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Green Transition in Vietnam’s Industrial Parks: Part 1 – Policy Foundations and Landscape
Vietnam’s industrial parks have long been central to the country’s export-led growth model, but with rising risks from climate change and rapidly evolving supply chains, the sustainability of this industrial base is coming under increasing scrutiny. Greening industrial parks has therefore emerged as both an environmental imperative and a strategic economic priority.
With multinational manufacturers facing tighter ESG requirements and carbon-related regulations, such as the EU’s Carbon Border Adjustment Mechanism (CBAM), the environmental performance of industrial parks is becoming a decisive factor in investment decisions and long-term competitiveness.
In response, Vietnam is gradually reshaping its industrial park model, with growing emphasis on renewable energy use, eco-industrial parks (EIPs), circular economy practices, and internationally recognized green standards. This transition is being supported by an evolving policy framework, including dedicated regulations, financial incentives, and international cooperation programmes aimed at accelerating adoption.
Sustained by both government incentives and external demand drivers, the greening of industrial parks is set to play an increasingly important role in Vietnam’s industrial strategy and green transition.
Vietnam’s industrial parks and green ambitions
According to the Ministry of Planning and Investment (MPI), as of November 2025, Vietnam has established 478 industrial parks, covering a total area of approximately 145.97 thousand hectares. Of these, 24 industrial parks are operational.
Industrial parks have become a key destination for foreign investment. According to the MPI, FDI capital in industrial parks and economic zones has accounted for approximately 35-40 percent of the country’s total registered FDI in recent years, rising to as high as 70-80 percent in the processing and manufacturing industries.
Due to their important role in the development of Vietnam’s industries and economy, the green transformation of these parks will also be crucial to meeting Vietnam’s environmental and climate goals. In 2021, Vietnam announced its goal of achieving net-zero emission by 2050, and in 2022 committed to an unconditional target of reducing greenhouse gas emissions by 15.8 percent below business-as-usual (BAU) levels by 2030.
Meanwhile, the National Power Development Plan for the 2021-2030 period, with a vision to 2050 (PDP8), which was amended through Decision No. 768/QD-TTg (Decision 768) in May 2023, sets specific goals for the development of renewable energy sources, such as wind, solar, and biomass.
A driver of competitiveness in the global market
Beyond the country’s domestic environmental ambitions, making industrial parks greener and more sustainable will also be crucial to strengthening their competitiveness as global companies increasingly seek to align with their own ESG commitments and requirements, as well as compliance with increasingly stringent regulations such as the European Union’s Carbon Border Adjustment Mechanism (CBAM).
As a country that is heavily and increasingly dependent on exports, aligning with these international standards is becoming crucial for its long-term trade competitiveness and integration into global value chains.
Hardy Diec, CEO of KCN Vietnam, states that the global supply chain shifts and efforts to diversify manufacturing bases have heightened the need for top-tier industrial infrastructure in Vietnam.
Key policies driving Vietnam’s industrial park development
The Vietnamese government has taken a number of policy and regulatory steps to spur the green transition of industrial parks, providing incentives for the adoption of renewable energy, resource-efficient and cleaner production, and the development of EIPs.
In the regulations on the management of industrial parks and economic zones, the government provides incentives for the development of EIPs, defined as industrial parks in which enterprises apply cleaner production, use resources efficiently, and cooperate through industrial symbiosis.
Vietnam’s first comprehensive directive governing EIPs
In May 2022, Vietnam adopted Decree No. 35/2025/ND-CP (“Decree 35”), which provided the country’s first comprehensive legal framework for EIPs. The decree expanded earlier regulations by defining EIP criteria, incentives, certification and re-certification procedures, and support mechanisms for eco-enterprises, marking a shift from pilot experimentation to formalized national policy.
Decree 9710: A standardized legal framework for EIPs
In 2024, Vietnam released Decree No. 9716/VBHN-BKHDT (“Decree 9716”), which amended Decree 35 to formulate a more standardized legal framework for EIPs and provide specific incentives for their development.
Decree 9716 defines EIPs as “an industrial park in which enterprises participate in cleaner production and efficient resource utilization, with linkages and cooperation in production to implement industrial symbiosis” and outlines specific criteria for a park to meet this definition. meeting the criteria stipulated in this decree.
The decree notably allows EIPs to be set up in areas that are prohibited for other types of industrial parks, including inner city areas of special-class cities, centrally-administered Class I cities, and provincial-administered Class I cities. This opens up new possibilities for EIPs to be located strategically near urban areas and ports, enabling both better integration with existing urban infrastructure and energy networks, and closer proximity to both potential end consumers and transport hubs.
Under the decree, industrial parks and companies operating within them need to meet certain criteria to be certified as EIPs and “eco-enterprises”, which will give them access to certain preferential policies.
Development of eco-industrial parks
2014-2019: Strategic shift toward eco-industrial parks
In recent years, Vietnam has committed to transforming traditional industrial parks into green, eco-friendly zones to mitigate the environmental impact of industrial park expansion and industrialized manufacturing.
The country first began developing EIPs in 2014, when the MPI began developing a model for the parks along with international partners. In 2015, working with the United Nations Industrial Development Organization (UNIDO), the Swiss Federal Department of Economic Affairs (SECO), the Global Environment Fund (GEF), and the United Nations Development Programme (UNDP), Vietnam launched pilot EIPs in the provinces of Ninh Binh, Da Nang, and Can Tho.
Between 2015 and 2019, these pilot EIPs demonstrated the economic and environmental potential of the model, with tangible benefits for companies including annual savings of more than 22,000 MWh of electricity, 600,000 cubic meters of water, and 140 TJ of fossil fuels, while cutting waste and chemical use.
Private-sector investment exceeding VND 207 billion (US$7.9 million) also helped reduce CO2 emissions by 32 kilotonnes per year, alongside cost savings of roughly VND 76 billion (US$2.89 million) annually.
2020-2024: Expansion to major industrial hubs
With further funding from the Swiss government, the MPI and UNIDO expanded the model in the 2020s to major industrial hubs, including Hai Phong, Dong Nai, and Ho Chi Minh City, while continuing work in Da Nang.
By May 2024, the program had supported 90 enterprises in adopting nearly 900 resource-efficient and cleaner production solutions across industrial parks such as Hiep Phuoc, Amata, Deep C (Dinh Vu), and Hoa Khanh. At the same time, MPI identified 62 potential industrial and industrial-urban symbiosis solutions, with 18 deemed highly feasible, laying the groundwork for deeper waste reuse and circular economy practices.
Looking ahead, Vietnam’s EIP program is entering a new cooperation phase from 2024 to 2028. The Swiss government has committed to extending its support with UNIDO to accelerate EIP development and advance the circular economy. Parallel initiatives with the World Bank, the European Union, IDH, and other partners aim to replicate EIP models in new locations, improve water circulation in textile-focused parks, promote efficient power use based on international best practices, and further embed circular-economy principles across Vietnam’s industrial park system.
With a standardized policy framework now in place, the effectiveness of Vietnam’s green industrial park strategy will increasingly depend on implementation outcomes and market uptake. Part Two of “The Green Transition in Vietnam’s Industrial Parks” will assess current eco-industrial park development trends and what they indicate for Vietnam’s industrial competitiveness.
The escalating threat of climate change, growing government regulations, and rapid technological advancements create a complex landscape for operating in Asia’s environment and cleantech industry. Our experts help you navigate these challenges effectively. Contact our Vietnam team to schedule a consultation: Vietnam@dezshira.com.
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