Negative Carbon - Strategic Choice for Vietnam's Sustainable Future in the Plastic Industry
- Virtus Prosperity
- May 23
- 7 min read
I. CURRENT STATUS OF VIETNAM'S PLASTICS INDUSTRY
1. Import Volume of Plastic Resins
Vietnam’s plastics industry is heavily dependent on imported raw materials, with imports accounting for over 80% of total input materials, mainly virgin plastic resins such as PE (Polyethylene), PP (Polypropylene), PVC (Polyvinyl Chloride), PS (Polystyrene), and PET (Polyethylene Terephthalate). According to the 2023 Import-Export Report by the Ministry of Industry and Trade, the volume of imported plastic resins reached 6.814 million tons, with a value of USD 9.755 billion, representing a 21.2% decrease in value and a 4.2% decrease in volume compared to 2022. Major import markets include China (22.65%), South Korea (20.12%), and ASEAN countries (14.165%).
The dependency rate on imported materials ranges from 75% to 90%, reflecting limitations in domestic production capacity. It is estimated that total demand for plastic resins in 2023 was approximately 8.5 million tons, while domestic production could meet only around 1.7 million tons.
2. Dependence on Petrochemical Feedstock
Virgin plastic resins such as PP and PE are primarily derived from petroleum through processes like hydrocarbon cracking and polymerization, in accordance with virgin resin production methods. This makes the plastics industry highly vulnerable to fluctuations in oil prices and supply, especially as Vietnam currently lacks a sufficient number of large-scale petrochemical refinery projects, such as Long Son or Nghi Son, to meet domestic demand.
According to industry reports, domestic production capacity meets only 15–20% of total demand. Projects like Binh Son and Phu My supply roughly 18% of local needs but remain insufficient to significantly reduce reliance on imports.
3. Significant Environmental Impact, Lack of a Clear Carbon Reduction Roadmap
The plastics industry has a considerable environmental footprint, with Vietnam generating approximately 1.8 million tons of plastic waste annually, ranking 5th globally in terms of plastic waste volume. Plastic waste contributes to pollution on land and in oceans, adversely affecting ecosystems and human health. Furthermore, the production of plastics, particularly those derived from petroleum, significantly contributes to greenhouse gas emissions. Globally, the plastics industry is projected to account for 13% of total carbon emissions by 2050.
Currently, there is no specific carbon reduction roadmap for Vietnam’s plastics sector. However, national programs such as the Vietnam National Energy Efficiency Program Phase 3 (VNEEP3) aim to reduce energy consumption in the plastics industry by 13–22% by 2025 and by 21–24% by 2030. Businesses are encouraged to develop carbon reduction strategies, invest in recycling technologies, and adopt clean energy solutions. Nevertheless, implementation remains challenging, particularly for small and medium-sized enterprises (SMEs), which make up 90% of the industry but contribute only 30% of total revenue.
4. International and Domestic Pressures
The EU’s Carbon Border Adjustment Mechanism (CBAM), Impact on Exports
The Carbon Border Adjustment Mechanism (CBAM) is an EU policy designed to impose carbon tariffs on high-emission imported goods, currently targeting sectors such as cement, iron and steel, aluminum, fertilizers, and electricity. While the plastics industry is not yet directly affected, it faces indirect risks due to its connection with chemical products. The EU accounts for 18.2% of Vietnam’s plastic export value. From 2030, CBAM is expected to expand its scope, increasing pressure on businesses to report emissions and reduce their carbon footprint to remain competitive, especially for exports to the EU market.
Rising Domestic Demand for Sustainable Products
Sustainable consumption trends are growing rapidly in Vietnam, with green consumption demand increasing by an average of 15% annually from 2021 to 2023. A survey by IBM found that 90% of consumers changed their environmental perceptions after the pandemic, and 72% are willing to pay up to 10% more for products that meet green standards. This creates significant pressure on the plastics industry, particularly in packaging and household products, to transition to biodegradable materials, recycled plastics, and adopt circular economy practices.
