2024 - ESA - Green Transition in Southeast Asia

ENVIRONMENTAL
SUSTAINABILITY IN ASIA:
GREEN TRANSITION IN
SOUTHEAST ASIA
Making Sustainable Circular Economy Landscape in The Philippine Extended

Finance Taxonomy Work Vietnam Producer Responsibility
for Green Transition in (EPR) Act of 2022:
ASEAN Transforming Plastic
Waste Management
Contents
Ⅰ. Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

Summary 4
1. Imperatives of ASEAN Sustainable Finance Taxonomy 5
2. Evolution of ASEAN Taxonomy for Sustainable Finance 7
3. Key Principles of Successful Taxonomy and ASEAN Taxonomy for Sustainable Finance 10
4. ASEAN Taxonomy Design and Essential Criteria for Sustainable Finance 11
5. An assessment of ASEAN Taxonomy against Key principles of other emerging best practices 17
6. Conclusion and Recommendations 20
Ⅱ. Circular Economy Landscape in Vietnam

1. Status of economic development and emissions in Vietnam 26
2. Vietnamese policies related to circular economy 29
3. Suggestions for circular economy development 33
4. Conclusion and Recommendations 37
Environmental Sustainability in Asia:
Green Transition in Southeast Asia Ⅲ. The Philippine Extended Producer Responsibility (EPR) Act of 2022:
Transforming Plastic Waste Management
Copyright © 2024 by the Korea Environment Institute (KEI). All rights reserved.
ISSN 2586-4416
1. Abstract 40
2. Introduction 41
No part of this publication may be reproduced or utilized in any form or by any means, electronic or mechanical, including
photocopying, recording, or by any information storage and retrieval system, without permission in writing from the publisher. No use 3. Policy Landscape and Institutional Arrangements 41
of this publication may be made for resale or any other commercial purpose whatsoever without prior permission in writing from the 4. The New Extended Producer Responsibility Act of 2022 47
Korea Environment Institute.
5. Status of the EPR Implementation 51
The views expressed in each of the chapters are the authors’ own and should not be attributed to the Korea Environment Institute (KEI) 6. Challenges in the Implementation of the EPR Law 53
or any other organizations.
7. Recommendations 57
Published and edited by Global Cooperation Team, Korea Environment Institute 8. Conclusion: A Collaborative Path to a Plastic-Free Future 61
Making Sustainable Finance Taxonomy
and legislative landscape for green transition within ASEAN member states has fragmented. The ambition
and clarity necessary to encourage widespread uptake of the ASEAN Taxonomy of sustainable finance are
Work for Green Transition in ASEAN needed. It has been recommended to strengthen taxonomy architecture with Key Performance Indicators,
creating an enabling policy and legislative environment and improving taxonomy usability across the region
through international cooperation.
Venkatachalam Anbumozhi1)
1 Imperatives of ASEAN Sustainable Finance

Taxonomy
Association of Southeast Asian Nations (ASEAN) member states have in recent years made strides toward
Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

Summary
Environmental Sustainability in Asia: Green Transition in Southeast Asia
promoting the development of green finance. They are increasingly committed to working towards the
reduction of Green House Gas (GHG) emissions. On that score, all member states have already signed the
The green transition to a low-carbon circular economy offers a promising resilience economic growth
Paris Agreement. Southeast Asia grapples with a myriad of major environmental issues, including typhoons
strategy in times of widening inequality and looming economic recession. Yet, in most of the developing
and floods, and the need for and willingness to support green finance initiatives is growing. Worries that
and emerging economies of ASEAN, investments in and for green transition activities still represent a small
natural disasters such as coastal erosion due to rising sea levels and the impact of drought on agriculture
financial flow. Sustainable finance taxonomy – i.e. shared classification systems for defining environmentally
could worsen as climate change progresses have made the adoption of sustainable finance in high-risk
sustainable investments – could incentivize additional investment in activities that substantially contribute
regions imperative.
to low-carbon green growth and accelerate the transition to a circular economy. The evolving ASEAN
Sustainable Finance Taxonomy is ambitious and comprehensive in terms of its scope and is comparable to
that of the EU taxonomy and other emerging country-specific taxonomies. This paper examines the salient Table 1 Ranking of ASEAN Member States in Environmental Performance and Climate Risk
futures of the ASEAN taxonomy which has listed four environmental objectives viz (1) mitigation of climate Climate
The proportion of the Forest area as a
change risks (2) adaptation to climate change (3) protection of healthy ecosystems and biodiversity and Material footprint Risk
population practicing proportion of total
per capita Index
(4) promotion of resource resilience and a transition to a circular economy. The foundation framework of open defecation land area
(ton) score
(%) (%)
ASEAN sustainable finance taxonomy falls within the following three categories (a) Green - contributes to or (rank)
enables climate change mitigation (b) Amber- activities contributing to decarbonisation where mitigation of 2000 2020 2020 2020 2000 2020 2020
Brunei
other harm to environmental objectives is necessary and (c) Red - does not contribute to or enable climate 2.5 2.6 12.6 19.09 75.33 72.11 109.50 (120)
Darussalam
change mitigation and/or fails to meet other safeguards. There are three unique challenges associated Cambodia 82.7 40.6 1.66 3.57 65.41 53.57 95.17 (111)
with embedding taxonomy. First, achieving a green transition requires transformation across the economic Indonesia 32.2 12.4 3.36 6.23 54.87 50.24 46.17 (37)
sectors. But ASEAN taxonomy, by nature, is structured on the atomization of individual economic activities Lao PDR 62 22.1 1.26 7.37 71.6 81.29 109.50 (120)
Malaysia 1.6 0.3 19.19 22.61 65.72 67.55 65.50 (72)
being undertaken in specific geographic jurisdictions. In some cases, this tension limits the scope for
Myanmar 11.2 4.7 0.53 1.5 53.39 44.47 57.17 (53)
incentivizing transformational developments over multiple objectives of an investment. Second, the most
Philippines 10.9 5.7 4 4.34 23.57 29.96 31.33 (16)
intended users of a taxonomy, particularly institutional investors, equity fund development, and project
Singapore 51.14 73.04 23.06 23.06 109.50 (120)
promotors lack awareness of, or are underprepared for, the myriad technical and procedural challenges in Thailand 1 0.3 7.75 14.9 33.3 32.1 37.50 (20)
meeting the ambitious green transition criteria laid out in the ASEAN taxonomy. Third, the current policy Viet Nam 17.7 3.9 3.42 10.01 37.82 47.64 15.33 (5)
Source: compiled by the author
1) Economic Research Institute for ASEAN and East Asia, [email protected]
4 5
As part of the ASEAN Community Vision 2025 and Climate Neutral Road Map, all the AMS are expanding As the need to boost these endeavours becomes increasingly critical, member states are doing more to
their use of renewable energy. For instance, the installed capacity for renewable energy in ASEAN increased propel the implementation of sustainable finance. Sustainable finance is essential to support the transition
2.6-fold from 33 gigawatts (GW) in 2000 to 86.8 GW in 2020 (IRENA, 2022). Still, ASEAN countries’ heavy to more sustainable economic development. NGFS (2019) defines sustainable finance as the practice of
reliance on fossil fuels such as oil and coal to meet growing energy demand has meant that greenhouse gas integrating environmental, social, and governance (ESG) criteria into financial services to bring about
emissions have been increasing. According to the International Energy Agency (IEA, 2020; IEA, 2021), carbon sustainable development outcomes, including mitigating and adapting to the adverse impacts of climate
dioxide (CO2) emissions from fuel burning in the region increased from 690 million CO2 tons in 2000 to change.
1.49 billion CO2 tons in 2018, driven by increasing energy demand amid high economic growth, population
growth, and urbanization. The key purpose of any taxonomy on Sustainable Finance is to help mobilize all forms of finance to
support the achievement of sustainable development, including the transition to net-zero carbon economies,
The transition to a circular economy is identified as a vital industrial strategy by the ASEAN Economic the achievement of broader sustainable development Goals, and accelerating the transition to circular
Community, to mitigate the impacts of unsustainable resource consumption and tackle waste and pollution economy. During that process, an effective taxonomy could prevent “greenwashing” of investment funds by
problems hence the Circular Economy Framework was formulated in 2021, Yet, the implementation of establishing a clear set of criteria and a common language by which the degree of sustainability of a project
circular economy faces a significant gap in the availability of finance. or investment can be measured (Alessia, 2019).

Even as ASEAN member states come to grips with the increasing criticality of taking low-carbon circular
economy action quickly, there are more challenges to resolve such as conservation of biodiversity, and cross-
border haze problems. Anbumozhi et al (2016) estimated that ASEAN countries will need to invest a total
of $2 trillion in green businesses over the next 10 years to achieve the Nationally Determined Contribution
2 Evolution of ASEAN Taxonomy for
(NDC) targets. Per capita, Clean Energy investments are very low in ASEAN.
Sustainable Finance
ASEAN is the most dynamic region in terms of Foreign Direct Investments and is inching towards a
Figure 1 Per Capita, Low Carbon Energy Investments Required in ASEAN
single Marke. This would mean that investors, be they Multilateral Development Banks, Asset Owners
or Managers, Commercial Banks, Pension Funds, etc., who are increasingly willing to invest in low-carbon
USD per capita
per year
453 331 circular projects with environmental sustainability objectives, will only place their funds in those jurisdictions
through 2050 254 where suitable guidance and criteria to assess the sustainability of projects exist. No taxonomy, or at least
141
East comparable direction, will, effectively, mean no finance flows from sustainability funds from outside the
European Rest of
North Union European Asia region, say Europe, or the US. Clear guidance around the degree of sustainability of a project is necessary
America
Middle East to accommodate a clear and fast decision-making process for investors. Lack of clarity leads to delays or
72 and North 95 555
Africa Southeast investors’ inability to compare opportunities, which always leads to increased transactions and lowered
Global Asia
efficiency (ASEAN, 2021).
Latin 58
America Rest of
68 and the 49 Asia
122 Caribbean
Sub-Saharan The ASEAN Capital Markets Forum (ACMF) has undertaken various steps to promote capital market
Africa Oceania
financing for sustainability, including the introduction of the ASEAN Green Bond Standards in 2017 and the
ASEAN Sustainability Bond Standards in 2018. The ACMF also released a Roadmap for Sustainable Capital
Markets in ASEAN in May 2020, which focused on strengthening infrastructure, expanding, and improving
Renewables Energy efficiency Electrification of end-uses Power grids and flexibility
access to financial products, raising awareness and capacity building, and improving connectivity. In terms of
Based on IRENA analysis strengthening infrastructure, reducing concerns about so-called greenwashing – the practice of companies
Note: Per capita investment figures were calculated on basis of each region’s average population during the period 2019-2050.
giving a flattering picture of their climate policies and business practices – was a crucial recommendation
Disclaimer: The designations employed and the presentation of material herein do not imply the expression of any opinion on the
part of IRENA concerning the legal status of any region, country, territory, city or area or of its authorities, or concerning (ATF, 2022).
the delimitation of frontiers or boundaries.
6 7
These efforts were also complemented by the ASEAN central banks and insurance regulators. These finance adoption by AMS” Given the differing levels of economic development and situations concerning
resulted in the release of three parallel but interrelated documents. The ACMF document maps the pathways the establishment of sustainable finance regimes and approaches across the ASEAN region, the ASEAN
to sustainability from 2020 to 2025, following the Paris Agreement and the United Nations Sustainable Taxonomy itself sets outs multi-tiered framework covering a “Foundation Framework” which should be
Development Goals (SDGs) while the other two documents make recommendations on how ASEAN can applicable to all ASEAN Member States and a “Plus Standard” which contains metrics and thresholds to allow
collaborate to promote sustainable finance and support ASEAN’s transition to a low carbon economy region has a deeper benchmarking of eligible green activities and investments.
(ICMA, 2021). The three documents identified, among other things, a regional taxonomy as a common
building block to enable an orderly transition and foster sustainable finance adoption in the ASEAN region. This classification system, which was developed in accordance with internationally recognized
In this regard, the ASEAN Finance Ministers, and Central Bank Governors’ Meeting (AFMGM) agreed on the taxonomies like the EU’s, is ASEAN’s standard for sustainable economic activities in an extremely diverse
establishment of an ASEAN Taxonomy Board (ATB) with the scope of developing, maintaining, and promoting region with countries in differing developmental status (Fig 2). ASEAN’s economic diversity demands a tailor-
an ASEAN Taxonomy (ADB, 2022). Additionally, sustainable finance has become a permanent agenda at the made approach to measuring economic activity and its impact on the environment. The ASEAN Taxonomy
ASEAN Finance and Central Bank Deputies Meeting (AFCDM) and AFMGM, starting in 2021. employs two approaches for this – the Foundation Framework, which classifies all sectors using qualitative
screening criteria, and the Plus Standard, which classifies specific sectors of high importance using specific
Stakeholder engagements conducted during the development of the Roadmap for ASEAN Sustainable criteria.

