The Cần Giờ mangrove forest, a vital "carbon sink" ecosystem, contributes to generating the credits needed to fuel Việt Nam's carbon market. VNA/VNS Photo

HÀ NỘI — As Việt Nam is shifting towards a green and circular economy to maintain competitiveness and participate effectively and sustainably in global value chains, experts emphasised that a sufficiently clear and efficient legal environment is needed to create momentum for businesses to make the transition.

Legal gaps remain on the path to transition

Thăng Long Plastics JSC is one of the partners of Mainetti, a group specialising in hanger solutions for the textile and garment industry. The company exports hangers to the US and Europe and then imports them back into Việt Nam under a reuse model, limiting the recycling of waste that could harm the environment.

Although the materials used to manufacture the hangers are 100 per cent Vietnamese, the company faces difficulties when importing them back due to a lack of appropriate mechanisms.

If they are classified as used plastic products, their import is prohibited. If they are classified as scrap, an environmental licence is required. This will certainly affect not only this industry but many others as well. The question is how the State can introduce policies to remove legal barriers and enable businesses to carry out such activities, said Lê Hoàng Long of Thăng Long Plastics JSC.

Without clear criteria for by-products, secondary raw materials and when waste ceases to be classified as waste, regulators fear the risks while businesses are reluctant to invest.

Nguyễn Hữu Thập, Vice Chairman of the Việt Nam Association of Business Legal Affairs, said this demonstrates how the circular loop is broken at the boundary between "waste" and "resource".

There is also a risk that procedures will become "greener" on paper rather than the economy itself becoming greener. EPR, greenhouse gas inventories, the carbon market, ESG, supply-chain standards and export requirements all require data. If each agency requires a separate form, platform and inspection, the green transition will become another layer of compliance costs, he pointed out.

For businesses, Thập said, time is a cost, procedures are a cost, and a lack of clarity is an investment risk. If going green means having to obtain more permits, borrow at higher costs and bear greater legal risks, institutions are sending the opposite signal to the one needed for the transition.

Building coherent institutional ecosystem for the green economy

Việt Nam has introduced the Law on Environmental Protection, the Green Growth Strategy, schemes on the circular economy, the Just Energy Transition Partnership (JETP), green taxonomy, green credit and a carbon market.

The year 2026 marks a shift towards putting green economic models into practical operation. Meanwhile, the carbon exchange has begun operating, while outstanding green credit stands at around VNĐ828.8 trillion (US$31.87 billion). The European Union's Carbon Border Adjustment Mechanism (CBAM) has also entered its definitive phase.

However, many experts say legal provisions on the green economy and circular economy remain fragmented. The lack of links between environmental regulations and those governing investment, land, construction, energy, taxation, technical standards and contracts makes it difficult for businesses to identify appropriate solutions.

Provisions on tax, land and credit incentives for circular-economy projects largely refer to specialised legislation, but the corresponding regulations needed to put such incentives into practice remain incomplete. As a result, the number of projects actually receiving meaningful incentives that are attractive enough to alter businesses' investment behaviour remains limited.

Meanwhile, the carbon market requires further legal development regarding the legal status of carbon credits and emissions allowances, as well as their ownership, transfer, use of collateral and the settlement of disputes.

Assoc. Prof. and Dr Ngô Trí Long of the Việt Nam Financial Consulting Association proposed reviewing legislation across the entire chain of economic activities to identify and address key points of intersection in support of the green and circular transition in a consistent manner, preventing legal gaps and enabling waste to genuinely become a resource.

This should be accompanied by an "audit of green administrative procedures", he added.

The Việt Nam Association of Business Legal Affairs proposed establishing the principle of "one green project, one data set, one focal point and one inspection plan"; creating a legal framework for qualified materials to re-enter production; turning green taxonomy into a "passport" for accessing resources; and building a national green data platform based on the principle that businesses report information only once.

Nguyễn Văn Cường, Director of the Institute of Legal Strategy and Science under the Ministry of Justice, said institutions must make green choices economically beneficial. Businesses cannot sustain the green transition through appeals alone.

The law must gradually give effect to the principle of internalising environmental costs while harmonising administrative and economic instruments with market-based mechanisms. The national green taxonomy should truly become a "common language" for the State, banks, investors and businesses to determine what constitutes a green economic activity, thereby directing capital to the right areas while limiting greenwashing. — VNA/VNS