Embracing circular economy in Vietnam and beyond: Lessons learned from innovators
In response to accelerating climate change, the circular economy has spurred businesses to solve environmental challenges—where waste is eliminated, resources are recycled, and nature is regenerated. Here are some pioneering solutions using circular business models in Vietnam and the region, pushing the boundaries of the present linear value chain toward a sustainable system of production and consumption.
Mismanaged plastic waste is our generation’s most devastating environmental crisis. In the Asia-Pacific region, 87,000,000 metric tons of plastic are consumed annually, with 25% of plastic recycled and 65,250,000 metric tons of plastic remaining damaging the planet. The increased use of single-use plastics and waste mismanagement is clearly harming the environment, threatening biodiversity and natural ecosystems, and contributing to climate change. Moving away from a linear economy to a circular economy in which waste is eliminated, resources are recycled, and nature is regenerated is critical in these times of severe environmental threats. To accomplish this transformation, businesses rely on three circular economy principles: (1) designing out waste and pollution, (2) extending product life, and (3) regenerating natural systems. These strategies enable businesses to save costs, improve their reputation, and develop new products and markets. However, many businesses have encountered tremendous challenges when implementing a circular business model in a linear economy world. Let’s look at the stories of six businesses in Vietnam and beyond that are using the circular economy to tackle plastic pollution and climate change.
NÜ was created in 2012 in response to the ever-growing cry for ethical, conscious, and sustainable products within the self-care and hygiene industry. The business develops a wide range of sustainable products, including plastic-free straws and cutlery, biodegradable box tape, and bamboo-pulp nappies, using renewable materials. The packaging is also made of sustainable GMX material, which is fully biodegradable and compostable.
NÜ’s circular strategy involves the use of renewable and recycled resources in production processes, allowing for the partial or entire elimination of waste and pollution from the start. NÜ ensures that all products are recyclable and that all discarded materials are recycled. By mixing alternative materials with plastic-free biodegradable GMX resin, used products degrade in nature within two years, leaving no harmful residue and not releasing dioxin when incinerated. The bioagent contains chitosan and other natural additives which will trigger the reaction of many bacteria to decompose and accelerate the process of biodegradation, solving the issue with discarded items in the environment. However, one of the greatest challenges in adopting a circular economy is waste collection services, hence NÜ focuses mostly on businesses or organizations with high use per location to save CO2 in transportation.
NÜ managed to achieve accreditation through Aqua Enviro for the disposal of used straws and cutlery into the food waste stream, which can then be used to generate energy; the products are certified aerobic and anaerobic digestible. NÜ is now operating in England and Singapore, with plans to expand further throughout South East Asia as a responsible and trustworthy Eco champion in the near future.
Tien Duc Straw is a social enterprise based in Hanoi, Vietnam that produces wooden straws from trees grown in man-made forests. After being taken from production forests, trees are chopped into pieces, peeled off by the machine, and rolled into straws. Tien Duc wooden straws are made from high-quality wood and are great eco-friendly alternatives to plastic straws. The wooden straws are biodegradable and 100% natural, eliminating plastic waste from production and product packaging and guaranteeing that it does not exist in the first place.
By producing products made from man-made forests, Tien Duc contributes to one of the essential circular economy principles – regenerating resource loops, and improving the environment that the business utilizes for its operations and commercial use. By storing carbon, forests, like the seas, play a critical role in regulating global climate and local weather systems. Forest degradation releases significant volumes of carbon dioxide (CO2) into the atmosphere (through burning), and also eliminates a carbon sink from the ecosystem. According to the UN, the best way of saving a forest is to manage it sustainably and to benefit from its products and ecosystem services. Tien Duc Straw wants to perpetuate the man-made forest life cycle by using it to provide important, recyclable products while also contributing to helping people that rely on the forests for a living.
Tien Duc Straw strives to promote closed-looped consumption in the food and beverage and hospitality sectors. Despite certain challenges, such as altering consumers’ mindsets and habits, they are working relentlessly to increase communications and education with target customers in order to transition from plastic straws to more sustainable alternatives. Tien Duc is expanding its visibility in Vietnam and has exported its products to other Asian and European countries.
Developed and established in Danang, Vietnam, ReForm Plastic is a social business focused on solving the plastic waste challenge through an inclusive and circular approach that converts plastic waste into durable, technical, premium products through a unique and proven process.
ReForm Plastic is working toward a world where used plastics are managed as valuable material resources rather than as wastes to be cheaply or indiscriminately discarded. Its process is value-added, replicable, and cost-effective that processes all types of plastic discarded such as single-use items, wrappers, multilayers, flexibles, and styrofoam to convert them into a tradable, commodity board product. These end-products are durable, and waterproof and can be used as a wood replacement for furniture and construction. The approach is fully circular, ReForm Plastic can take back old products and process them again as endless products. ReForm Plastic aims to address the core issues across the value chain fully integrating into existing systems with the informal waste collectors, infrastructure, and programs and replicating its model through collaboration and a social franchise approach. It is dramatically changing the way we view the resource we call ‘waste’ and are shifting toward a circular economy system.