Capital Markets revealed a lack of transparency of information and quality data. Exchanges in six AMS
(Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam) require sustainability reporting in
accordance with national guidelines. These guidelines are not standardized across countries, which makes Figure 2 Differing Levels of Per Capita GDP in ASEAN
it difficult for investors to benchmark sustainability performance across companies and industries in ASEAN.
There is also no systematic way of assessing economic activities and/or companies that are either low carbon
and/or trying to transition.
A survey of borrowers, lenders, and other market influencers conducted by the Economic Research
Institute (ERIA) for ASEAN and East Asia (Anbumozhi, 2019) investigated the real and perceived barriers and
risks underlying access to financing. A key finding of this survey was a need for the private sector to work
with governments to implement strategies to invest in the low-carbon economy. Market-based risks were
cited as a significant concern when considering low-carbon financing and investment in ASEAN. This includes
general market risks, such as currency and interest rates, as well as the regulatory environment. The greatest
technological risk cited was the lack of grid connectivity for power generation and a general concern with
underdeveloped supply chains. Respondents also identified a lack of access to information about the carbon
emission reduction potential of the projects and programs.
Source: Anbumozhi, 2021

The need for taxonomy has been identified as a key impetus to widen participation and access among
market players inclusively. An ASEAN Taxonomy will help harmonize the definitions of green and sustainable The first version of the ASEAN Taxonomy focused on the environment objectives and served as a
activities and assets across the AMS. At the same time, the Taxonomy must consider the specific situation of comprehensive guide to complement national sustainability efforts to benefit all ASEAN members by
the AMS, many of which are in a state of development and growth (Bernardini, 2019). This will enable it to providing a credible structure. It listed four environmental objectives: (1) mitigation of climate change risks;
act as a tool for transition for high-emission sectors and provide access to funding for sustainable projects, (2) adaptation to climate change; (3) protection of healthy ecosystems and biodiversity; and (4) promotion of
assets, and activities. resource resilience and a transition to a circular economy. It also states that economic activities contributing
to one environmental objective should not cause harm to other objectives and that steps should be taken to
ASEAN published its Version 1 of a regional-wide Taxonomy in November 2021 (ASEAN, 2021). It was improve energy transition. But it adopted a three-tiered approach as illustrated in Fig 3.
developed to “serve as a common building block that enables an orderly transition and fosters sustainable
8 9
Figure 3 Three Tiered Approach in ASEAN Taxonomy Ver 1.0 First, it has the potential to facilitate energy transition in a high-growth region that currently relies heavily
on fossil-based systems of energy production and consumption. The ASEAN taxonomy will likely play a role in
Upper limit established by specified metric (e.g. everage emissions of that activity in the region) defining technologies that will enable Southeast Asian countries to effectively achieve net zero greenhouse
Specific metrics. E.g. Emissions gas emissions.
A performance level not meeting T1 but above business
Tier 3:
Entry as usual and will be retired at an established point in
time
Second, the ASEAN taxonomy will likely complement and help further develop the ASEAN Green Bond
Tier 2: A performance level not meeting T1 but contributing Standards and the ASEAN Sustainability Bond Standards.
Intermediate significantly, and will be retired at an established point in time
Decli
ning
thres
hold
set b
y scie
nce-
Finally, the ASEAN Taxonomy is expected to ensure consistency among policy authorities, financial
Tier 1: This is the tier where the performance level is aligned with global net base
d tra
Advanced jecto
zero targets and/or Paris Agreement ry to
net z
ero
market stakeholders, and global investors in the region by standardizing definitions of green or sustainable
assets and activities.
Source: ASEAN, 2021

Importantly, the second version of the ASEAN Taxonomy does not just focus on the financing of Net-

There were several reasons behind the issuance of the multi-tiered taxonomy. First, the lack of a common Zero Carbon projects, but also those transitional projects that can help economies eventually achieve net-
language for communication and collaboration on economic activities and the classification of financial zero targets, something that the tiered approach is designed specifically to help achieve. This is important
instruments. Second, an absence of transparency in information and data on initiatives for sustainable for a region that is still growing economically, and which in many cases is unable to move directly to a net-
capital markets. Third, complexities and loopholes when comparing sustainability reporting standards zero carbon position.
imposed by stock exchanges on listed companies in different countries. Finally, challenges in identifying and
implementing a systematic evaluation method to assess whether economic activities and enterprises are
promoting initiatives to reduce carbon emissions.
4 ASEAN Taxonomy Design and Essential

Criteria for Sustainable Finance
3
Key Principles of Successful Taxonomy and
ASEAN Taxonomy for Sustainable Finance The ASEAN Taxonomy for Sustainable Finance has been developed to serve as a common building
block that enables an orderly transition and fosters sustainable finance adoption by the ASEAN Member
The Bank of International Settlements, in its paper A Taxonomy for Sustainable Finance Taxonomies, States. This is particularly important since across the ten AMS there are a variety of systems and policies on
set out several key principles. These included alignment with high-level policy objectives; a single objective; sustainable finance. Therefore, the Taxonomy then will serve as a common language across the different
ensuring the taxonomy was outcome-based with clear Key Performance Indicators, clear entity information jurisdictions to communicate and coordinate on labelling for economic activities and financial instruments.
on which activities and projects are covered; and a high degree of granularity to allow for proper assessment In the preamble, it was stated that ASEAN Taxonomy will be an overarching guide for AMS that caters to
of projects. More principles could be added to include interoperability, for example, there should be an the different ASEAN economies, financial systems, and transition paths. The environmental objectives of
ability to read across from one taxonomy to another to allow for an easier flow of investor funds from the ASEAN Taxonomy are universal and applicable to all AMS, in alignment with national environmental
one jurisdiction to another; and for example, inclusivity for the taxonomy should apply to as many sectors laws. The adopted criteria essential for the economic activities are aimed at achieving those objectives most
as possible to allow for as a broad range of economic sectors to benefit from it and to contribute to the transparently. Among the most important criteria are the “do no significant harm” (DNSH), and the existence
achievement of the overall high-level objectives. of remedial efforts to transition.
After the publication of Version 1 of the ASEAN Taxonomy, the ASEAN Taxonomy board called for
comments from stakeholders through consultations. Based on the inputs, Version 2.0 was released in June
2023. It is hoped that the update of the ASEAN taxonomy is expected to affect three main changes in the
sustainable finance space.
10 11
4.1 Overview of the ASEAN Taxonomy Design Foundation Framework (FF)
The ASEAN Taxonomy was conceived based on five Principles that have been designed to be, as much as The Foundation Framework applies to all AMS, stakeholders in the financial sector and business
possible, interoperable with taxonomies used in other jurisdictions. enterprises. The Foundation Framework and Plus Standard are underpinned by ASEAN’s commitment to:
1. Limit the global average temperature increases to well below 2°C, preferably 1.5°C, above preindustrial
1) The ASEAN Taxonomy will be the overarching guide for all AMS, providing a common language and
levels;
complementing their respective national sustainability initiatives.
2. Make each AMS climate-resilient; and
2) T he ASEAN Taxonomy will take into consideration widely used taxonomies and other relevant
3. Protect the environment, whereby the guiding principles for the assessment of economic activities act
taxonomies, as appropriate, and shall be contextualized to facilitate an orderly transition towards a
as the foundation to safeguard the climate and environment.
sustainable ASEAN.
3) The ASEAN Taxonomy shall be inclusive and beneficial to all ASEAN Member States. Under the Foundation Framework, economic activities must fulfil at least one of the environmental
4) The ASEAN Taxonomy shall provide a credible framework, including definitions, and where appropriate, objectives and all essential criteria.
be science-based.

5) The ASEAN Taxonomy will be aligned with the sustainability initiatives taken by the capital markets,
banking , and insurance sectors, or at least not conflict. Plus Standard (PS)
To be inclusive taking into consideration the diversity of AMS, taxonomy offers two assessment The Plus Standard provides additional guidance and scope for AMS to further qualify and benchmark
approaches, which are the Foundation Framework (FF) and The Plus Standard (PS) is illustrated in Figure 4. eligible green activities and investments. It also sets activity-level criteria and thresholds to determine if
an activity contributes to the environmental objectives of the Taxonomy and can therefore be considered
Taxonomy-aligned.
Figure 4 ASEAN Taxonomy Objectives, Foundation frameworks, and Standards.
This environmental objective aims to minimize or eliminate the negative effects of business operations
Foundation Framework(FF) on natural ecosystems and biodiversity. In this regard, an economic activity shall be considered as meeting
Qualitative based sector-agnostic screening criteria and decision flow the objective of environmental protection by fulfilling some or all of the following criteria, where applicable:
Environmental Objectives
1 2 Green-FF Amber-FF Red-FF 1. Enable ecosystem restoration and/or facilitate the protection of ecosystems.
Climate change mitigation Climate change adaptation
2. Implement necessary measures to protect ecosystems and biodiversity.

3 4 Plus Standard(PS)
Protection of healthy
Promote resource
resilience and transition to
3. Prevent soil erosion and run-off into watercourses.
ecosystems & biodiversity Technical Screening Criteria for 6 Focus Sectors and 3 Enabling Sectors
circular economy
Focus Sectors Focus Sectors 4. Enforce and empower existing policies related to the protection of natural areas.
Essential Criteria 1. Agriculture, forestry & fishing 1. Information & communication
2. Electricity, gas, steam and air 2. Professional scientific & technical
5. A dopt sustainable logging practices and ensure timber products are sourced from sustainably
1 2 Remedial Measures to
conditioning supply 3. Carbon capture, storage & utilisation
Do No Significant Harm
Transition 3. Manufacturing managed forests.
4. Transportation & storage
3
5. Water supply, sewerage, waste mgmt. 6. Meeting the goals set by the Convention on Biological Diversity 1992:
Social Aspects 6. Construction & real estate
(a) Terrestrial and marine biodiversity conservation;
Green-Tier 1 Amber-Tier 3
(b) The sustainable use of its components.
Version 2 enhancements
Amber-Tier 2 Red-PS (c) The fair and equitable sharing of the benefits arising from the utilization of genetic resources;
7. Business decisions take into consideration the equitable use of biodiversity and ecosystem services.
Source: ASEAN, 2021
8. A
void or minimize adverse impacts on the environment by implementing pollution control mechanisms.
9. Avoid or minimize emissions of short and long-lived climate pollutants.
This design recognizes a range of potential users (i.e., companies, investors, and governments) across 10. A
void or minimize the generation of hazardous and non-hazardous waste; and Minimise and manage
the region. the risks and impacts associated with pesticide use.
12 13
The Foundation Framework and Standards were developed to ensure the inclusive treatment of users environmental objective (EO) shall also not significantly harm any other EOs. An Activity interacts directly or
from diverse economic backgrounds. The FF was developed based on the principles of inclusivity and is indirectly with the surrounding environment. While the Activity may contribute towards EOs, it may cause
intended as a ‘starter’ assessment approach for AMS. The principles-based assessment approaches of the unintended significant harm to the broader environment. Assessment of DNSH to other EOs forms part
FF allow Activities to be assessed and classified using qualitative guiding questions. The PS was developed of the classification assessment of an Activity and is undertaken after ascertaining the contribution of an
as an advanced form of assessment approach with defined technical screening criteria. The Tier concept Activity against EO-specific objectives.
(elaborated in Section 2) is developed to accommodate different levels of development and varied economic
activities, which results in different starting points for AMS. The ASEAN Taxonomy Version 2 provides
direction on the classification at the Activity level and does not, at this juncture, provide any direction as to Essential Criteria
how to classify portfolios, entities, or financial instruments
A. Do no significant harm (DNSH)
An economic activity is generally location and context-specific and interacts directly or indirectly with
Six Focus Sectors and three Enabling Sectors have been identified given their significant contributions to
the surrounding environment. While economic activity may contribute towards environmental objectives,
both GHG emissions and the economy of Southeast Asia (Fig 5) . These sectors are covered under the PS.
economic activity may cause unintended harm to the broader environment. The principle of DNSH means

that an economic activity that contributes substantially to an environmental objective shall also not
significantly harm any of other environmental objectives. An assessment must be undertaken to ascertain
Figure 5 Focus and Enabling Sectors of ASEAN Taxonomy of Sustainable Finance
whether the economic activities are causing significant harm to the broader environment while fulfilling one
or more of the environmental objectives. In developing the criteria for DNSH going forward, ASEAN will take
into consideration parallel activities elsewhere, including the EU.
B. Remedial measures to transition
Proposed actions to mitigate climate and/or environmental impacts should be assessed against the
following considerations:
1. Actions should anticipate and avoid risks and impacts at the outset; and
2. If avoidance is not possible, minimize or reduce risks and impacts to acceptable levels.
The depth and breadth of assessment should be proportionate to the scale of business operations. While
due diligence may be deemed as sufficient for smaller operations, large-scale projects are often subjected
to more scrutiny by relevant authorities, which require businesses to conduct Environmental Impact
Assessments (EIA) prior to project commencement.
Any remedial actions taken to reduce risks and environmental impacts need to be taken at Technical
Screening Criteria (TSC) to be used in the Plus Standard to assess and classify Activities as Green or Amber
based on their contributions to EOs. The ASEAN Taxonomy has defined TSC for a range of Activities. There are
three main methods viz quantitative, qualitative, and the nature of activity by which TSC as identified in Table 2.
Source: -
Any financial activity which is to be classified under the ASEAN Taxonomy must also fulfil the minimum
requirements of three Essential Criteria (EC) of (1) Do No Significant Harm (DNSH) (2) Remedial Measures to
Transition (RMT) and (3) Social Aspects. DNSH refers to the principle that an Activity that contributes to one
14 15
Table 2 Technical Screening Criteria and Methods
5 An Assessment of ASEAN Taxonomy
Method Descriprion / Definition against Key Principles of other Emerging
• Impact based: minimum requirements for the impact (effect) on the
environment of carrying out the Activity (e.g., GHG emissions savings) Best Practices
• Performance in relation with the environmental target: minimum
threshold for the environmental performance of the Activity (e.g., a level ASEAN Taxonomy for Sustainable Finance could be seen as part of a wider regulatory ecosystem or
of GHG emissions per unit of Activity aligned with a climate neutral
toolkit incorporating other approaches and standards for example for green bond issues
economy)
• Best in class performance: minimum threshold (best in class) for the
Quantitative
environmental performance of the Activity (e.g., a level of GHG emissions In competing for private funds, AMS needs to ensure that it both has investible or bankable projects and
per unit of activity that only the best 10% markets players achieve)
a mechanism in place that allows investors to measure the sustainability of those projects. Though ASEAN
• Relative improvement: minimum improvement threshold for the
taxonomy is in its early stages, it is comparable with other established taxonomies of green financing in
environmental performance of the Activity (e.g., reduction of GHG
emissions per unit of Activity) terms of objective scope and targets.
• Note that, in the ASEAN Taxonomy, ‘Threshold’ relates to quantitative TSC
only