II. NEGATIVE CARBON
1. Current State of CO₂
Global CO₂ emissions from energy reached 37.8 gigatonnes in 2024, a 0.8% increase from 2023 (iea.org, 2024), driven by rises in natural gas (2.5%) and coal (0.9%).
Atmosphere CO₂ hit 422.5 ppm, 50% higher than pre-industrial levels, exacerbating climate impacts like heatwaves and sea level rise (iea.org, 2024). Emerging economies include Vietnam, especially China and India, saw significant increases, while advanced economies like the EU saw declines.
Regionally, emerging markets and developing economies saw emissions increase by 1.5% (375 Mt CO₂), driven by energy demand, with coal up 2%, natural gas up 3.7%, and oil up 0.3%.
Despite these regional variations, the overall trend of rising emissions underscores the urgency of the climate crisis. The UNEP Emissions Gap Report 2024 warns that nations must cut greenhouse gas emissions by 42% by 2030 and 57% by 2035 to stay on trạck for 1,5 degree Celsius, or risk temperature increases of 2.6-3.1 degree Celsius this country if ambition in new Nationally Determined Contributions (NDCs) is not increased (unep.org, 2024).
2. Why Negative Carbon is Essential Now?
Negative Carbon
Negative carbon refers to processes or technologies that result in a net removal of carbon dioxide (CO₂) from the atmosphere, meaning more CO₂ is removed than is emitted (iea.org, 2024). This is different from carbon neutral, which balances emissions with removals to achieve net zero.
The urgency of negative carbon is driven by several factors, rooted in the current climate crisis and the limitations of emission reduction strategies alone:
- First, global progress on emissions reduction has been slow, with emissions largely plateauing over the past decade but still reaching new highs in 2024.
- Second, there are hard-to-abate sectors where achieving zero emissions is challenging. Agriculture, aviation, and certain industrial processes like steel and cement production emit CO₂ that cannot be easily eliminated with current technologies. The Energy & Climate Intelligence Unit (ECIU) highlights that negative emissions are needed to balance out emissions from such sectors, ensuring net zero is achievable.
- Third, the risk of overshooting temperature targets necessitates negative emissions. The IPCC projects that most scenerios limiting warming to 1.5 degree Celsius rely on CDR to accelerate emissions reductions, offset residuals, and provide options for net negative emissions after 2050.
- Fourth, recent policy developments and scientific consensus reinforce the importance of negative carbon. The U.S. Department of Energy launched the Carbon Negative Shot in 2021, aiming to achieve affordable (<$100 per tonne), durable (100+ years), and gigatonne-scale CO₂ removal by 2032, aligning with global climate goals.
3. The Difference Between Carbon Neutral and Negative Carbon
Carbon Neutral refers to a state in which the amount of CO₂ emitted into the atmosphere is fully offset by the amount of CO₂ removed, resulting in net-zero emissions. This is typically achieved through emission reductions, the use of renewable energy, and offset measures such as reforestation or purchasing carbon credits.
In contrast, Negative Carbon is a more advanced state where the amount of CO₂ removed from the atmosphere exceeds the amount emitted, thereby contributing to an absolute reduction in global CO₂ concentrations. Technologies such as Direct Air Capture and Storage (DAC) and Bioenergy with Carbon Capture and Storage (BECCS), as well as large-scale ecosystem restoration, are key examples.
