiveness, and inclusiveness while emphasizing quality, efficiency, and the long-term competitiveness of the economy. This model is shaped by the synchronous implementation of four revolutionary shifts, including digital transformation, green transition, energy transition, and the transformation of the structure and quality of human resources.

Of which, digital transformation generates speed and intelligence, helping to overcome physical constraints, enhance labor productivity, and form digital economic sectors with high added value. The green transition delivers sustainability and humanity, safeguarding the environment and social welfare while avoiding the trade-off of a long-term future for short-term growth benefits. These two processes do not exist in isolation, but they are closely intertwined and integrated within a "dual transition."

Mr. Pham Dai Duong emphasized that as a driving force of the green transition in the digital era, the circular economy, closely linked with science and technology development, innovation, and digital transformation, has been identified as a strategic pillar of the new growth model and a strategic key enabling Viet Nam to seize opportunities for breakthrough advancement.

A circular economy allows raw materials to be utilized before disposal, extending their life cycles and enabling recycling or reuse for other purposes. As a result, the value of materials is retained longer within the economy, opening up high value-added sectors such as recycling, ecological, and renewable energy industries. This approach not only helps reduce input costs but also attracts high-quality green capital flows, creates new development space, and contributes to maintaining rapid yet sustainable growth.

Removing institutional bottlenecks and unlocking resources for green transition

From a state management perspective, Deputy Minister of Agriculture and Environment Le Cong Thanh noted that correct policy orientations have begun to give positive signals. The trend toward greening production and consumption is spreading, becoming a key driver of the economy’s green transition. In agriculture, traditional production models are gradually shifting toward low-emission ecological agriculture, while many enterprises and cooperatives have applied high technologies to control pollution and improve productivity and product quality.

However, Viet Nam's green transition still faces numerous challenges. Traditional production and farming practices remain widespread, and the application rate of international sustainability standards is still low. The current structure of green investment is also unbalanced, mainly focusing on energy and agriculture, while other critical fields, such as waste management, biodiversity conservation, and transitional industries, still lack resources.

To further accelerate the green transition and the development of the circular economy, the Ministry of Agriculture and Environment has identified several strategic breakthroughs for the coming period. The focus will be on continuing to closely link socio-economic development with environmental protection, viewing spending on environmental protection and green transition as an investment in development, and promoting the "economization" of the environment through resource pricing, payments for ecosystem services, and the effective use of environmental taxes and fees.

At the same time, breakthroughs in institutions and policies will be pursued by completing bylaws, removing administrative barriers, and creating a legal corridor for new markets such as the carbon market and biodiversity credits. The circular economy will continue to be vigorously promoted, with waste regarded as a resource and managed in a digital environment, while encouraging research and development of environmentally friendly technologies, environmental industries and services, green procurement, and renewable energy. The sector also aims to accelerate the application of artificial intelligence and big data in resource management, environmental monitoring, disaster forecasting, and waste treatment while investing in infrastructure to serve ecological agriculture and the green economy.

From an international perspective, Ms. Francesca Nardini, Deputy Resident Representative of the United Nations Development Programme (UNDP) in Viet Nam, stated that over the past three decades, material consumption in Viet Nam has increased sharply, placing significant pressure on energy, infrastructure, solid waste, environmental pollution, and long-term climate change. This underscores the need for Viet Nam not only to minimize negative impacts but also to more strongly promote the circular economy.

Based on global experience and practice in Viet Nam, the approach needs to be focused and practical, implemented through pilot models to assess risks, opportunities, and benefits. Regarding sectors with enormous potential for circular economy deployment, UNDP identifies agriculture and the agri-food sector as the top priority, contributing approximately 11.6% of GDP and 26% of total employment, with an annual output of 100–105 million tons of agricultural products. The sectors are followed by the energy sector, which contributes about 4% of GDP and provides jobs for nearly 4 million workers. In addition, sectors such as plastics, textiles and garments, electronics, and beverages, which account for up to 60% of landfill waste, also hold substantial potential if they transition from linear to circular models.

In practice, the circular economy currently accounts for only a small share of Viet Nam's economy. With vast untapped potential and growth pressures, stronger action is required to turn the circular economy into a development strategy capable of attracting investment flows toward a future of green, sustainable, and inclusive growth.