Promoting Green Innovation in Vietnam

16/05/2024

TN&MTIn recent years, green innovation, a key focus for Vietnam, has been reflected in national development strategies, government action plans, international cooperation activities, investment attraction, as well as scientific and technological research.

Promoting Green Innovation in Vietnam

According to the Global Innovation Index (GII) ranking published by WIPO in 2022, Vietnam ranked 48th out of 132 countries/territories, maintaining its outstanding performance for the 12th consecutive year and retaining its position as one of the top 3 innovative economies among countries/territories with low to middle incomes. 

Green growth and sustainable development have also been goals for Vietnam for many years. At the UN Climate Change Conference (COP26) in 2021, Vietnam made a strong commitment to the international community to achieve net-zero emissions by 2050 and to phase out coal-fired power plants, replacing them with renewable energy resources and clean energy.

In Vietnam, the Resolution of the 13th National Party Congress outlined the direction of "building a green economy, an environment-friendly circular economy." The 10-year socio-economic development strategy (2021-2030) emphasized the development of a circular economy model to drive innovation and improve labor productivity, contributing to green growth and innovative growth models. On June 7, 2022, the Prime Minister issued Decision No. 687/QD-TTg approving the Circular Economy Development Plan in Vietnam. The goal of circular economy development is to drive innovation and improve labor productivity, contributing to green growth by restructuring the economy and innovating growth models towards enhanced efficiency and interconnection between enterprises and economic sectors, enhancing the competitiveness and resilience of businesses and supply chains against external shocks, contributing to achieving economic prosperity, environmental sustainability, and social equity, aiming for a green economy, carbon neutrality, and contributing to the goal of limiting global temperature rise.

The action plan to implement Vietnam's sustainable development goals (SDGs) by 2030 in the field of natural resources and environment was issued by the Ministry of Natural Resources and Environment in Decision No. 3756/QD-BTNMT dated December 13, 2018. To successfully achieve the SDGs of the natural resources and environment sector by 2030, the action plan sets out 17 objectives divided into 6 groups of areas, accompanied by 40 specific indicators for monitoring and evaluating the progress. The schedule for implementing these SDGs is stipulated according to the timeframes for implementing the national SDGs as well as those of the United Nations in 2020, 2025, and 2030.

Encouraging appropriate innovations will require utilizing many incentives that affect both investment costs and revenues which poses both opportunities and challenges, with significant pressure to balance economic growth and environmental protection, preserving nature, and conserving biodiversity.

Global Green Innovation Trends

Green innovation is an approach to drive development in countries around the world. Implementing green innovation will be a strong catalyst for expanding markets and fostering sustainable economic development.

As a pioneer in green development policies, Germany is one of the first countries to reduce greenhouse gas emissions: in 2009, CO2 emissions was reduced by 23% compared to 1990 levels; energy consumption from renewable resources increased fivefold from 1990 to 2010. Germany currently has the world's largest solar energy capacity and is a shaping force for sustainable development in Europe, a center for addressing environmental issues: it has been gradually phasing out nuclear power. Currently, renewable energy resources account for 1/10 of total electricity consumption, mainly from biomass (7.7%), wind power (1.5%), and hydropower (0.8%). Germany's solar photovoltaic capacity currently accounts for 44% of the world's total and is the third-largest wind power capacity in the world, after China and the United States. Germany considers green growth technology as a leading export product in the future and sets ambitious goals. Germany also plans to reduce greenhouse gas emissions by 80% by 2050, compared to 1990 levels. Renewable energy sources are established to supply 60% of total energy consumption. Policy planners, businesses, and consumers in Germany may consider environmental policies as a means to promote economic growth.

In 2016, Japan announced the "Long-term Strategy for Green Technology Innovation"; the Japanese Cabinet Office released a draft "Energy/Environment Innovation Strategy" at the fourth meeting of the Energy/Environment Innovation Strategy Research Group on March 24, 2016. Related to next-generation energy production, the strategy aims to double conversion efficiency and reduce electricity production costs to 7 yen/kWh or lower.

South Korea's Green Growth Strategy encompasses a range of investment strategies in CO2 reduction technologies recognized internationally (such as in the IEA Blue Map). 27 main green technologies has been identifled and intensely invested by South Korea’s government. The list includes many items related to IT, which demonstrates that information technology has been considered a green technology; many smart IT-based technologies will contribute to resource and energy savings. After selecting these green technologies, the South Korea’s  government has increased investment in green research and development (R&D), aiming for an average annual increase of 18.3% in green technology R&D investment. This shows that the South Korea’s government has developed green technology significantly.

Green Innovation Renewal in Vietnam

Vietnam has committed to achieving carbon neutrality by 2050. To accomplish this goal, Vietnam is gradually restructuring its energy system towards increasing the proportion of renewable energy and reducing fossil fuels. Science, technology, and innovation have been identified as the main solution. Vietnam's recent policies, mechanisms, and solutions have been focused on improving the business environment, promoting creative entrepreneurship, and developing industries and sectors, empowering businesses to leverage the strong advancements of science and technology, especially the Fourth Industrial Revolution."