Criteria | Carbon Neutral | Negative Carbon |
Definition | A balanced state where CO₂ emissions are equal to CO₂ removals from the atmosphere. | A state where CO₂ removals exceed emissions. |
Main Objective | Achieve net-zero emissions. | Achieve net-negative emissions—reducing the total amount of CO₂ in the atmosphere. |
Implementation method | - Emissions reduction. - Use of renewable energy. - Reforestation and carbon offsetting | - Application of carbon capture and storage technologies (DAC, BECCS). - Restoration of carbon-absorbing ecosystems. |
Common Applications | Businesses and organizations aiming to “neutralize” their emissions. | Used in global climate strategies to reverse climate change. |
Technical Challenges | Lower cost and technological complexity. | Requires advanced technology, high investment, and large-scale deployment. |
Example | A company emits 100 tons of CO₂ and offsets it by planting trees that absorb 100 tons. | A technology removes 150 tons of CO₂/year while emitting only 50 tons/year. |
4. Challenges to Achieving Carbon Neutrality in Vietnam
The key challenges include:
- Finance: A large investment demand (USD 30 billion/year) exists, while current capital is tied to high-carbon sectors such as coal. According to a report by the Center for Energy Science and Policy, there is a financial gap of over USD 300 billion, with fossil fuel subsidies still taking precedence.
- Dependence on international support: Vietnam’s net-zero target is conditional, relying heavily on international financial assistance.
- Economic growth: There is a conflict between economic development and energy consumption reduction. Vietnam’s rapidly expanding economy, particularly in manufacturing, drives a growing demand for low-cost energy, mainly sourced from fossil fuels..
Carbon Credits: Progress and Challenges
In terms of carbon credits, the market in Vietnam is still in its early stages. A pilot carbon credit exchange platform was introduced at Techfest 2020, using Blockchain 4.0 technology to attract green finance for sustainable development. However, Vietnamese business participation remains limited, and recognition of carbon credits relies on international organizations, which slows market development.
The Law on Environmental Protection 2020, which came into effect in 2022, legally established the carbon market. However, current transactions are mostly conducted on the voluntary market, through projects such as afforestation and waste management. These highlight the need for strict compliance with regulations in the development and certification of carbon credits. Nonetheless, a lack of capacity and awareness continues to be a major barrier.
=> The progress toward carbon neutrality and carbon credit development in Vietnam remains slow due to financial constraints, infrastructure limitations, and low stakeholder participation. Despite strong commitments and proposed solutions, achieving the net-zero target by 2050 and developing a functioning carbon credit market will require more time, resources, and international collaboration.
III. CONCLUSION
Vietnam’s plastic industry is currently facing serious economic, environmental, and policy-related challenges amid the global green transition. With a dependence on imported raw materials of up to 80–90%, especially virgin plastic resins derived from petroleum, the industry is highly vulnerable to oil price volatility and contributes significantly to greenhouse gas emissions. While domestic production only meets around 20% of demand, local petrochemical projects are still insufficient to ensure long-term material security.
In addition, the plastics sector is one of the major carbon emitters, with plastic waste generation reaching 1.8 million tons per year, placing Vietnam among the top five countries for plastic waste pollution globally. Although programs such as VNEEP3 and the 2020 Law on Environmental Protection have begun to establish mechanisms for emission reduction and carbon credit market development, implementation remains slow, particularly among small and medium-sized enterprises (SMEs), which make up 90% of the industry but contribute only 30% of its revenue..
As global CO₂ emissions hit record highs in 2024, mechanisms like the EU’s Carbon Border Adjustment Mechanism (CBAM) will exert immense pressure on the competitiveness of Vietnamese plastic products unless a clear carbon transition roadmap is developed. At the same time, domestic consumer demand is shifting toward sustainable products, forcing companies to innovate materials, adopt circular economy practices, and invest in low-emission technologies.
Therefore, to maintain competitiveness and contribute to the Net Zero 2050 goal, Vietnam’s plastic industry must shift its strategy along three pillars: (1) enhancing localization of raw materials through the development of negative-carbon materials or recycling technologies.; (2) building capacity for emission reporting and certification aligned with international standards; (3) accelerating investment in green technology, clean energy, and carbon credit mechanisms. In the long term, only by integrating both approaches, emission reduction (carbon neutrality) and net removal of emissions (negative carbon), can Vietnam’s plastic industry both sustain growth and meet stringent environmental requirements across the global value chain.
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