ReForm Plastic as a technology, material, and process innovator has built a long-standing reputation among partners and collaborators throughout the region over the past 6 years. Currently, ReForm Plastic has 8 factories operating or under construction in 6 countries across Asia and beyond through an innovative social franchising model. To date, it has processed over 150,000 kg of low-value plastics across our factories; produced over 1000 sqm of boards, and built 6 collection points across Hoi An and Danang cities.
iBAG, a brand within HRK Group, an import-export, distributor, and manufacturer of environmentally friendly packaging solutions, provides 100% biodegradable, compostable, and water-soluble packaging sourced and made in Vietnam using cassava starch and biopolymers. iBAG strives to combat plastic pollution by producing sustainable flexible packaging (carry bags, polybags, rubbish bags, vacuum bags, etc.). It provides an upstream solution that produces no waste during the process. The end-of-life products will degrade quickly and safely in both landfills and marine environments, protecting wildlife, and it does not create chemical or microplastic pollution poisoning our land.
iBAG uses several circular business strategies, such as reusing materials and reviving natural resources utilized in manufacturing processes. In addition, certain iBAG products use waste as a local resource, such as bagasse boxes made of sugar cane waste.
So far, iBAG’s greatest accomplishment has been the development of a new form of material that covers all post-consumer end-of-life alternatives, including biodegradable, compostable, recyclable, water-soluble, and even edible. They have successfully supplied the products to many well-known customers in Vietnam and beyond, with an estimated 8.5 million eco-friendly flexible packaging produced, and over 785,500 kg of plastic waste replaced. The most difficult challenge to iBAG is persuading consumers to spend a little more money on packaging in order to protect the future for the next generations in the face of serious plastic pollution and climate change.
Teo Straw was founded in 2019 in Kien Giang, Vietnam, and produces straws from natural plants, primarily eagle grass and reed grass. It offers an alternative to plastic straws while also providing local jobs in rural areas. Teo Straw was born out of the founder’s diverse experiences, from his childhood drinking from coconuts using grasses to his adulthood traveling across the world and observing the destructive impact of plastic on the environment and human health.
Teo Straws aims to produce disposable, eco-friendly drinking straws to replace plastic straws, utilizing natural resources to create products with sustainability. The production process is a closed cycle that is eco-friendly and strictly controlled, resulting in no contamination of water and land during and after production. The raw materials are wild plants in areas that are not available for farming and as the plants have a short life span, harvesting causes a minimal negative impact on the ecosystem. Furthermore, since raw materials account for 70% of the final product, energy usage during production is extremely minimal. Teo Straw ensures that no hazardous waste to the environment is produced, that no chemicals are needed, and that water and waste from production can be used for farming, thereby creating a circular flow of resources.
After three years, Teostraw has been able to mass produce the straws. During the Covid-19 hardest hits in 2020, and 2021, it successfully supplied the straws to several markets such as Germany, Singapore, New Zealand, etc. All of the products are qualified for the EU and US markets.
Glassia is a social enterprise providing water in reusable glass bottles, completely eliminating plastic from the water consumption value chain, in order to create local, circular, plastic-free bottled water products and services. The first Glassia facility was piloted in Danang, Vietnam, and began its operations in March 2021.
Glassia transforms the linear water bottling value chain into a circular system of “re-collection – sterilization – refill” through an integrated, local, and decentralized model of glass bottling facilities. It produces and distributes high-quality fully ISO and HACCP certified drinking water in glass bottles, as well as delivers and re-collects the bottles locally, reducing costs and enabling businesses to transition to reuse models. After reaching year 1 targets, Glassia has increased production and can fill up to 5 million bottles annually which is offsetting 1044 tons of carbon emission per factory.
Glassia’s key customers are sustainability-focused organizations and businesses seeking alternative products to plastic, including hotels, resorts, restaurants, banquet halls, offices, etc. Glassia is currently providing its services to various restaurant chains and hospitality groups in the Danang and Hoi An area including the Radisson, Hyatt, Hoiana, Premier Village, Novotel, and Pizza 4Ps.
One of the biggest challenges in the early stages of Glassia’s establishment is that Vietnamese consumers are still unfamiliar with the concepts of circular economy and sustainable consumption. Water plastic bottles are convenient to carry and may be affordable for them. Changing this habit seems to be hard, but it does not mean impossible. Glassia offers a solution that eliminates plastic waste at the source, and with the modern and educational branding, Glassia triggers consumers to consider circularity and its impact on the environment. Currently, Glassia plans large expansion across Vietnam and beyond to bring this circular, affordable option to various regions and directly eliminate the use of plastic.
When the circular economy is the future, businesses should begin adopting circular economy business models, piloting initiatives, and developing a transition strategy using the circular economy concept as a key driver today in order to remain competitive in the future.
(*) ReForm Plastic and Glassia are two social enterprises established and developed by Evergreen Labs.
NÜ, Tien Duc Straw, iBAG and Teo Straw are the pioneering solutions selected for the cohort of the “Plastic-free F&B Piloting Program” implemented by Venture Lab.
 GMX™ is derived from a natural, non-toxic, and sustainable marine material – Calcium from Oyster Shells Source: https://www.listengreen.com.tw/gmx-technology (Accessed on 19th July 2022).