Vietnam Tightens Environmental Regulations with New EPR Rules

On January 6, 2025, the Vietnamese government introduced Decree 05/2025/ND-CP (Decree 05), marking a significant update to the country’s environmental regulations. The decree, which took effect immediately, brings important changes to the Extended Producer Responsibility (EPR) framework under the Law on Environmental Protection 2020 (LEP 2020).

These changes directly affect how businesses handle waste management and recycling in Vietnam. Here’s what you need to know.

On January 6, 2025, the Vietnamese government introduced Decree 05/2025/ND-CP (Decree 05)

1. What’s New in Decree 05?

1.1. Wider Scope for EPR Obligations

Previously, only manufacturers and importers of specific products were held responsible for EPR. Decree 05 expands this to include organizations and individuals managing product quality and labeling in Vietnam. This adjustment clarifies who is subject to EPR and exempts entities like import service providers.

The decree also revises exemption rules:

• Producers and importers with product sales revenue below VND 30 billion are now exempt, an increase from the prior threshold of VND 20 billion for importers.

• A new exemption rewards businesses that reuse packaging at or above mandatory recycling rates, encouraging sustainable practices.

1.2. More Flexibility in Recycling Calculations

Decree 05 adds new scenarios where recycling doesn’t count toward mandatory rates. For example, waste from production processes or defective products can now be excluded, giving businesses more flexibility in meeting targets.

1.3. Clearer Rules for Recycling Partnerships

For businesses outsourcing their recycling, confusion about qualifying recycling units has been addressed. Decree 05 specifies that these units must hold valid environmental permits, providing a clear framework.

The rules for working with authorized recycling organizations have also been tightened. These intermediaries must now oversee recycling operations fully and can’t pass on responsibilities without permission.

To streamline transparency, the Ministry of Natural Resources and Environment will publicly list approved recycling entities within five working days of a request.

Decree 05 specifies that these units must hold valid environmental permits, providing a clear framework.

1.4. Focus on Action Over Financial Contributions

Decree 05 emphasizes direct recycling efforts over financial contributions to the Vietnam Environmental Protection Fund. This change comes as businesses and authorities struggle to agree on contribution costs.

To simplify the process, financial contributions, if chosen, must now be paid in one installment by April 20 each year, replacing the earlier two-payment system.

1.5. Financial Support Mechanisms Removed

Businesses hoping for financial aid for recycling activities will need to wait. Decree 05 eliminates the current system for requesting support from the Environmental Protection Fund. Instead, the government plans to introduce new guidelines in the future.

2. What Should Businesses Do?

 

If your company operates in Vietnam, here’s how you can adapt to the new rules:

2.1. Check Your Obligations: Determine if your business falls under the new EPR rules or qualifies for exemptions.

2.2. Prioritize Recycling: Focus on organizing recycling efforts rather than relying on financial contributions, as the process remains unclear.

2.3. Update Permits: Ensure your environmental permits are up to date and meet the new standards.

2.4. Stay Alert: Monitor updates from authorities and consult experts to navigate these complex changes.

 

Decree 05 signals a stronger push toward sustainability and accountability for businesses in Vietnam

Decree 05 signals a stronger push toward sustainability and accountability for businesses in Vietnam. While the new rules may require some adjustment, they also offer opportunities to adopt greener practices and build a more sustainable future.

For questions or further assistance, reach out to environmental law experts like Ms. Nguyen Mai Phuong or Ms. Chu Thi Giang from KPMG Law in Vietnam.

This article aims to provide general information and does not substitute for professional legal advice.

 

Edited by Luu Hana

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