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Every year, Vietnam throws away 2.62 million tonnes of usable plastic. PET bottles, milk jugs, food tubs, packaging film. Not littered, not lost at sea. Collected as waste, then buried or burned. The World Bank values what is destroyed in the process at $2.2 billion to $2.9 billion a year.
That is the part people quote. The more uncomfortable part is that Vietnam is not bad at recycling. It recovers about a third of its main plastic resins, which is respectable for a country at its income level. It has a real recycling industry, a real collection network and, since 2024, a real producer-pays law.
So the failure is not capacity, and it is certainly not public discipline. It is a formula.
Vietnam's Law on Environmental Protection of 2020 introduced extended producer responsibility (EPR), the principle that whoever sells the packaging should pay for what happens to it afterwards, rather than leaving the bill with the city. Obligations began on January 1, 2024 for packaging, batteries, lubricants and tyres. Electronics followed in 2025. Vehicles arrive in 2027.
A company has a choice. Organise the recycling itself, hire a licensed recycler or a producer responsibility organisation, or pay the Vietnam Environmental Protection Fund and be done with it.
If it pays, the bill is calculated like this: F = R × V × Fs. Here, V is the weight of packaging the company put on the market. R is the mandatory recycling rate for that material. Fs is the official recycling cost norm, in dong per kilogramme.
This is a good design. It is published, arithmetic, auditable and does not depend on a market in traded certificates whose price nobody can explain. Anyone can check any company's sums with a calculator. Which is exactly why the numbers inside it matter so much.
Start with R. For plastic packaging it runs between 10 per cent and 22 per cent. Rigid PET sits at the top, at 22 per cent.
So a company that sells 100 tonnes of PET bottles is answerable for 22 tonnes. The remaining 78 tonnes are free. Not deferred, not phased in. Simply outside the obligation.
Then comes Fs, and this is where it stops being a rounding question. Fs was never meant to cover the whole cost of recycling a kilogram of plastic. It is the public top-up that makes the work worth doing where the resale value alone won't pay for it which is why the fight over it was a fight about small numbers. Vietnam's own recyclers said on the record what the PET number should be.
At the drafting consultations in late 2023, the Vietnam Recycled Plastics Association and the packaging recycling alliance asked for 3,900 dong a kilogram about $0.15, or Rs 14, against the 1,900 dong ($0.07, Rs 6.90) then in the draft. Adjustment coefficients, most of them below one, trimmed rather than lifted the figure. When the schedule was finally issued, rigid PET landed at 1,979 dong a kilogram, $0.08, or Rs 7.20, roughly half what the people who would do the recycling had asked for.
Flexible packaging makes the same point without the arithmetic caveat, because there is no resale value to argue about. The draft norm was 6,000 dong a kilogram ($0.23, Rs 22). A survey by the group Green Future put the real cost of collecting and treating the same material at 10,600 dong ($0.40, Rs 39).
Now multiply the two together, because that is what the law does. On PET, 1,979 dong at a 22 per cent rate works out to about 435 dong for every kilogramme a company puts on the market. Call it two US cents, or Rs 1.60.
A Japanese company pays about Rs 35 a kilo for plastic packaging. India’s own notified ceiling is Rs 7.90 (for MLP), a figure that sits well below what Indian cities actually spend to collect and treat the same material, according to the latest report by Delhi-based think tank Centre for Science and Environment, titled Policy, Practice and Plastic: Cost of Managing Plastic Waste in Indian Cities. Vietnam, having written the most transparent formula of the three, has produced the cheapest rate.
Japan's error was charging a flat fee by weight, which quietly subsidised laminates because they weigh almost nothing. Vietnam avoided that trap. It set different rates for different materials.
Then it pointed them the wrong way.
The materials that are easiest and most profitable to recycle, such as rigid PET, aluminum and carton, carry the highest obligations. The flexible and multi-material films, the sachets and pouches that no recycler wants and no waste-picker will stop for, sit at the bottom of the band. The packaging that causes the most trouble generates the smallest bill.