• Practice Based: a set of practices (best practice) for the Activity (e.g.,
Table 3 Comparison of ASEAN and EU Taxonomies
compliance with a set of qualitative criteria, code of conduct etc.)
Qualitative
• Process based: a set of process-based steps (e.g., a set of actions for points FEATURES ASEAN TAXONOMY EU TAXONOMY
of focus that need to be addressed)
1. Climate change mitigation
• An Activity that is automatically considered to be aligned with the
2. Climate change adaptation
Nature of the Activity respective classification due to the proven contribution of that Activity
(e.g., Activity that would always meet TSC, such as solar and wind energy) 1. Climate Change mitigation 3. Sustainable use and
Protection of water and
Source: Author 2. Climate Change adaptation
marine resources
3. Protection of healthy
4. Transition to a circular
Environmental Objectives (EO) ecosystems & biodiversity
economy
The foundation framework and Plus standards use color-coded classification systems that represent 4. Promote resource resilience
5. Pollution prevention and
and transition to circular
different levels of contribution to an environmental objective by an activity. A Green classification means that control
economy
6. Protection and restoration
the Activity is making a substantial contribution to the environmental objectivity. The Amber classification is
of biodiversity and
present in both approaches. In the PS, it is used to denote ‘transitional’ activities. Amber Activities, while not ecosystems.
meeting green classification criteria, represent a progressive movement on the path to a more sustainable Classification System ISIC NACE
ASEAN with due consideration to the practicalities of implementing sustainable activities. AMS may opt to Do No Significant Harm
Yes Yes
begin with lower Tiers (2 or 3) for a limited period before progressing to Tier 1. Therefore, ‘transitional’ tiers (DNSH)
i.e., Tiers 2 and 3 encourage continued progression towards a sustainable future. An Amber classification Remedial Measures to
Yes - to facilitate transition No
Transition (RMT)
may also be used to temporarily classify an Activity for which some remediation of harm is outstanding A
Yes - alignment with the OECD
Red classification means that the Activity is not aligned with any of the environmental objectives or causing
Guidelines for Multinational
significant harm to any of them. Enterprises(OECD Guidelines)
Minimum Safeguards Yes - Social Aspects
and the UN Guiding Principles
on Business and Human
Rights(UNGPs)
Yes, using Foundation

Activity classification Straight to TSC
Framework
Technical Screening Criteria Up to three thresholds Single threshold
Source: -
16 17
For example , in the case of EU taxonomy activity level criteria are aligned with the target of net zero Another key concern with the ASEAN Taxonomy is that it is not legally binding, since it is intended to
GHG emission by 2050, and in the case of ASEAN, its taxonomy supports high-level ASEAN commitments provide a common framework for interoperability across national markets. Although this by itself is a strong
towards sustainability linking Paris Agreement commitments and NDCs. In EU taxonomy transition and step forward, it could be expected the smaller economies to benefit from this, when larger countries within
enabling components are included and subject to review every three years. In ASEAN transition components the region deviate from the framework to form their taxonomy interpretations. This may lead to continued
are included but activity-level assessments are to be developed and use the International Standard Industrial fragmentation rather than a firm regional position.
classification. The outputs are measured as binary in the EU, while ASEAN taxonomy traffic light systems are
used for both foundation work and standards. Another aspect that is subject to much debate is the multi-tiered approach in ASEAN taxonomy. Although
flexibility is provided for member nations, the structure is highly complex, and it is difficult for users to track
The EU Taxonomy has six environmental objectives: (1) Climate change mitigation; (2) Climate change the different assessment criteria for the same activity across nations. In addition, not all activities under the
adaptation; (3) Sustainable use and protection of water and marine resources; (4) Transition to a circular taxonomy would be aligned to the Net Zero by 2050 goal, which implies that investors from jurisdictions
economy; (5) Pollution prevention and control; and (6) Protection and restoration of biodiversity and with more stringent taxonomies would have to consider if they could leverage the ASEAN taxonomy while
ecosystems (TCFD, 2021). considering local requirements they must meet.
While EU standards are often seen as the gold standard for climate actions, AMS are finding its own path

However, it is also clear that further work is needed particularly in the areas of interoperability, which
to contribute to climate action. Importantly, to a higher degree than Europe, ASEAN countries are still heavily
is even more important in a region where AMS and their trading partners, China, India are developing
dependent on fossil fuels in the medium term. Activities that enable a low-carbon transition from these fuels,
their own national taxonomies and in the development of verification and assessment tools for measuring
such as natural gas, are more likely to be included in the region’s green taxonomy. This makes it challenging
progress (Box 1).
to align the two blocs’ sustainability taxonomy.
On the other hand, the ASEAN Taxonomy shares four of the six environmental objectives of the EU
Box 1 Evolving National Taxonomies/Guidelines for Sustainable Finance in Asia
Taxonomy but does not share the two following objectives: (3) Sustainable use and protection of water and
marine resources and (5) Pollution prevention and control.

• Australia - Australian Sustainable Finance Initiative (ASFI), a financial sector-led sustainability
The EU Taxonomy uses three criteria to determine whether an activity is “environmentally sustainable”. organization, has organized a call in March 2022, hoping to establish a form of taxonomy
They are: (1) Makes a substantial contribution to one of the six environmental objectives and meets relevant • China - Established EU-China Common Ground Taxonomy in Nov 2021
technical screening criteria (TSC); (2) Does no significant harm to the other five environmental objectives and • Hong Kong - The Cross-Agency Steering Group launched Centre for Green & Sustainable Finance
meets relevant TSC; and (3) Comply with minimum safeguards. (GSF Centre) in June 2022
• Indonesia - Green Taxonomy Sustainable Finance OJK – guidance rather than mandatory
The ASEAN taxonomy uses a similar set of criteria as the EU Taxonomy, but with an additional criterion: • Japan - Launched Basic Guideline on Climate Transition Finance in May 2021, not considered as
(4) An obligation to avoid causing social harm - incorporated in Version 2 to highlight the importance of taxonomy but rather a principle-based guideline.
social aspects. • Korea - K-Taxonomy established in April 2021 that outlines criteria and principles that consider the
economic activity to be considered green.
The ASEAN Taxonomy has certain common grounds and some important differences when compared to
• Malaysia - Bank Negara Malaysia (BNM) published Malaysia’s national climate-focused sustainability
the EU Taxonomy. The current EU taxonomy focuses largely on activities that are unconditionally green and taxonomy for the financial sector, the Climate Change and Principle-based Taxonomy (CCPT) in April
does not yet fully address transition activities toward net zero. Binary taxonomies such as the EU Taxonomy 2021
simply classify whether or not an activity is green. It also includes transitional activities for which low-carbon
alternatives are not yet available.
Improved ASEAN aligned with international benchmarks can align underlying principles and inform
ASEAN Member States (AMS) policymakers, financial market stakeholders, and international investors how to
make sound sustainable financing decisions.
18 19
This Taxonomy-driven capacity building may also help compensate for a perceived lack of standards in
• Philippines - Sustainable Finance Roadmap launched in 2021 highlighting the importance of, and the market both globally and regionally as well as help coordinate and guide regulatory frameworks,
planning the development of a Green Taxonomy
national taxonomies, and financial market policies for climate change mitigation, adaptation, and resilience
• Singapore - GFIT (Green Finance Industry Taskforce) is expected to release the criteria & and
investment and solutions.
thresholds for the remaining five focus sectors and the remaining environmental objectives in late
2022, and to finalise the full Singapore Taxonomy in 202378
Realizing the stated environmental objectives at the same time as building economic resilience will
• Stock Exchanges in six ASEAN countries Indonesia, Malaysia, the Philippines, Singapore, Thailand,
require the widespread transition to a green economy. Yet, due to its systemic nature, early stage of
and Vietnam, require sustainability reporting in accordance with national guidelines. These
development, low data availability, and limited awareness among the financial sector of circular business
guidelines are not standardized across countries, which also makes it difficult for investors to
benchmark sustainability performance across companies and industries within ASEAN. models, adoption of low-carbon circular economy practices remains low and a significant financing gap
exists. ASEAN taxonomy promises to provide financial markets with clarity on the economic activities that
Sources: Bank Negara Malaysia (2021), Government of Japan (2021), NGFS (2019), G20SFWG (2022)
substantially contribute to a low-carbon circular economy, while at the same time directing finance towards
those activities. Nonetheless, ASEAN taxonomies is in the early stages of maturity, particularly when it
The latter of these is recognized within the ASEAN Taxonomy with the admission that the metrics and comes to embedding key performance indicators for sustainability investments. There are several unique

thresholds as available in EU taxonomy are still to be determined and may likely depend on the national challenges involved in embedding the low-carbon circular economy within a sustainable finance taxonomy.
taxonomies being developed in AMS- Indonesia, Malaysia, Philippines, Singapore-Thailand, and Vietnam, The lack of binding multilateral agreements or targets on the circular economy, as well as globally recognized
China, India, Japan, Korea, etc. A common Ground Taxonomy analysis – a comparison between other global/ definitions, standards, and methodologies for metrics and reporting, makes it difficult to develop objective
regional /national taxonomies - constitutes a first step in identifying the need for interoperability of ASEAN goals, substantial contributions, and DNSH criteria. Furthermore, the current NDC policies, circular economy
taxonomies, and how this may be further developed in the future. With taxonomies being developed by a policy, and legislative landscape is becoming increasingly fragmented and lack the ambition and clarity
growing number of jurisdictions, regulatory and market fragmentation is a real risk. Taxonomies must be necessary to encourage widespread investment in substantial contribution activities. The EU CEAP takes a
interoperable to facilitate cross-border sustainable finance and lower compliance costs. step towards this but remains limited in its economic scope.
Existing taxonomies are also limited in that do not consider equally the need to shift away from
significantly harmful linear activities or the need to encourage low carbon transition activities in sectors
where substantial contribution by the private sector cannot be achieved. Nor do they consider the need to
6 Conclusion and Recommendations continue financing activities that currently ‘do not harm’ but are important enablers of the green economy
transition.
The ASEAN Taxonomy is a sustainable finance taxonomy with an initial focus on environmental
objectives. It is intended as the reference point for sustainable projects and activities in ASEAN to help issuers Finally, the complexity of MRV systems in reporting the transition should not be underestimated. Levels
and investors understand the sustainability impact of a project or economic activity. This will result in a more of maturity in terms of metrics and methodologies remain low, while access to the relevant data required to
informed and efficient decision-making process. There are regional challenges with funding, technological report is limited. The lack of available data and the cost associated with gathering such data can result in low
capacity, and general awareness. These can be addressed by capacity building and guidance in financial levels of enthusiasm and participation among investors.
markets.
To enhance ASEAN taxonomy to accelerate the green transition, policymakers and practitioners must
A Taxonomy for Sustainable fiancne can help align principles and inform financial market policymakers consider the following actions.
and stakeholders, as well as international investors. The Taxonomy will also help to identify technologies that
can most effectively help AMS to reach its net-zero goals. This includes low-carbon technologies themselves,
such as renewable power generators, but also enabling technologies, such as control, communication, and
monitoring of these generators and their associated networks. A common language will make it simpler
to gather data consistently and to disseminate this to investors, state agencies, and other stakeholders.
20 21
1) Strengthening ASEAN taxonomy architecture 3) Improving Taxonomy Usability through International Cooperation
· Engage with and learn from industry associations and individual companies that have managed to · Provide financial and capacity-building support to further develop and improve the adoption of circular
integrate circular economy principles into a profitable business model and disseminate lessons to economy metrics, data collection, and reporting processes
wider stakeholder groups;

· Increase targeted awareness-raising on the circular economy as a business strategy via peer learning
· Task Technical Working Groups to seek solutions to further embed and incentivize the adoption of the and business campaigns
waste hierarchy principles, measurable thresholds, and requirements and mechanisms that foster
· Train accountants, and legal and fiscal specialists to navigate the added layers of complexity that
wider supply‑chain collaboration
low carbon circular economy requirements, minimum performance standards, and the use of waste
· Ensure DNSH criteria for the circular economy are consistent and objective by engaging with science- hierarchies entail.
based expert advice, reached by consensus with all stakeholders represented including civil society
Nevertheless, The ASEAN taxonomy for Sustainable finance acts as an overarching guide for the
· Consider how mechanisms for continuous improvement are built into a taxonomy – paying particular
classification of financing sustainable activities and creates a common language for sustainable finance in
attention to the creation of objective, qualitative criteria in place of qualitative TSC and DNSH
AMS. Consistency among national taxonomies is needed. Nevertheless, the ASEAN taxonomy also details

· Assess the merits of extending existing taxonomies to account for the green economy transition and how it can be applied by different users
enabling activities.
· ASEAN governments and their trading partners can be guided by the ASEAN taxonomy when setting
sustainability reporting or carbon disclosure reporting requirements.
2) Creating an enabling policy and legislative environment
· A company or banking institution in other countries may apply ASEAN Taxonomy in issuing corporate
· For governments and policymakers seeking to introduce, discuss, and vote into law objective and green bonds and reporting on bond sustainability credentials
legally binding national targets for the low-carbon circular economy.
· Asset managers in ASEAN+3/6 may use the ASEAN taxonomy to guide their investment decisions.
· Ensure the goal of the low carbon circular economy objective within their taxonomy aligns with and
· Rating agencies may apply ASEAN taxonomy to derive ESG ratings.
supports such targets.
· Participate in, and encourage, multilateral discussions on:
· Harmonizing circular economy elements of taxonomies in a context of increasing policy and legislative
fragmentation; and
· Providing financial and capacity-building support to suppliers in critical supply chains that will be most
affected by the circular economy transition (particularly SMEs in low-income countries).
· For existing working groups on sustainable finance, Improve global comparability and interoperability
of taxonomies; and
· F or multilateral development finance institutions: Provide regulators engaged in developing

taxonomies with conceptual frameworks and procedural guidance on how to include low-carbon
circular economy objectives and
22 23
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24 25
Circular Economy Landscape
economic growth, it has created favorable conditions for increased industrialization, modernization, poverty
reduction, and increased job creation. However, while economic growth brings obvious benefits in terms of
in Vietnam social security, the environment is also under great pressure. Numerous notable environmental catastrophes
in recent years have “woken” state management agencies, businesses, and people to the importance of
environmental protection. Moreover, energy production relying on fossil fuels is an additional aspect causing
Bui Le Thanh Khiet1) | Le Ba Nhat Minh1) Vietnam’s environmental deterioration to worsen (Nguyen et al., 2021; Phong et al., 2018).
Nguyen Minh Tu1) | Truong Thi Ai Nhi1) | Nguyen Hong Quan1)
Figure 1 Vietnam’s GDP Growth Rate between 1985-2022
12.00 Vietnam GDP growth(annual %)
10.00 9.54
9.34
8.65
8.84 8.02
8.00 8.15 7.54 7.55
7.36 8.07 7.46
1 Status of Economic Development and