Policies have been implemented to develop the green innovation market, including environmental standards policies, product standards (13 Vietnamese regulations, 59 Vietnamese environmental standards); climate policies (National Action Plan on Green Growth; supporting regulations for energy efficiency); supporting policies for green production and consumption (National Sustainable Production and Consumption Action Program for the period 2021 - 2030; the Law on Environmental Protection (2020) regulating green procurement, circular economy, extended producer responsibility; Vietnam Green Label Program encouraging businesses to design and produce environmentally friendly products; current Corporate Income Tax Law stipulating various incentives, encouraging green innovation businesses, aiming for green growth,... Alongside climate and environmental protection policies, Vietnam’s Government is developing and implementing policies to develop a digital economy and digital society. It aims to achieve a digital economy accounting for 20% of GDP by 2025 and 30% of GDP by 2030.

Currently in Vietnam, the startup innovation ecosystem has formed and developed rapidly, diversely comprising 79 technology incubators and enterprises, 40 startup acceleration organizations, 138 universities with creative spaces for student startups, 291 industrial parks, and 4 national high-tech zones.

In addition, in Vietnam, there are several prominent programs promoting green innovation, including:

-    Green Innovation Fellowship: seeking, promoting, and applying green innovation solutions, fostering sustainable development for Vietnamese businesses and the region.

-    Green Growth Show 2023: showcasing over 100 technologies from organizations and enterprises, providing energy-saving solutions, recycling materials, and environmental protection services.

-    Net Zero Challenge: seeking technological solutions to combat climate change and achieve sustainable development goals.

-    Vietnam Circular Economy Network: designed as a public-private partnership, aiming to transition towards a circular economy in Vietnam, promoting green innovation among small and medium-sized enterprises (SMEs).

Solution to promote green innovation in Vietnam

Innovating technology towards green economic development is the right direction and aligns with the current development trend of the country, delivering long-term effectiveness for the green economy transition amid increasing integration with the world.

To develop a sustainable nation, green technology will be the determining factor for economic growth and promoting sustainable development. Accordingly, the following solutions can be applied to promote green innovation in Vietnam:

Firstly, there is a need to prioritize efforts in raising awareness, disseminating laws, educating, and enhancing understanding of green innovation within the community. This includes developing and implementing communication campaigns, organizing competitions, exhibitions, and seminars on green innovation, integrating green innovation into education and training, creating instructional materials, and timely rewarding and commending organizations and individuals who have achieved success in applying green innovation.

Secondly, focus on perfecting the legal framework and system of policies supporting green innovation (with particular emphasis on leveraging the role, effectiveness, and efficiency of policy tools stipulated in environmental protection laws and related legislation), including regulations on standards, technical specifications; policies on taxation, finance, investment; market and consumer policies; policies on education, training, research and development; environmental industry development policies for products, equipment, and technologies serving green innovation implementation, as well as other policy instruments and policies encouraging collaboration between sectors, industries, and localities in green innovation implementation.

Thirdly, it's essential to promote innovation, enhance research, and apply the achievements of science and technology and the Fourth Industrial Revolution (Industry 4.0) and digital transformation, coupled with the application of green innovation right from the design, manufacturing, distribution, consumption, collection, recycling, and reuse of waste stages. This involves establishing more and more value-added, efficient, and environmentally friendly value chains.

This involves focusing on guiding eco-design, designing for the application of green innovation transformation in potential sectors such as agriculture, forestry, fisheries, mining, and energy; processing and manufacturing industries (food, textiles, chemicals, electronics, etc.); industrial parks and urban areas. In particular, priority should be given to implementing technologies in waste management, considering waste as a resource in all production and business processes; gradually developing markets for products, services related to green innovation, and circular economy (secondary raw materials, eco-design services, etc.); developing an increasing number of advanced and exemplary models in practice.

Fourthly, enhance the efficiency and restructuring of the state budget towards sustainability, continue implementing credit policies, and state interest support for programs and projects related to environmental protection; intensify the restructuring of public investment, make breakthroughs in building synchronized, modern, green, and environmentally friendly infrastructure and urban areas; remove barriers to green investment by simplifying procedures, supporting risk management, developing skills, and experience in green projects; develop green sustainable financial instruments.

Fifthly, encourage international cooperation in green innovation, including participation in forums, networks, and initiatives on green innovation; mobilize resources from international and non-governmental organizations; exchange experiences and learn from successful models from advanced countries in green innovation.

In addition to the central role of government agencies, local authorities, and businesses in promoting green innovation and the circular economy, attention should also be paid to political and social organizations, professional associations, and industry associations.

In the context of dwindling resources, declining biodiversity, increasing environmental pollution, and climate change, many countries are choosing Green Innovation as a new development model to simultaneously address these complex ongoing issues. This new model recognizes the value and role of investing in natural capital, creating green jobs, and encouraging the efficient use of resources and energy.

Assoc Prof. Sc.D Nguyen Xuan Hai

Director General of the Department of Science and Technology, Ministry of Natural Resources and Environment

(Published in Specialized Issue of Science and Technology Journal 2/2023)

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