Circular water economy: International lessons and Vietnam's progress

In the global shift toward green growth and sustainable development, water treatment and reuse are no longer merely technical requirements — they have become core criteria for building environmentally friendly production ecosystems. In Vietnam, the Ministry of Agriculture and Environment has identified circular water management as a key pillar to enhance business competitiveness, reduce environmental risks, and move toward a circular economy.

Significant gaps in industrial clusters and synchronization barriers

According to Mr.Ho Kien Trung, Deputy Director General of the Department of Environment, in recent years many businesses have invested heavily in advanced wastewater treatment technologies that approach the standards of developed countries. Centralized wastewater treatment systems in industrial zones have seen marked improvements, with 94.1% now meeting regulatory standards. Automated monitoring systems, directly connected to state agencies, have helped increase transparency and oversight effectiveness.

However, significant gaps remain. In industrial clusters, home to many small and medium-sized enterprises, only 31.5% have wastewater treatment systems that meet the required standards. Many clusters still operate in an ad-hoc manner, lacking proper water treatment infrastructure planning. This results in environmental pollution and weakens Vietnam’s appeal to international investors.

Mr. Trung identifies five key challenges: lack of synchronized treatment technologies; high investment and operating costs; shortage of skilled technical labor; inadequate regulatory oversight; and underexploited economic potential of wastewater. These challenges highlight the urgent need for policy support — especially for SMEs, the group most at risk of being left behind in the green transition.

Institutional reform: Removing bottlenecks to enable action

From a business perspective, Mr. Tran Thien Long, Vice President of the Vietnam Industrial Real Estate Association, notes that although Vietnam has begun piloting eco-industrial park models, implementation has mainly involved converting traditional parks, which lacked green infrastructure from the outset.

To create a more enabling legal framework, the Ministry of Agriculture and Environment has submitted to the government a revised Decree No. 05/2025/ND-CP, amending Decree No. 08/2022/ND-CP, and Circular No. 07/2025/TT-BTNMT, amending Circular No. 02. These regulations aim to simplify administrative procedures, delegate authority to local governments, and clarify requirements on environmental impact assessments (EIA), wastewater connection, and discharge transfer.

According to Mr. Ho Kien Trung, 60–70% of administrative procedures have now been decentralized to local authorities, allowing for quicker project implementation. The revised decree also includes provisions on water use management and discharge permitting, helping to clarify responsibilities among stakeholders and strengthen enforcement.

Learning from global practices

International experience shows that wastewater is not waste, but a vital component of the circular economy. American water resources expert Sandra Postel once remarked, “Efficient water reuse not only saves costs but also eases pressure on resources and enhances climate resilience.”

In the Netherlands — a global pioneer in water technology , Mr. Olaf van der Kolk, CEO of AquaMinerals, shared that over 90% of domestic wastewater is treated and reused in the production of building materials, agriculture, and industry. “The value of wastewater doesn’t lie in its volume, but in what we can extract from it,” he emphasized.

Ms. Ramla Khalidi, UNDP Resident Representative in Vietnam, affirmed that the country has strong potential to transition to a circular economy, especially in the industrial sector. She noted that with improved access to finance, technology, and policy experimentation, small and medium-sized enterprises could transition more quickly and effectively.

In a global market that increasingly emphasizes traceability, green certifications, and environmental responsibility, water treatment and reuse are no longer optional — they are prerequisites for businesses to survive and thrive sustainably. From the state side, policies must continue to prioritize facilitation, decentralization, and technological innovation. From the business side, proactive leadership and genuine commitment are essential. Only through joint efforts can a green, clean, and efficient production ecosystem take root and flourish across the country.

K.Linh