6.79 7.13 6.99 6.94 7.36
6.42 6.41
6.90 6.98
6.00 6.42 6.69
5.96 5.76 6.19 6.32
Emissions in Vietnam
5.14 5.66 5.55
5.40 5.50
5.10 4.77
3.81
4.00
3.58
2.79 2.87 2.56
Circular Economy Landscape in Vietnam

2.00
Vietnam is a country in Southeast Asia that occupies 330,000 km 2. The population of the nation is
constantly growing from 86.95 million in 2010 to 99.48 million in 2022 (General Statistics Office of Viet 0.00
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Nam, 2023). Vietnam’s economy is a developing socialist-oriented market economy, heavily dependent Source: World Bank, 2023
on agriculture, tourism, crude exports, and foreign direct investmen. The Communist Party of Vietnam
advocates building a socialist-oriented market economic system in Vietnam. To date, 72 countries have
Vietnam’s economy depends mainly on fossil energy such as oil and coal, which is a large source of CO2
recognized Vietnam as a market economy, including large economies such as Canada, Australia, Japan, and
emissions (Raihan and Tuspekova, 2022) and contributes to global warming (Friedlingstein et al., 2010).
South Korea and most recently, the UK issued an official letter recognizing Vietnam’s market status (VCCI,
Vietnam has had remarkable economic growth, but it is also dealing with severe environmental issues, most
2023). Economically, Vietnam is a member country of the United Nations, the World Trade Organization,
notably global warming. Figure 2 depicts a rising trend in Vietnam’s per-capita CO2 emissions between 1990
the International Monetary Fund, the World Bank Group, the Asian Development Bank, the Economic
and 2022. The amount of CO2 emissions has grown about six times in the last thirty years. Vietnam’s CO2
Cooperation Forum Asia-Pacific, Comprehensive and Progressive Agreement for Trans-Pacific Partnership,
emissions are rising at a startling rate. From Fig. 2, it can be seen that CO2 emissions per capita in Vietnam
ASEAN, etc.
are increasingly reaching the world average. The nation is thus quite concerned about the rising emission
Over the past forty years, Vietnam, a developing nation, has had notable economic growth (Nguyen et intensity, particularly from the energy sector. As a result, the need to understand the relationship between
al., 2021). Vietnam is one of the world’s fastest-growing transitional economies, having gone from being a economic development, energy consumption, and CO2 emissions has become more pressing in Vietnam’s
low-income nation to a lower-middle-income one (Nguyen et al., 2021). From 30 billion USD in 1986 to 259 discussion over the adoption of energy conservation legislation.
billion USD in 2020, Vietnam’s gross domestic product (GDP) grew by about nine times (World Bank, 2023).
Between 1988 and 2000, the average annual growth rate of the nation was 7.1%, whereas between 2000
and 2015, it was 6.4%. Due to the effects of the global financial crisis in 2008 and the European debt crisis in
2010, the growth rate slowed between 2000 and 2015, although it was still greater than that of the majority
of other nations (Fig. 1). With an annual GDP growth rate of 7% in 2019, it is the 23rd fastest-growing
economy globally and the second fastest-growing in Southeast Asia (World Bank, 2023). Along with rapid
1) Institute for Circular Economy Development (ICED), Vietnam National University - Ho Chi Minh
26 27
Figure 2 CO2 Emissions Per Capita in Vietnam and the World the agriculture, forestry, and land use (AFOLU) sector are 44,069.74 thousand tons of CO2 equivalent. Of
these, the waste sector accounts for the smallest amount at 20,738.38 thousand tons of CO2 equivalent, or
6.00
6.5%, and the third largest portion, at 39,491.24 thousand tons of CO2 equivalent, is accounted for by soil
Annual CO2 emissions (per capita) (ton)
5.00 absorption. Analysis of the main GHG emission sources/sinks in 2016 shows that 42 sources are responsible
4.00 for 95% of the nation’s net emissions. Burning fuel to create electricity is the primary emission source,
3.00 accounting for 20.6% of the total 158 emission sources/sinks that were calculated. With a share of around
2.00
60.5%, CO2 emissions make up the greatest component, followed by CH4 gas at roughly 33.7%. The results
of the greenhouse gas inventory in this BUR3 report increased by 13.7% compared to the previous report
1.00
(BUR2), specifically: i) the energy sector increased by 17.3%; ii) the IPPU sector increased by 19%; iii) the
0.00
AFOLU sector decreased by 2.1%; and iv) the waste sector increased by 7%.
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Vietnam world
Source: Global Carbon Budget, 2023
Apart from CO2 emission, Vietnam is facing with environmetal pollutions. Air pollution is one the most
concerning issues in Vietnam, especially in the big cities such as Ha Noi and Ho Chi Minh Cities. Ocean plastic
Recognizing the importance of reducing global greenhouse gas emissions as well as understanding
pollution is another internatinal recognized problems. Furthermore, dosmestic solid waste, wastewater are
the extent of its impact on the nation’s socio-economic development, Vietnam has supported the United
not well collected and treated causing river water pollution, groundwater contamination in many places in
Nations Framework Convention on Climate Change and proactively participated in legal agreements related

Vietnam. Though the goverment has implemented a number of regulations, policies over the last several
to climate change mitigation. Specifically, Vietnam signed the Climate Convention in 1992 and ratified it in
decades, the efforts seem reach some limitations of success. The goverment of Vietnam is seeking some new
1994; signed the Kyoto Protocol in 1998 and ratified it in 2002; established the National Steering Committee
economic model that in one hand supportung the country’s growth, in another hand solving environmental
for the implementation of the Climate Convention and the Kyoto Protocol; sent the Secretariat of the Climate
related issues, decarbonization.
Convention the First National Communication (2003), the Second National Communication (2010), and the
Biennial Update Report (2014, 2017, 2020), reflecting the latest efforts on climate change response and
greenhouse gas (GHG) inventory.
Vietnam is one of the countries with continuously increasing GHG emissions, from approximately 20 2 Vietnamese Policies related to Circular
million tons (in 1990) to 355 million tons of CO2 (in 2020). Vietnam’s economy is expanding steadily, leading Economy
to increased energy demand and greenhouse gas emissions. Governments attempting to balance climate
change mitigation with sustainable development are finding it more important to comprehend Vietnam’s Vietnam has for a long time committed to realizing the Sustainable Development Goals (SDGs) to achieve
susceptibility to climate change. Vietnam is encouraging the use of renewable energy, such as industrial socio-economic development and environmental sustainability. The SDGs have become consistent goals
solar energy, to reduce GHG emissions. Develop and implement projects to limit GHG emissions in the fields and have been thoroughly mainstreamed into the socio-economic development plans and strategies of the
of urban planning, energy, transportation, industry, water management, waste management, construction, country, such as the 2021-2030 socio-economic development strategies and the National master plan for the
healthcare, agriculture, industry, and tourism. 2021-2030 period, with a vision to 2050. At the United Nations Climate Change Conference (COP 26) in 2021,
Vietnam offered a strong commitment to obtain net zero emission by 2050. The government of Vietnam
has released the decision No. 888/QD-TTg dated July 25, 2022 on approval for scheme setting out tasks
According to the third Biennial Updated Report of Viet Nam (BUR3) for the UNFCCC (MONRE, 2020), in and solutions for implementation of outcomes of the 26th Conference of the Parties to the United Nations
2016, there were 316,734.96 thousand tons of CO2 equivalent in net greenhouse gas emissions. The energy Framework Convention on Climate Change and several decisions (i.e. Decision 01/2022/QD-TTg promulgating
sector is responsible for the greatest amount of GHG emissions, accounting for 205,832.20 thousand the list of sectors, greenhouse gas-emitting establishments subject to greenhouse gas inventory) to realize
tons of CO2 equivalent, or 65% of total emissions. The industrial processes and product uses (IPPU) sector the COP 26’s target.
follows with 46,094.64 thousand tons of CO2 equivalent, or 14.6% of total emissions. The net emissions of
28 29
In line with these long-term sustainable development strategies and to address several challenges from The national decisions have created a framework for the release of several provincial plans to apply the
resource depletion and environmental pollution, Vietnam has recognized and adopted the circular economy CE concepts. At the provincial level, for example, Ho Chi Minh City, An Giang, Quang Ngai, and Binh Duong
(CE) concepts and principles as a promising approach to achieve resource use efficiency and environmental released the development plan to implement Decision 687/QĐ-TTg right after the release of the national plan
protection. The government of Viet Nam has already released several policies to create and enable a legal (i.e. Decision 2155/KH-UBND on Implementation plan of the Project “Developing the digital economy, sharing
environment for the transition to a circular economy in the country. economy and circular economy in Ho Chi Minh City in the period 2020-2025, vision 2030” in 2023, the Circular
Economy Development Roadmap of Da Nang City). Ba Ria-Vung Tau is one of the first provinces to develop a
At the national level, the CE concept has been specified in several policies and plans, such as the comprehensive plan to implement the CE at the provincial level (for Con Dao District).
Resolution for the orientation of national energy development strategies of Vietnam until 2030, the vision
to 2045 of the Politburo of the Communist Party of Vietnam (Resolution No 55NQ/TW) in 2020, and the Currently, several efforts to facilitate the transition to a circular economy have been deployed by both
Resolution of the 13th National Party Congress in 2021. The Law on Environmental Protection in 2020 government agencies and business sectors. From the governmental side, indicators and standards on
(taken effect in 2022) also has several sections specifically addressing the circular economy. The Law on circular economy products and processes have been released or undeveloped. Plans for the implementation
Environmental Protection in 2020 highlights the responsibilities of ministries and localities to integrate the of CE, as assigned in decision 687/QĐ-TTg, have also been released by various ministries and provincial
circular economy into planning strategies, development plans, and environmental and waste management. levels. The next steps will be translating these policies and plans to lower levels and to the industry, which
The Law on Environmental Protection in 2020 also introduces the concept of circular economy by fostering requires the engagement of companies, enabling policies, customers, and other public and private actors to
an extended producer responsibility (EPR) policy, highlighting the responsibility of producers and importers create an enabling environment for the sustainable operation of circular economy business models.
to recycle products and packaging (Cece Nguyen and Thu Nguyen, 2022).

On June 7, 2022, the Prime Minister of Vietnam approved a national scheme to develop the circular Table 1 Overview of CE Policies and Regulations in Vietnam
economy in Vietnam. The national policy sets specific goals and solutions to develop the circular economy
Policies Main Content/Objectives related CE Level
in the country, including building a circular economy to create motivation for innovation and improve
The resolution provides orientation for energy
labor productivity, promoting green growth in line with restructuring the economy and growth models,
Resolution No. 55-NQ/TW on the development to 2030, vision to 2045, to ensure
and improving the competitiveness and resilience of business sectors and supply chains against external orientation of Vietnam’s National Energy national energy security and foster energy
National
Development Strategy to 2030, vision to (including renewable energy) development in the
fluctuations. Decision 687/QĐ-TTg on approving the Scheme on development of circular economy in Vietnam
2045 country. CE is also mentioned as a target from
has set a another management framework for the implementing circular economy at various levels. applying renewable energy in the resolution.
The law offers definition, principles of CE in waste

Following this decision, a draft on regulatory sandbox for circular economic development in various management and environmental protection
Environmental Law 2020 National
sectors is under-developed by the Ministry of Planning and Investment. The proposed mechanisms support in several articles (i.e. Article 142 on circular
economy).
the conversion, establishment, expansion, and new development of large-scale projects, industrial clusters
The decision provides the scheme for CE
and industrial parks, and economic and export processing zones, focusing on the 4 sectors of (i) agriculture,
Decision 687/QĐ-TTg on approving the development for various businesses and
forestry, and fisheries; (ii) the industrial sector; (iii) renewable energy; and (iv) construction materials. The Scheme on development of circular economic sectors nationwide. Specific tasks and National
economy in Vietnam responsibilities for various agencies are also
proposed supporting mechanisms include preferential land use policies, personnel development support,
provided.
financial support, technology training and transfer, and flexible governance for projects applying circular
Decree No. 13/2023/TT-BKHĐT on
economy models. In 2022, the Prime Minister of Vietnam issued a program to support the private sector in
Guidance on the mechanism for
The decree guides mechanisms to support
sustainable business development for the period 2022–2025, of which the circular economy is considered organizing the implementation of the
private-sector enterprises with sustainable National
“Program to support private sector
one of the sustainable and desirable business models. Following this decision, the Ministry of Planning and business
enterprises with sustainable business
Investment released a circular in December 2023 to guide the implementation of the program to support for the period 2022-2025”
the private business sector in operating sustainable business models (Decree No. 13/2023/TT-BKHĐT on
Guidance on the mechanism for organizing the implementation of the “Program to support private sector
enterprises with sustainable business for the period 2022-2025”).
30 31
Policies Main Content/Objectives related CE Level
3 Suggestions for Circular Economy
The decree provides the scheme and plan for
construction and development of industrial parks Development in Vietnam
Decree No. 35/2022/ND-CP dated May and economic zones; investment in infrastructure,
28, 2022 on management of industrial establishment, operation, development policies National
parks and economic zones in Vietnam and state management of industrial parks and
economic zones. Support for industrial symbiosis 3.1. Integration of the circular economy in socio-economic
and eco-industrial zones are also targeted.
development
The decision proposes targets, tasks, activities
Decision No. 889/QD-TTg on the
and assigned responsible agencies and resources
National Action Program on Sustainable At the national level, the concept of a circular economy has been integrated into the socio-economic
to promote the implementation of sustainable National
Production and Consumption in the development strategy for 10 years 2021-2030. In detail, the section on Directions, tasks and solutions for
production and consumption models toward a
2021-2030 period
circular economy in Vietnam socio-economic development mentioned: “proactively monitor and respond effectively to climate change;
Draft Decision of the Prime Minister develop green economy – reduce waste, greenhouse gas emissions, carbon emissions; encourage the
approving the Project for scientific The draft decision aims to develop and apply National
development of circular economy models for integrated and efficient use of output from the production
development and application and science and technology to realize CE practices in (under
technology transfer to promote circular agriculture in order to achieve the set targets developed) process”. In addition, the Action program of the Government for the 2021 - 2026 term implementing the
economy in agriculture until 2030

Resolution of the National Assembly on the 5-year socio-economic development plan 2021 – 2025 also
The decision provides strategies to accomplish
highlighted to develop roadmaps, mechanisms, policies, and laws to form and operate green economy,
Decision No. 1658/QD-TTg approving green growth, thereby contributing to the
the National Green Growth Strategy for restructuring of the economy in conjunction with National circular economy, low carbon economy.