There is one genuinely sharp piece of drafting in the newest rules. Decree 110, issued in April 2026 and in force since May, no longer accepts plastic flakes as a finished recycling output. Shredding something is no longer recycling it. It is a small technical line and it does more real work than most of the targets around it.
In January 2025, an amendment quietly deleted the procedure by which recyclers and collection operators could apply to the Environmental Protection Fund for support. Writing a replacement was handed to two ministries. For the next 16 months contributions kept arriving with no legal route for the money to reach the people doing the work. Decree 110 finally supplied one: From May 25, 2026, recyclers and producer responsibility organisations can bid for support packages worth up to 10 billion dong (about $380,000) each, appraised by the ministry, disbursed by the Fund against audited recycling results.
That is the detail that decides whether this is producer responsibility or a tax. Money paid by producers, held by the state, earmarked for recycling, sat for two compliance years with the disbursement mechanism switched off. The mechanism now exists. Not one dong has yet been paid out under it.
Vietnam: Five questions
Who pays?
Producers and importers, above a revenue threshold of 30 billion dong (about $1.14 million, or Rs 11 crore)
Who decides the price?
The government, through a published cost norm per kilogramme
Who gets the money?
Nobody yet. The application procedure was removed in 2025; a replacement took effect in May 2026 and has not yet disbursed
Who carries the risk?
Informal collectors, who absorb whatever the norm fails to cover
Does the city get paid?
No. Municipal collection sits outside the formula entirely
Here is what the formula is actually pricing.
More than 90 per cent of recycling in Vietnam is carried out by informal workers and the craft villages they supply. They collect over 30 per cent of the country’s waste. They are overwhelmingly women, most between 40 and 70, and there are somewhere between 10,000 and 16,000 of them working on any given day in Hanoi and Ho Chi Minh City. They are called đồng nát in the north and ve chai in the south, names taken from the scrap they buy.
They already do the sorting that Japanese households do for free and Indian cities pay for badly. They stop for bottles because bottles pay. They walk past sachets because sachets do not.
Fs is, in practice, the price the state has put on that woman's afternoon. Set it below what the work costs and she keeps walking past the sachet, whatever the decree says.
Two more numbers make the point. When the ministry published its first list of licensed recyclers in February 2024 there were 24 in the whole country, thirteen in the north, eleven in the south and none at all in the central region, which is the stretch of coast with the worst leakage into the sea. And the maximum fine for failing your recycling obligation is two billion dong for a company, about Rs 73 lakh, or $76,000. For a large consumer goods company that is a line item, not a deterrent.
Vietnam and India are running the same race, with the same informal workforce, the same sachet economy and the same instinct to legislate ahead of infrastructure. Vietnam is roughly two years ahead on implementation, which makes it worth reading carefully rather than admiring.
Three things worth copying:
The published formula. Every input is a number in a public document. India’s certificate market cannot say the same, and a price nobody can explain is a price nobody can defend.
A single national declaration system, where companies file once and the filing carries legal liability for accuracy. India has the portal. What it needs is the liability.
Excluding flakes from counting as recycling. India should write the equivalent line for every material before the next compliance year, not after.
Three things to refuse:
An obligation set as a fraction of what you sell. If a company is answerable for a fifth of its packaging, four-fifths of the waste has no owner. India has the same problem in a different costume, and it will not survive contact with a serious audit.
A cost norm set below the cost of the work. The moment paying is cheaper than doing, every rational finance director pays. This is not corporate villainy. It is the policy working exactly as it was priced.
Collecting the money before building the pipe that spends it. A fund with no disbursement rule is not producer responsibility. It is revenue, and it will be defended as revenue once the treasury gets used to it.
Vietnam has built the clearest EPR arithmetic in the region. That is not a small thing, and India would benefit from copying the structure. But a transparent equation with the wrong numbers in it does not produce transparency. It produces a very legible account of how little anyone is being asked to pay.