2021-2030 period, vision to 2050 renewing the growth model, striving towards a
green and carbon neutral economy
At the local level, several provinces and cities are pioneering to establish schemes and plans to deploy
Decision 2155/KH-UBND on
the circular economy. For instance, Da Nang has developed a roadmap to develop circular economy
Implementation plan of the Project
The decision assigns tasks and objectives for
“Developing the digital economy, (with the support of UNDP). On the other hand, Ho Chi Minh City People’s Committee has approved the
specific sectors to implement CE at the provincial Provincial
sharing economy and circular economy
level Circular Economy Development Plan in the city for the period 2022-2025, with a vision to 2030. At the
in Ho Chi Minh City in the period 2020-
2025, vision 2030” in 2023 district level, Con Dao District (Ba Ria – Vung Tau Province) is the first district in Vietnam integrates circular
Decision 152/KH-UBND on Plan on economy in socio-economic development activities. Though, circular eocnomy can play an important role
Research and Application of Circular in socio – economic development plan at the local level, there has been limited integration of circular
The decision assigns tasks and activities to
Economy for Sustainable Socio-
responsible agencies for the implementation of Provincial economy solutions the (master) socio-economical development plan of the province (McClellan et al, 2022).
Economic Development in Con Dao
CE solutions in Con Dao Island
District, Ba Ria-Vung Tau Province (2022- Futhermore, there is also the need for mainstreaming circular economy for regional development cross the
2025, vision 2030)
countries.
The Roadmap has been developed by the City’s
People’s Committee with the support from the UN
The Circular Economy Development Development Programme (UNDP). The tasks and
Provincial
Roadmap of Da Nang City solutions in the Roadmap aim to support Da Nang
3.2. Promoting international cooperation in circular economy
City to achieve the set goals of circular economy
development by 2030
Initiatives from international cooperation root into the supporting mechanisms in terms of finance
Source: Compiled by authors
and technical transfer at the national and local scales. Cooperation with international organizations plays
a pivotal role in building corridor mechanisms to promote the implementation of the circular economy.
United Nations Development Programme (UNDP) has supported Vietnam in setting up the Viet Nam
Circular Economy Hub. The Hub aims to enhance dialogue, generate know-how, and mobilise collective
32 33
2)
action towards the CE transition in Vietnam. The Economic and Social Commission for Asia and the Pacific afforestation, forest protection, and circular economy to help Vietnam fulfill its net-zero commitments
(ESCAP) connects with cities to exchange and discuss solutions related to the green economy and circular by 2050.
economy. ESCAP commits to sharing resources and experiences related to mechanisms related to carbon
credit and other issues related to Low Carbon growth. Meanwhile, United Nations Industrial Development The ministerial cooperation aims to develop capacity and exchange expertise. For example, The Korean
Organization (UNIDO) coordinated with the Ministry of Planning and Investment of Vietnam to develop a Ministry of Environment will support costs for students with a 2-year program and host local leaders to visit
circular guide and set specific criteria to evaluate eco-industrial parks, aiming to have the first industrial and work in Korea for the sake of Domestic waste treatment; technology transfer, sustainable development,
parks in Vietnam. UNIDO is starting to research urban-industrial symbiosis solutions, the models of which green growth, etc. Besides, cooperation agreement with the Israeli Government in the field of innovation
are expected to be spread to industrial parks. UNIDO is building a 5-year strategic cooperation framework and startups to promote investment and trade on the basis of VIFTA; transfer of science and technology on
with the Government of Vietnam in support of capacity building, industrial policy, and improving value dealing with problems caused by climate change; renewable energy; and high-tech agriculture. For example,
chain competitiveness towards improving the knowledge industry and sustainable development in Vietnam. two governments can reach an agreement on supporting and transferring the wastewater circulation
The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and other international development technology, as Israel can reuse 95% of domestic wastewater to serve agricultural activities.
insitutions have been also provided various technical supports for Vietnam through different Ministries (e.g.
Ministry of Indutry and Trade, Ministry of Natural Resources and Environment, Ministry of Agriculture and
3.3. Supporting enterprises in circular transition
Rural Development) in the field of Circular Economy.
The business sector plays a key role in accelerating the transition, application, and operation of
To implement the decarbonizing pathway to meet international commitments, Vietnam requires
circular business models, low-carbon technologies, and clean technologies. In Vietnam, small and

$114 billion until 2040, including $81 billion in investments on energy transition, industry, transport, and
medium enterprises (SMEs) account for 96% of the total number of companies, employing 47% of labor
agriculture; and $33 billion for social programs. Accordingly, various support from financing bodies have
and contributing 36% to the national value added. Thus, there is a need for policies and mechanisms to
eased this challenge.
support enterprises, especially SMEs, in the circular transition. In addition, Vietnam is participating in many
free trade agreements, in which, notably, commitments to ecological and environmental safety standards
· The World Bank has proved the commitment to support Vietnam with climate financing through
are prominent. Thus, adopting circular business models can also bring many opportunities for economic
different instruments, such as Emission Reduction Linked Bond of US$50 million, Emission Reduction
diversification and support businesses in accessing high-quality, greater value-added markets.
Payment Agreement of US$41 million, and green bonds with local commercial banks worth up to
US$100 million. According to Scheme on circular economy development in Vietnam (Decision 687/QĐ-TTg), specific
goals aimed to “increase awareness and investment of domestic and foreign businesses and investors
· The International Monetary Fund (IMF) proposes to support Ho Chi Minh City in solving problems
in the circular economy”. In order to do that, the solutions are to “strengthen public-private dialogue on
related to climate change, in which physical measures will be applied to reduce greenhouse gas
circular economy development based on promoting corporate social responsibility; find out the needs and
emissions. The IMF will send experts and advisors to Ho Chi Minh City to support, consult, and provide
problems of businesses to have appropriate solutions and support”. Following this Scheme, the Ministry of
direction in green finance and green investment for local initiatives. The corporation is also aimed at
Planning and Investment currently working on a Draft Decree on regulatory sandbox for circular economy
building an action framework on carbon credits through international consulting agencies, IMF experts,
development. Enterprises participating in this regulatory sandbox will have several advantages in consulting,
and advisors based on the implementation of Resolution No. 98.
technology transfer, human resource development support, green credit policies, green bonds, and land
· Vietnam and the European Investment Bank signed a memorandum of understanding to support
policies (discussed detail on section 3.4).
the implementation of the Just Energy Transition Partnership (JETP) in Vietnam, signifying a mutual
commitment to put in place a multi-projects credit facility worth €500 million. In reality, several new production and business models approaching a circular economy have already
been adopted by the private sector. For example, Nestlé Vietnam has obtained “zero waste-to-landfill”
· Japan gave Vietnam the biggest-ever ODA package, supporting infrastructure, manpower, and post-
since 2015 by designing to avoid unnecessary packaging, reducing the use of virgin plastic, and replacing it
pandemic economic recovery. More precisely, in 2023, Vietnam got a loan agreement worth US$435
with environmentally friendly materials. Currently, 100% of Nestlé Vietnam’s coffee grounds are reused as
million with the Japan International Cooperation Agency ( JICA) to boost low-emission activities like
biomass materials. Non-hazardous waste sludge from production activities is used to produce biofertilizers.
Waste sand from boilers is used for construction projects (Nestlé Vietnam, 2023). Circular agricultural
2) https://www.undp.org/vietnam production models have also been applied in other sectors, such as smallholder farms and large-scale
34 35
agricultural enterprises (such as Hoa Lam, TNT 159, Vinh Hoan). Improvement of living standards in the city
is considered one of the incentives for the consumption of environmentally friendly products, including those
4 Conclusion and Recommendations
produced under circular economy models. In conclusion, Vietnam is making efforts to develop its economy sustainably, minimizing negative
impacts on the environment. Thus, circular economy is a model to focus on. There have been several policies
related to circular economy that have been enacted in Vietnam. These policies come from Party Resolutions,
3.4. Sandbox mechanism for circular economy development Laws, Strategies, Action Plans at both the central and local levels. However, to implement circular economy
successfully, Vietnam has faced several challenges, such as lack of resources, low awareness from enterprises
The implementation of circular economy has faced several challenges such as (1) limited capacity for
and customers, institutional constrains, and limited international collaborations. Thus, there are some
technologies, finance, and human resources of enterprises and organizations; (2) the current regulations do
recommendations:
not allow for a breakthrough in circular economy. Thus, to tackle difficulties, the Ministry of Planning and
Investment is currently working on a Draft Decree on regulatory sandbox for circular economy development.
· F irstly, Vietnam must assign a specific body to oversee/facilitate the implementation of circular
This Decree aims to support investors and businesses to test and pilot ideas and initiatives related to circular
economy crossing all related sectors/minitries. In addition, the Government must prioritize financial
economy.
and technological resources, and develop highly skilled human resources for circular economy
transition. This is especially true considering in the industry 4.0 and Green era.
Four sectors are applying this pilot mechanism, which are agriculture, forestry, and fisheries; industries;
renewable energy; and construction materials. The participants (businesses, cooperatives, organizations, · S econdly, through favorable investment regulations, tax incentives, and land incentives for the
individuals, etc.) register to participate in mechanisms that need to have specific projects related to circular construction of waste treatment facilities, the state establishes the framework necessary for

economy. The period to pilot and test is 5 years and participants need to report to the Ministry of Planning companies to engage in circular economy activity. This is what motivates companies to develop
and Investment about the risks and results periodically. Companies that have certificate will take advantage long-term, successful plans, take the legal requirements more seriously, and encourage companies
of several policies: to construct a variety of fresh, cutting-edge production models, generating employment, boosting
economic expansion, and attempting to implement a green, low-carbon and circular economy. In
· Technology and technology transfer consulting policy: support the cost of technology consultants; addition, international collaborations to meet global green transition is needed to support Vietnamese
support costs for businesses to rent and purchase digital transformation solutions to implement enterprises.
circular economy projects; exemption from import tax in technology transfer, and priority clearance of
· Thirdly, encourage everyone to get involved in implementing circular economy. This is a protracted and
goods.
challenging process that calls for the cooperation and efforts of the whole community. Thus, to educate
· Green credit and green bond: access, mobilize, and borrow preferential capital and loans without individuals about circular economy, seminars and training sessions must be held to various actors such
government guarantees for green credits; cooperate with functional units that are qualified and as goverment, industry, students, pupils.
allowed to issue green bonds according to the provisions of bond law, etc.
· Finally, Vietnam must create a long-term plan and roadmap for the development of a circular economy.
· Human resource development policy: supports business administration course for participants; support This should base on exchanging experiences, knowledge from other nations as well as scientific. In
vocational training costs and career change costs. addition, business sector needs to communicate their problems to one another, so the authorities to
get response promptly, and some cases regulartory sandbox should applied at local level, for example
· Land policy: participants are allowed to use land for integrated purposes; participants are allowed
at Ho Chi Minh City.
to locally adjust construction planning and land use planning for the land within the boundaries and
planning boundaries of circular economy projects. · Furthermore, Vietnam must create a long-term plan and roadmap for the development of a circular
economy in combination with short-/mid-term response. This should base on exchanging experiences,
knowledge from other nations as well as experts. In addition, business sector needs the authorities
to get response promptly, especially in some cases where regulations are not clear. In this case,
regulartory sandbox should applied at local level. The autonomy, for example at Ho Chi Minh city
according to the Resolution 98, may help in this aspect.
36 37
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38 39
The Philippine Extended Producer Introduction
Responsibility (EPR) Act of 2022: The Philippines is facing a critical challenge in grappling with a daunting environmental crisis. This crisis
is underscored by its struggle with an ever-increasing volume of solid waste, particularly that of plastic waste.
Transforming Plastic Waste Management Recent data from the World Bank (2021) paints a worrying picture: an estimated 2.7 million tons of plastic
waste are generated in the Philippines each year. This statistic alone reflects the significant challenge to both
the environment and the country’s waste management infrastructure.

1) 2)
Louernie de Sales, PhD | Aileen B. Leycano, MSc
Diving deeper into the numbers reveals more distressing realities. The World Wide Fund for Nature
(WWF) Philippines reports that of the consumed plastics, thirty-five percent (35%) escapes into open
The Philippine Extended Producer Responsibility (EPR) Act of 2022: Transforming Plastic Waste Management
Abstract environment, thirty-three percent (33%) end up in sanitary landfills and open dumpsites, while only nine
Environmental Sustainability in Asia: Advancing ASEAN Regional Cooperation on Climate Change
percent (9%) are recycled. The severity of waste management crisis in the Philippines are apparent. These
The Extended Producer Responsibility Act of 2022 (EPRA) was enacted to address the growing plastic numbers are reflected in the country’s significant environmental problems, including pollution of waterways
waste problem in the Philippines and pursue circular economy in the country. The Act aims to reduce plastic and seas that threaten marine environment, disrupt natural habitats and harm wildlife; and landfills reaching
waste by shifting the responsibility for end-of-life management from local governments and consumers maximum capacity from overflow of waste which lead to soil contamination, air pollution from burning trash
to producers. Under the EPR Act, large enterprises, defined as businesses with total assets exceeding and proliferation of disease-carrying pests.
₱100 million (obliged enterprises or OEs), are mandated to develop and implement EPR programs. These
programs must include initiatives for plastic packaging waste collection, sorting, recycling, and treatment. The severity of solid waste management in the Philippines calls for immediate and decisive action. Oft-
OEs are also required to reduce the production and importation of unnecessary plastic packaging, explore mentioned solutions enhancing recycling infrastructure, promoting public education campaigns on waste
alternative packaging materials, and invest in research and development of sustainable packaging reduction and recycling, implementing stricter regulations on plastic production and use, and encouraging
technologies. Additionally, OEs are obligated to pay environmental fees based on the amount of plastic development of alternative, more sustainable materials. The concept of circular economy is also getting
packaging they produce or import. The EPR Act is being implemented by the DENR, in coordination with more traction in the conversation on waste management especially with the newly enacted legislation on the
various stakeholders, including local government units, industry associations, civil society organizations, and Extended Producer Responsibility (EPR). This paper analyzes the policy environment, the new EPR law as well
academic institutions. Despite the EPR Act’s mandate, not even a fraction of obligated large enterprises have as the key challenges in its implementation.
submitted their EPR plans, indicating low compliance and a need for stronger enforcement. Key challenges
in the implementation of the EPR Act include the prevalence of the sachet economy, the inadequacy of waste
Policy Landscape and Institutional Arrangements
management infrastructure, limited access to recycling facilities, logistics constraints, and limited financial
resources. Additionally, demand-side challenges such as consumer behavior relying on sachets, convenience Solid waste management has long been a critical issue in the country, posing significant challenges
culture, economic considerations, and informal waste sector inefficiencies pose further challenges. To for decades. In January 2001, the Philippines enacted Republic Act No. 9003, also known as the Ecological
address these challenges, the following recommendations are proposed: Promote alternative packaging Solid Waste Management (ESWM) Act, as a crucial step improving solid waste management. Considered as
solutions, invest in waste management infrastructure, build more sanitary landfills, materials recovery the main legal framework governing solid waste management in the country, the law aimed to establish
facilities, and recycling plants across the country, particularly in rural areas, provide incentives for companies a comprehensive, integrated and environmentally friendly waste management program, ensuring the
that develop and adopt sustainable packaging solutions, and promote public awareness campaigns to protection of public health and the environment. The ESWM program was also designed to assist local
educate consumers about the importance of waste reduction and recycling. government units (LGUs) in the effective implementation of RA 9003. This includes aiding in the development
of LGUs’ 10-year Solid Waste Management (SWM) Plans, facilitating the closure and rehabilitation of existing
Keywords: Extended Producer Responsibility (EPR), Environmental Protection, Sustainability, Solid Waste
open dumpsites, setting up Materials Recovery Facilities and promoting the adoption of eco-friendly disposal
Management
systems.
In addition to RA 9003, the Philippines also have the following policy instruments issued to improve the
1) University of the Philippines, [email protected]
2) Union of Local Authorities of the Philippines, [email protected] management and operation of solid waste:
40 41
Table 1 Laws and Policies on Solid Waste Management Amending Memorandum Circular 39A,
dated 19 January 1988 by Reconstituting
EMB MC 1988-39A 21 March 1994
Law and Policies Title Date Approved the Presidential Task Force on Waste
Management
Providing penalty for improper disposal of
Presidential Decree No. 825 garbage and other forms of uncleanliness 7 November 1975 Resolution Directing the Department of
and for other purposes Environmental and Natural Resources to
Prepare and Implement the Banning of the
An act providing for an Ecological Solid NSWMC Resolution No.1363,
Use of Unnecessary Single-use Plastics by 12 February 2020
Waste Management Program, creating the series of 2020
National Government Agencies (NGAs), Local
necessary institutional mechanisms and
Republic Act No. 9003 26 January 2001 Government Units (LGUs) Offices and All
incentives, declaring certain acts prohibited
Other Government Controlled Offices
and providing penalties, appropriating funds
therefor, and for other purposes Source: DENR Environmental Management Bureau
Creating a project management office
Administrative Order 1993-90 on solid waste management under the 19 October 1993
In terms of institutional arrangements, RA 9003 also includes the creation of an institutional support
presidential task force on waste management
mechanism essential to the implementation of the law. The National Solid Waste Management Commission
DENR Administrative Orders (DAO)
(NSWMC) serves as the primary government body responsible for formulating policies on solid waste
Guidelines Governing Waste-to-Energy (WtE)
management and monitoring the enforcement of relevant laws and SWM plans at both national and local
DAO 2019-21 Facilities for the Integrated Management of 26 November 2019
Municipal Solid Wastes levels. The NSWMC, under the Office of the President, establishes policies that fulfill the goals and objectives
of RA 9003 and supervises the implementation of SWM plans and initiatives. The Commission is headed
Guidelines on the Categorized Final Disposal
DAO 2006-10 14 September 2006
Facilities (Sanitary Landfills) by the Secretary of the DENR and comprises members from both government sectors and private sectors,
General Guidelines in the Closure and including representatives from non-government organizations, the recycling industry, and the manufacturing
DAO 2006-09 Rehabilitation of Open Dumpsite and 14 September 2006 and packaging sectors. (See Figure 1.)
Controlled Dump Facilities
Implementing Rules and Regulations of LGUs, particularly at the city and municipal levels, are responsible for the on-the-ground implementation
DAO 2001-34 20 December 2001
Republic Act No. 9003
of RA 9003. Their responsibilities include preparing SWM plans, drafting waste reduction policies, managing
Adopting a landfill site identification and waste collection and disposal, maintaining materials recovery facilities (MRFs), and implementing revenue-
DAO 1998-50 screening criteria for municipal solid waste 29 June 1998
disposal facilities generating measures to support local solid waste management initiatives and projects. RA 9003 emphasized
that LGUs are the ones primarily responsible for enforcing and implementing the law in their jurisdiction.
Technical Guidelines for Municipal Solid
DAO 1998-49 29 June 1998
Waste Disposal
DENR Memorandum Circulars (DMC)
Adoption of the National Plan of Action for

DMC 2021-10 the Prevention, Reduction, and Management 5 August 2021
of Marine Litter (NPOA-ML)
EMB Memorandum Circular
Adopting the National Solid Waste

Management Commission (NSWMC)
Resolution No. 669 Series of 2016 “Guidelines
EMB MC 2019-007 16 September 2019
Governing the Establishment and Operation
of Waste-to-Energy Technologies for
Municipal Solid Waste”
42 43
Figure 1 Composition of the National Solid Waste Management Council (as amended by RA 11898) Figure 2 Projected Waste Generation from 2008 to 2020 (metric tons per year)
Project waste generation from 2008 to 2020 Philippines Metro Manila
18,000,000
16,000,000 14,661,414
Metric tons of annually generated MSW

13,481,326 16,628,026
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000 4,441,634
3,595,593
4,000,000
2,990,814
2,000,000
-
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: RA 11898 also known as the Extended Producer Responsibility Act of 2022
Source: DENR Environmental Management Bureau data
These policies, as well as other SWM-related legal and institutional framework enacted at both
national and local levels have endeavored to improve the management and operation of solid waste in the
The data paints a stark picture of the worsening waste situation in the Philippines. In 2023, the
Philippines. However, for over twenty years, despite the implementation of RA 9003 and these policies in
Commission on Audit (COA)’s Performance Audit Report of the country’s Solid Waste Management Program
place, the Philippines has seen a continuous increase in solid waste production. As shown in Figure 2, from
attributed the worsening situation to “The frail enforcement and compliance with the law due to political,
generating 9.07 million metric tons in the year 2000, the country’s waste generated escalated to 16.63 metric
financial, and technical limitations of the LGUs and implementing agencies. Many LGUs have yet to comply
tons by 2020. Additionally, it highlights Metro Manila’s contribution to the country’s solid waste generation,
with establishing local SWM Boards, submission of SWM Plans and establishment of MRFs.” The Commission
which was 22.2% in 2010, increased to 24.5% in 2014, and 26.7% in 2020.
also warned that unless the causes of improper waste management are addressed, furthering the extent of
waste generation’s effect will result in the projected annual waste generation of 19,764,384.95 metric tons in
2030 to 24,499,946.53 metric tons in 2045.
44 45
1. Insufficient separation and recycling activities at the source, particularly at the household level,
Challenges Faced by Philippine Local Government Units in Solid pose a significant hurdle. While recovery efforts focus primarily on high-value plastics, these
Waste Management, Particularly Plastic Waste initiatives are predominantly informal, led by waste pickers collecting recyclables from house to
house. Consequently, a substantial volume of high-value recyclables is directed to disposal sites or

1. Limited financial resources. LGUs often lack the necessary budget to implement comprehensive inadvertently released into the environment.
waste management programs, including infrastructure development, collection services, and
2. Despite the presence of a considerable volume of high-value recyclable plastics, limited recycling
recycling facilities. Based on the Local Development Investment Plan of Local Government Units for
facilities, mainly concentrated in central regions, hinder effective recycling. This, combined with a low
2023, 76 provinces and 1,277 municipalities have identified a total of 3,793 projects related to solid
recovery rate, prompts some significant recyclers and aggregators to resort to importing plastics for
waste management amounting to a total of PhP 1,242,119,842,407.
processing.
2. Lack of technical expertise. Many LGUs lack the specialized knowledge and skills required to manage 3. A notable challenge also lies in the abundant volume of low-value plastics and non-recyclables, such
waste effectively, particularly complex waste streams like plastic packaging. In a 2023 Commission as flexible films, sachets, and composites. The collection of these materials demands significant time
on Audit (2023) Report on the “Progress in the Achievement of the Goals of the Ecological Solid and effort, only to be sold to junkyards at minimal prices per kilo. Additionally, recycling sachets
Waste Management Act Needs Stronger Support and the Cohesive Efforts and Strategies of All necessitates new processing equipment, and the current scenarios result in these sachets either
Stakeholders,” it observed that there is inconsistent implementation of waster segregation and ending up in disposal sites or being released into the environment.
waste collection among local government units nationwide. Furthermore, COA cites that there
is also a lack of recording mechanisms in MRFs and that Environmental Monitoring Officers are Consequently, this increasingly alarming waste issue and numerous concerns have become a significant
overwhelmed, “affecting the reliability of data and delivery of services to LGUs” (COA, 2023) concern among various stakeholders. Legislators, non-government organizations, and other concerned
sectors, have been increasingly vocal about the extent of the problem of waste generation and the urgent
3. Informal waste sector. A large informal waste sector operates in many areas, making it difficult to need for effective solutions and action plans. These calls for action reflects the recognition that this
enforce waste management regulations and ensure proper waste segregation and recycling. environmental challenge needs to be urgently addressed and for all parties to explore new and innovative
strategies for better waste management in the light of changing circumstances and ever-increasing waste
4. Public Awareness is Not Translated to Action. several studies While in the Philippines have shown volumes.
high to moderate public awareness regarding solid waste management, a concerning disconnect
exists between this awareness and actual action. Research by Molina and Catan (2021) in
Zamboanga City revealed that students possess sufficient knowledge about solid waste concepts, he New Extended Producer Responsibility Law in the
T
its impacts, regulations, and individual responsibilities. Similarly, studies by De Jesus et al. (2022)
Philippines
in Palayan City, Lalamonan and Comighud (2020), and Gantang (2022) all reported significant
awareness among respondents. However, despite this knowledge, concrete actions to translate In response to this growing crisis of combating the escalating plastic waste problem and the challenges
awareness into responsible behavior remain insufficient. This highlights a critical gap in the current faced in implementing RA 9003, the Philippine government enacted the Extended Producer Responsibility
approach to solid waste management. Act of 2022 (EPRA). This landmark legislation represents a fundamental shift in the approach to waste
management, and aims to reduce plastic waste by shifting the responsibility for end-of-life product
management from local governments and consumers to the producers themselves.
The circumstances were further exacerbated by the Covid-19 pandemic, which led to a surge in
The EPRA is designed to tackle the plastic pollution problem through efficient and effective recovery
hazardous and infectious waste production. In 2020, the WWF-Philippines initiated a comprehensive study
and management of plastic packaging waste. It mandates the creation of a National Extended Producer
aimed at gaining insights into plastic material flows, the existing legal framework, and the current state of
Responsibility Framework, covering all product wastes. This includes setting up comprehensive waste
the solid waste management system. The study identified areas for improvement in the implementation of
management infrastructure, such as facilities for recycling, composting, thermal treatment, and other waste
RA 9003, the Ecological Solid Waste Management Act of 2000, highlighting several challenges:
diversion methods that target waste products.
46 47
Under the EPR policy, producers are held accountable for the end-of-life management of their products, The study by Domingo and Manejar (2021), provides a detailed analysis of the waste composition in
encompassing the collection, sorting, recycling, and recovery of used or post-consumer products. The the Philippines, indicating a substantial 61.85% of the country’s waste consists of compostable materials,
EPRA of 2022 embodies the “polluter pays” principle, thereby shifting the financial and operational burden including biodegradables and organics. This is followed by recyclables at 14.76%, residuals at 13.35%, with
of managing plastic wastes from the taxpayers to the obligated enterprises. The law requires that large the remaining portion being special residuals and hazardous waste. In this breakdown, kitchen waste forms
enterprises, defined as those with over PhP 100 million in total assets, initiate or integrate recovery a large part of the organic segment, with glass bottles prominent in recyclables, while plastics and plastic
programs for plastic packaging within six months of the law’s effectivity. These enterprises must aim to sando bags make up a considerable part of the residuals. Special residuals include items like diapers, and
recover or offset a percentage of their plastic packaging footprints, ranging from twenty percent (20%) to hazardous waste encompasses things like paint or solvents containers.
eighty percent (80%) between 2023 and 2028, and potentially beyond. The said recovery efforts can include
redemption or buy-back schemes, recycling, cleaning up waste in coastal areas, public roads, and other sites, A striking aspect of this waste profile is the dominance of plastic bags, which underscores the widespread
and establishing large-scale recycling, composting, and thermal treatment facilities. Partnerships with LGUs, use of sachet-based products in the Philippines. The prevalence of sachet economy is reflected here, where
communities and informal waste sector are also encouraged. The National Ecology Center under the NSWMC goods are sold in small, affordable packets that contribute significantly to plastic waste.
is tasked with the registration as well as the monitoring and evaluating compliance of the obliged enterprises
(OE) and the producer responsibility organizations (PRO) with this EPR programs. Furthermore, the research emphasized the data by Roberts-Davis and Guerrero (2018) regarding the role
of branded waste. The findings showed that 3,286 metric tons of waste from the WABA communities were
In the past, manufacturers solely bore responsibility for the effects stemming from the actual production attributed to wastes coming from big international brands. Figure 3 identifies the brands with the highest
of their goods. Now with the implementation of the EPR Act, product manufacturers are now obligated to average share of waste generation in local communities in the country as Nestle (12%), Unilever (9%), Procter
assume accountability for the complete life cycle of their products, encompassing manufacturing, usage, and and Gamble (7%), Universal Robina (5%), and Rebisco Republic Biscuit (4%), with other brands contributing
end-of-life stages. 14%.
The legislation extends its scope to include brand owners engaged in the sale or distribution of any
commodity associated with a specific brand or identity, whether the product is directly produced by them or Figure 3 Big Brands with the Highest Average Share of Waste Generation in Local Communities
sourced from another manufacturer or supplier. Additionally, brand owners bear responsibility for products
manufactured by toll manufacturers acting on behalf of the brand owner.

Rebisco Republic
PT Mayora/Torabika Biscuit Corp
Mandatory participation in EPR is stipulated for large enterprises, defined as businesses with total assets 5% 4%
Universal Robina
exceeding ₱100 million (obliged enterprises or OEs). Meanwhile, Micro, Small, and Medium Enterprises 5% Plastic labo
(MSMEs) are not compelled to participate, although strong encouragement is provided for their voluntary Icecandy 27%
involvement in EPR initiatives. Furthermore, large enterprises, specifically those with assets exceeding PhP 6%
1 billion, are mandated to recover a defined portion of their waste under EPRA. Failure to comply results in Procter & Gamble
significant fines imposed by the government. 7%
At this point, it is significant to note that the Global Alliance for Incinerator Alternatives (GAIA) and Unilever
9% Other brands
MEF, introduced WABA (Waste and Brand Audit), an enhanced version of WACS (Waste Assessment and 14%
Brand Audit) that the government conducts. This methodology uniquely leveraged the compilation of data
Sando bag Nestle
from plastic manufacturers, specifically identifying the “most problematic residual waste” within a given
11% 12%
community. The primary objective was to shift the responsibility for waste generation from consumers to
manufacturers and large corporations (Domingo and Manejar, 2021).
Source: Roberts-Davis & Guerrero (2018) as cited in Domingo & Manejar (2021)
48 49
The implication of these findings is informative for the government and the big brands operating in Table 2 EPR Plastic Neutrality Targets
the Philippines. There is a clear indication that these companies contribute to the country’s waste problem,
Period Ending Compliance Target
particularly in the context of non-biodegradable materials like plastic sachets and packaging. In light of the
new EPR legislation, these companies must quickly adopt more sustainable practices. The EPR law mandates 31 December 2023 Twenty percent (20%)
that these large producers or big brands take responsibility for the entire life cycle of their products, 31 December 2024 Forty percent (40%)
including post-consumer waste. The use of environmentally friendly packaging, increase recycling efforts
31 December 2025 Fifty percent (50%)
and more proactive measures in waste management are crucial efforts that these big brands should develop
31 December 2026 Sixty percent (60%)
and undertake to align with the new regulatory environment. These large producers should implement
31 December 2027 Seventy percent (70%)
these measures not just to comply with the law but also to demonstrate their commitment to environmental
stewardship and sustainable business practices. 31 December 2028,

Eighty percent (80%)
and every year thereafter
Source: EMB Data
Key Provisions of the EPR Act

Additionally, companies are compelled to furnish annual compliance reports, subject to audit and
The EPR Act mandates producers of plastic packaging to:
verification by an independent third-party auditor. These reports should encompass the organization’s
plastic packaging footprint, the volume of plastic recovered, recovery rates, and adherence to EPR program
1. Develop and implement EPR programs. These programs must include initiatives for plastic packaging
standards, as defined by the Department of Environment and Natural Resources.
waste collection, sorting, recycling, and treatment.
2. Reduce the production and importation of unnecessary plastic packaging. This includes exploring
alternative packaging materials and promoting the use of reusable packaging options.
Implementation Strategies
3. I nvest in research and development of sustainable packaging technologies. This encourages
innovation towards more environmentally friendly packaging solutions. The EPR Act is being implemented by the DENR, in coordination with various stakeholders, including:
4. Provide financial support for waste management infrastructure. This includes funding for waste
collection systems, recycling facilities, and other necessary infrastructure. 1. Local government units. Responsible for implementing EPR programs within their jurisdiction.
5. Pay environmental fees based on the amount of plastic packaging they produce or import. These fees 2. Industry associations. Representing producers and facilitating their compliance with the EPR Act.
will be used to finance waste management programs and incentivize producers to reduce their plastic 3. Civil society organizations. Advocating for environmental protection and promoting public awareness
footprint. of the EPR Act.
4. Academic institutions. Conducting research and providing technical expertise on waste management
With the passage of the EPR (having lapsed into law on 13 July 2022) and the subsequent issuance and recycling technologies.
of the implementing rules and regulations on 24 January 2023, companies are mandated to institute or
gradually introduce EPR initiatives for their plastic packaging within six months of the law’s enactment.
These initiatives must be registered with the National Solid Waste Management Commission. Furthermore, Status of the EPR Implementation in the Philippines
companies are obligated to assess their annual plastic packaging impact and achieve specified diversion
targets. By the conclusion of 2023, companies must demonstrate the recovery and diversion of 20 percent of The Department of Environment and Natural Resources is the main government ministry responsible
their 2022 plastic packaging footprint, increasing to 40 percent by 2024, with a subsequent annual increase for the EPR implementation. As of this writing, DENR have established the EPR Program Management Office.
of 10 percent, ultimately reaching 80 percent by 2028 and beyond. Table 2 below shows the minimum targets The office is tasked with overseeing the day-to-day implementation of the EPRA to ensure that the required
for recovery of plastic product footprint during the immediately preceding year. deliverables are provided accurately and in a timely manner. The department’s dedication to the new
legislation is evident in the specific functions assigned to its officials, as outlined in the table below.
50 51
Table 3 Functional Assignments of DENR Officials for the EPR Implementation Figure 4 EPR PMO Organizational Structure
Assigned Undersecretary Focus of Assignment

Secretary
Undersecretary for Field Operations – Luzon, Policy coordination, registration of EPR
Program advisory
Visayas and Environment programs (including amendments) committee
USEC for Field
Undersecretary for Policy, Planning and Operations Luzon Vlsayas
Policy, systems, and procedures formulation and Environment Strategic communication
International Affairs specialist
EMB-Director
Undersecretary for Finance, Information
Compliance monitoring and audit
Systems and Climate Change
Supervising Undersecretary for Strategic Partnerships and strategic collaboration National Ecology Program
Center(NEC) management Office
Communications and Initiatives Service building, communications
EPR Consultants
Registration of EPR programs (including Review Division

Undersecretary for Field Operations – Mindanao
amendments) Staff
Compliance and
Undersecretary for Integrated Environmental Data management, innovations, and technology Monitoring Division
Regional Ecology
Science development Center(REC)
Undersecretary for Special Concerns and Admin Technical

Management of confidential information
Legislative Affairs
Undersecretary for Organizational Organizational transformation and capacity Source: EMB Data
Transformation and Human Resources development
Incentives and cost recovery, including rewards

Undersecretary for Legal and Administration
and recognitions mechanism Despite the EPR Act’s mandate, not even a fraction of obligated large enterprises have submitted their
Source: EMB Data EPR plans, indicating low compliance and a need for stronger enforcement. Albay (2023) reports that as of
mid-October 2023, only 745 out of around 4,000 Trade Department-registered large enterprises (18.6%)
have submitted their EPR schemes with the DENR. At a media briefing, DENR undersecretary Jonas Leones
Furthermore, the EPR PMO comprises three primary program committees: the EPR Review Committee,
confirmed that the tally of compliant industries has fallen short of the agency’s initial goal to have 1,000 EPR-
the EPR monitoring Committee, and the Compliance Audit Committee. The following organizational structure
compliant registered enterprises this year.
reflects these committees.
In terms of the target of recovery and diversion of 20 percent of their 2022 plastic packaging footprint,
data have yet to be seen as recovery targets are effectively up to 31 December 2023.
Needless to say, the output of less than 20% submission of EPR plans reflects poorly on the current
status of the EPR implementation in the Philippines.
Challenges in the Implementation of the EPR Law
Supply-side challenges
Aside from the low turnout of compliance from OEs, the implementation of the EPR Act has been
challenging on the supply side.
52 53
Sachet Economy realize a green economy, acknowledging the gradual nature of such a transformative process.
For one, the prevalence of the “sachet economy,” where single-use sachets are relied upon for daily
necessities, presents a significant obstacle to plastic reduction. These insights were shared by Johannes Paul, According to the National Solid Waste Management Commission’s 2021 data, a mere 245 operational
an environmental engineer and the project leader for the German Agency for International Cooperation GIZ sanitary landfills exist in the Philippines, processing a limited 15 tons of garbage per day, serving only 478
(Deutsche Gesellschaft für Internationale Zusammenarbeit) in the Philippines, underscoring the complexities out of 1,634 municipalities. Notably, a 2023 government audit underscores challenges in waste segregation
associated with waste management in the local context. and diversion, contributing to the significant presence of mixed wastes in landfills. This deficiency results in
approximately 0.75 million metric tons of mismanaged plastic entering the ocean annually, positioning the
Per findings presented in a 2022 report by the Pew Charitable Trusts, the prevalence of sachet Philippines as the third-largest global plastic polluter, following China and Indonesia.
consumption, referring to palm-sized multi-layered plastic pouches utilized for packaging daily essentials like
shampoos and food seasoning, is notably more pronounced in low-income countries such as the Philippines, In Cebu City, a substantial daily volume of mixed solid waste, ranging from 500 to 700 tons, directly
with a consumption rate at least four times greater than that observed in high-income economies. heads to landfills due to a scarcity of functional materials recovery facilities (MRFs). Victoria Abrera, the
Within the Philippine context, nearly 20 million families, encompassing approximately 18 percent of the regional director of DENR-EMB Region 7, acknowledges the novelty of the EPR Act, highlighting the ongoing
national population, reside below the poverty line, necessitating their reliance on small-quantity purchases learning process regarding its implementation. Local government units in Cebu Island rely heavily on private
of essential commodities as a means of meeting basic needs. This observed trend underscores the waste management entities, such as Prime Integrated Waste Solutions Inc, which processes 1,000 tonnes of
socioeconomic dynamics influencing consumer behavior and the consequential environmental implications Cebu City’s solid waste daily.
associated with sachet usage in developing nations.
Limited Access to Recycling Facilities

Data from waste analyses also indicates a substantial challenge in the recovery of sachets. A study Unequal Distribution. Recycling facilities are concentrated in urban areas, leaving rural communities with
focused on Iloilo City in Panay Island, estimated to generate approximately 23,200 tons of plastic waste limited options for responsible waste disposal. It is estimated that waste collection coverage in the LGUs may
annually, revealed that merely 7 percent of the city’s retrieved plastic waste originated from personal care vary from 30% to more than 99%. Urban centers register higher coverages and frequencies compared to
products. Conducted by the Iloilo City Environment and Natural Resources Office (CENRO) in collaboration rural areas (Environmental Management Bureau, 2017)
with a local university, the research documented plastic waste from 483 enterprises and producers recovered
from the city’s principal creeks—Dungon and Calajunan Creeks. Approximately 16 percent of the nearly 290 Infrastructure Deficiencies. Many existing facilities cannot handle the volume of waste generated,
kilograms of waste collected over a week comprised discarded recyclables, with 81 percent representing leading to inefficient recycling processes and waste leakage. The COA has identified significant challenges
plastic packaging, prominently featuring products from notable brands like Coca-Cola, Jollibee, and Nissin, contributing to the current situation, including the inconsistent implementation of waste segregation and
recognized for its cup noodles. diversion practices, resulting in the substantial presence of mixed wastes in landfills. This situation has, in
turn, diminished the diversion capacity of MRFs, leading to an overflow of waste in landfills, thereby reducing
Engr Neil Ravena, the head of CENRO in Iloilo City, underscored that the actual figures for sachet waste their serviceable lifespans. Furthermore, the inadequacy of waste facilities and landfills to cater to LGUs
might be higher, citing the thin nature of sachets that may elude waste interceptors or sink, evading capture and barangays nationwide compounds the issue. As of the calendar year 2021, the country possesses a
during the study. Consequently, these sachets contribute to the obstruction and environmental degradation total of 11,637 MRFs, serving only 39.05 percent (16,418 out of 42,046) of barangays, and 245 operational
of the creeks. Sanitary Landfills (SLFs), servicing only 29.25 percent (478 out of 1,634) of LGUs. Due to limitations in disposal
facilities, certain LGUs find it challenging to circumvent the operation of illegal dumpsites. Additionally, a
Inadequate Waste Management System noteworthy challenge is the non-establishment of the Solid Waste Management Fund, a specialized account
The inadequacy of waste management infrastructure and a robust recycling ecosystem, supported by in the National Treasury intended to finance approved solid waste management plans of LGUs.
effective logistics, exacerbates the challenge of waste disposal. The country’s archipelagic nature, coupled
Crispian Lao, the head of the Philippine Alliance for Recycling and Materials Sustainability (PARMS) (n.d.),
with the fact that half of the population resides in shoreline municipalities distant from major economies
highlighted a concerning statistic that 70% of the Filipino population lacks access to disposal facilities and
and sanitary services, while the other half resides in cities, intensifies the complexities. Although cities
sanitary landfills, resulting in the leakage of waste into the oceans. The inadequate compliance of cities in
offer easier access to recyclers, the overwhelming volume of waste strains the existing waste management
establishing sanitary landfills has been attributed to the substantial costs associated with closing dumpsites.
system. Environmental engineer Johannes Paul emphasizes the necessity of harmonizing diverse factors to
54 55
However, Lao argued that the stringent regulations for landfill construction also contribute to this issue. Convenience Culture. Consumers often opt for single-use plastics for convenience, especially in urban
These regulations, which include the necessity for landfills to be situated on clay and at a safe distance from areas with fast-paced lifestyles. This is further fueled by the lack of readily available reusable alternatives.
earthquake faults, pose challenges given the limited availability of clay in the country and its location on Crispian Lao (PARMS, n.d.), also pointed out that the marine pollution crisis is often attributed to the use of
several tectonic plates. plastic packaging by food and consumer goods companies. However, he underscored that no other material
is as convenient and effective in ensuring the safe transportation of food. This perspective adds complexity
Czarina Constantino, leading the World Wide Fund for Nature’s (WWF) global campaign in the Philippines
to the ongoing discourse surrounding plastic packaging and emphasizes the need for comprehensive
to halt the influx of plastics into nature by 2030, concurred that the scarcity of waste disposal facilities stands
solutions that balance environmental concerns with practical necessities.
as a primary factor contributing to plastic pollution in the country. This predicament is exacerbated by the
limited resources of municipal governments, impeding their ability to address the critical issue of waste Economic Considerations. The cost of some reusable alternatives may be perceived as high compared
management effectively. to disposable options, discouraging consumers from switching. Furthermore, low-income households may
prioritize affordability over sustainability when making purchasing decisions.
High Cost of Solid Waste Management. Based on a 2003 study conducted by the Asian Development
Bank, the comprehensive expense associated with solid waste management in Metro Manila, covering
In terms of these behavioral factors, it is important to point out that ingrained habits and social norms
activities from collection to ultimate disposal, amounted to approximately 3.5 billion PhP or 1,700 PhP per
around consumption and waste disposal may be difficult to change, requiring sustained awareness campaigns
ton of waste in the year 2001. Note that this data was more than 20 years ago, and inflation and other
and behavior change interventions. Lack of personal motivation and environmental consciousness may also
factors would increase costs by this time. With the imperative need for enhanced final disposal methods
hinder individuals’ willingness to adopt sustainable practices.
such as sanitary landfills and a reduction in waste through intermediate treatment, the anticipated trajectory
indicates a further escalation in the costs of solid waste management, imposing a substantial burden on
Informal Waste Sector
local budgets. Furthermore, consumers often find recycling inconvenient or costly due to limited collection
Inefficient Practices. Informal waste collectors often lack proper training and resources, leading to
services and the lack of incentives for participation.
unsanitary practices like open burning and improper sorting, further harming the environment.
Aside from limited compliance, the sachet economy, and inadequate waste management infrastructure,
the EPR implementation is also thwarted by: Lack of Regulations. The informal sector largely operates outside of formal regulations, making it difficult
to monitor and enforce environmental standards.

Logistics constraints. The archipelagic nature of the country creates logistical challenges for collecting
and transporting waste, particularly from remote areas. Limited Recognition. Informal waste collectors play a crucial role in waste collection, yet they often lack
recognition and support from the government and formal waste management systems.
Limited financial resources. Implementing the EPR Act requires significant financial resources, which may
not be readily available to all obligated enterprises.
Recommendations
Demand-side challenges
Based on the challenges identified in the analysis, the following recommendations are proposed for the
Consumer Behavior
successful implementation of the EPR Act in the Philippines:
Relying on Sachets. The sachet economy presents a multifaceted challenge, impacting solid waste
management issues on both the supply and demand fronts. While sachets are prevalent in numerous Addressing Supply-Side Challenges
developing countries, their consumption in the Philippines is particularly significant. A recent study Promote alternative packaging solutions. Encourage producers to explore reusable, refillable, and
conducted by the environmental group, GAIA revealed a staggering consumption rate of 163 million sachets compostable packaging options to reduce reliance on single-use plastics. Provide incentives for companies
daily in the country. This equates to nearly 60 billion sachets annually, a quantity substantial enough to that develop and adopt sustainable packaging solutions.
blanket 130,000 soccer fields. Even if the EPR shifts the burden to producers, the heavy reliance of Filipino
consumers on sachets continues to pose a challenge to waste management.
56 57
Invest in waste management infrastructure. Build more sanitary landfills, materials recovery facilities, Fostering collaboration. Establish formal partnerships between LGUs and OEs, allowing for collaboration
and recycling plants across the country, particularly in rural areas. Improve waste collection systems and in the development and implementation of EPR programs. This could involve joint planning, resource
transportation logistics to ensure efficient waste management. sharing, and coordinated waste management activities.
Strengthen capacity building. Provide training and technical assistance to producers, LGUs, and informal Utilizing LGU expertise and infrastructure. Encourage OEs to utilize the services of LGUs as service
waste collectors on best practices for waste management and recycling. This could include training on EPR contractors for specific aspects of their EPR programs. This could include waste collection, sorting,
program development, efficient sorting and collection techniques, and safe handling of hazardous materials. transportation, and recycling or composting operations. LGUs with existing facilities and resources for waste
management can provide valuable expertise and infrastructure to OEs, thereby enhancing the efficiency and
Support MSMEs. Develop special programs and incentives to encourage MSMEs to participate in EPR effectiveness of EPR programs.
initiatives, such as technical assistance, access to funding, and collaborative partnerships.
Capacity building. Provide training and technical assistance to LGUs to enhance their capacity for
Address the sachet economy. Implement strategies to reduce the dependence on sachets, such as implementing EPR programs effectively. This could include training in waste management best practices,
promoting bulk buying options, encouraging the use of reusable containers, and exploring alternative data collection and analysis, and program monitoring and evaluation.
packaging materials for single-use products.
Financial support. Allocate funding to LGUs to support their participation in EPR initiatives. This
Addressing Demand-Side Challenges could involve grants, subsidies, or performance-based incentives to encourage LGUs to invest in waste
management infrastructure, hire additional personnel, and implement innovative programs.

Promote public awareness. Increase public awareness about the EPR Act and its benefits for the
environment and health. Encourage consumers to adopt responsible waste disposal practices, including
Data sharing and collaboration. Establish a platform for data sharing and collaboration between LGUs
proper segregation and recycling.
and OEs. This would allow for the exchange of information on waste generation, collection, and processing,
enabling better planning and resource allocation.

Improve access to recycling facilities. Make it easier for people to recycle by expanding recycling
infrastructure and collection services, particularly in rural areas. Implement convenient and accessible drop-
Promoting transparency and accountability. Implement mechanisms for transparency and accountability
off points for recyclables.
in the EPR program implementation. This could involve regular reporting on program progress, performance
data sharing, and public participation in decision-making processes.

Reduce the cost of recycling. Provide incentives for consumers to participate in recycling programs, such
as subsidies, rewards programs, or deposit-refund schemes.

By empowering LGUs as partners in the EPR process, the Philippines can leverage existing local expertise
and infrastructure, facilitate efficient waste management, and ensure that EPR programs are tailored to the
Formalize the informal waste sector. Integrate informal waste collectors into the formal waste
specific needs and challenges of each region. This collaborative approach will be instrumental in achieving
management system by providing them with training, resources, and fair compensation.
the ambitious goals of the EPR Act and significantly reducing plastic pollution in the Philippines.
Address the convenience culture. Promote reusable alternatives and encourage consumers to break
away from the “convenience culture” that contributes to plastic waste. This could involve campaigns that
Additionally, the following considerations should be addressed to ensure the successful partnership
highlight the environmental and health impacts of single-use plastics and promote the benefits of reusable
between LGUs and OEs:
alternatives.
Clear roles and responsibilities: Define clear roles and responsibilities for both LGUs and OEs within
Empowering LGUs as Partners in EPR Implementation the EPR framework. This will prevent duplication of efforts and ensure accountability for program
To further enhance the effectiveness of the EPR Act and facilitate its successful implementation, it is implementation.
crucial to empower LGUs as key partners of OEs. This can be achieved through the following strategies:
Solid waste management is one of the primary responsibilities of LGUs, specifically cities, and
municipalities. Furthermore, under Republic Act 9003, sanitary landfill sites shall be developed and operated
58 59
as a final disposal site for solid and, eventually, residual wastes of a municipality or city or a cluster of sustainable packaging materials to further reduce reliance on plastics and pave the way for a more
municipalities and/or cities. However, the broad concept of solid waste management can be unbundled in circular economy. Fostering collaboration between the public and private sectors is also crucial for
terms of collection, transport, treatment, and disposal/recovery. While individual cities and municipalities can driving innovation in sustainable practices. By facilitating partnerships and knowledge sharing,
manage solid waste management, provinces can be generally considered better operators of landfills than collective expertise can be leveraged to accelerate the development and adoption of alternative eco-
individual cities and municipalities due to several reasons: materials.
· Promote environmental education. Integrate environmental education into school curricula to raise
· E conomies of scale: Provinces are responsible for managing waste generated by multiple cities awareness about pressing environmental issues and empower students with knowledge and skills to
and municipalities within their jurisdiction. This means that they can achieve economies of scale by become stewards of the environment and cultivate responsible behavior among future generations.
operating larger landfills that are capable of handling higher volumes of waste. This can result in lower · Empower communities. Encourage community-based initiatives by supporting and incentivizing
operating costs and more efficient waste management. community-based initiatives focused on waste-reduction, reuse and recycling to cultivate a culture
· Technical expertise: Managing landfills requires technical expertise in areas such as engineering, of environmental stewardship and collective responsibility. Providing resources and guidance to
geology, and environmental science. Provinces may have greater access to these technical resources communities with such initiatives can help amplify impact and encourage broader participation.
than individual cities and municipalities, which can enhance their capacity to manage landfills · Leverage technology. Utilize digital platforms, the internet of things, and mobile applications to
effectively. facilitate and streamline waste collection processes, optimize recycling efforts, and facilitate seamless
communication among stakeholders. Through the strategic deployment of technology, advancements

· Better regulation and oversight: Provinces are responsible for regulating and overseeing the operation
in sustainability and environmental conservation can be driven while fostering a more connected and
of landfills within their jurisdiction. This can help ensure that landfills operate in compliance with
informed community.
environmental regulations and best practices. By having a centralized authority for regulation and
oversight, provinces can promote consistent and high-quality waste management across their
jurisdiction.
Conclusion: A Collaborative Path to a Plastic-Free Future
· Improved coordination: Provinces can facilitate better coordination among cities and municipalities
in waste management efforts. This can include developing provincial waste management plans, The successful implementation of the EPR Act in the Philippines presents both a formidable challenge
coordinating waste collection and transport, and providing technical assistance and capacity building and a significant opportunity for positive change. By strategically addressing the complexities of supply-
to individual LGUs. side and demand-side challenges, strengthening enforcement and governance, and fostering collaboration
between LGUs and OEs, the Philippines can pave the way towards a more sustainable future, reducing plastic
Performance-based contracts. Develop performance-based contracts between LGUs and OEs, ensuring pollution and advancing its environmental goals.
that OEs are held accountable for achieving specific targets and delivering agreed-upon services.
To ensure the effectiveness of the EPRA, robust enforcement mechanisms and governance structures
Fair pricing and compensation. Establish fair pricing and compensation mechanisms for the services must be put in place. Strengthening regulatory frameworks and fostering transparency will be essential in
provided by LGUs to OEs. This will encourage LGUs to participate in the program and ensure the holding both producers and consumers accountable for their roles in the plastic lifecycle.
sustainability of the partnership.

Collaboration between LGUs and OEs is essential for driving impact and change on the ground. By
Monitoring and evaluation. Regularly monitor and evaluate the performance of the partnership between fostering partnerships and aligning efforts, stakeholders can leverage their unique strengths and resources
LGUs and OEs. This will allow for the identification of areas for improvement and ensure that the program to maximize the impact of EPR initiatives across the country.
adapts to changing circumstances.

Transitioning towards a circular economy requires a holistic and multi-pronged approach that not only
In addition to these strategies mentioned, below are several recommendations to further enhance prioritizes technological innovation and infrastructure development but also cultural and behavioral shifts.
sustainable waste management practices: Educating and engaging the public on the importance of responsible consumption and waste management
practices will be fundamental in driving this transition.

· Invest in research and development. Support research on innovative recycling technologies and
60 61
Empowering local communities and businesses to actively participate in waste management efforts
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Website | www.kei.re.kr

2024 - ESA - Green Transition in Southeast Asia

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ENVIRONMENTAL

Making Sustainable Circular Economy Landscape in The Philippine Extended

Ⅰ. Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

Ⅱ. Circular Economy Landscape in Vietnam

through international cooperation.

1 Imperatives of ASEAN Sustainable Finance

Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

1) Economic Research Institute for ASEAN and East Asia, [email protected]

Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

and/or trying to transition.

emission reduction potential of the projects and programs.

Source: Anbumozhi, 2021

assets and activities.

Source: ASEAN, 2021

Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

promoting initiatives to reduce carbon emissions.

4 ASEAN Taxonomy Design and Essential

sustainable finance space.

Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

2. Implement necessary measures to protect ecosystems and biodiversity.

(a) Terrestrial and marine biodiversity conservation;

Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

into consideration parallel activities elsewhere, including the EU.

B. Remedial measures to transition

Assessments (EIA) prior to project commencement.

Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

Yes, using Foundation

Technical Screening Criteria Up to three thresholds Single threshold

Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

marine resources and (5) Pollution prevention and control.

alternatives are not yet available.

make sound sustainable financing decisions.

Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

wider stakeholder groups;

Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

· Participate in, and encourage, multilateral discussions on:

· F or multilateral development finance institutions: Provide regulators engaged in developing

circular economy objectives and

https://www.eria.org/uploads/media/discussion-papers/Unlocking-the-Potentials-of-Private-Financing- IEA (2022), World Energy Investment, https://www.iea.org/reports/world-energy-investment-2020

Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

ATF Study Group (2022), Asia Transition Finance Guidelines, https://www.aggpm2022.org/downloads/ATF_

utilities”, Journal of Sustainable Finance & Investment, https://doi.org/10.1080/20430795.2019.156944.

Nguyen Minh Tu1) | Truong Thi Ai Nhi1) | Nguyen Hong Quan1)

Figure 1 Vietnam’s GDP Growth Rate between 1985-2022

12.00 Vietnam GDP growth(annual %)

1 Status of Economic Development and

2.79 2.87 2.56

Circular Economy Landscape in Vietnam

Source: Global Carbon Budget, 2023

Circular Economy Landscape in Vietnam

greenhouse gas (GHG) inventory.

Circular Economy Landscape in Vietnam

The law offers definition, principles of CE in waste

enterprises with sustainable business for the period 2022-2025”).

economy in agriculture until 2030

Circular Economy Landscape in Vietnam

Rural Development) in the field of Circular Economy.

Circular Economy Landscape in Vietnam

Ⅰ. Making Sustainable Finance Taxonomy Work for Green Transition in ASEAN

Ⅱ. Circular Economy Landscape in Vietnam

1 Imperatives of ASEAN Sustainable Finance

4 ASEAN Taxonomy Design and Essential

· Participate in, and encourage, multilateral discussions on:

· F or multilateral development finance institutions: Provide regulators engaged in developing

ATF Study Group (2022), Asia Transition Finance Guidelines, https://www.aggpm2022.org/downloads/ATF_

1 Status of Economic Development and

Envir onmental Management Bureau. (2018). 3. Solid Wastes. https://emb.gov.ph/wp-content/