Eco-Industrial Park (EIP) – An inevitable trend of sustainable development

Mr. Vo Van Minh, Chairman of Binh Duong Provincial People’s Committee, affirmed that developing the eco-industrial park (EIP) model is becoming the criterion and top choice of foreign direct investors.

Current status of pollution discharge from industrial activities in Vietnam

Vietnam boasts an impressive number of industrial parks, coastal economic zones, and border economic zones spread across most provinces and cities. Specifically, there are 407 industrial parks, 18 coastal economic zones, and 26 border economic zones. These areas have successfully attracted a staggering 21,000 investment projects, both domestic and foreign, resulting in a total capital investment of around US$340 billion. It is worth noting that this thriving industrial sector contributes significantly to the state’s overall budget, accounting for nearly 12% of total state budget revenue.

Regrettably, the Government’s environmental report brings attention to a concerning revelation. Despite their significant economic contributions, the multitude of projects implemented in economic zones and industrial parks carry substantial risks of environmental pollution. Industries such as metallurgy, mineral mining, ship dismantling, paper and pulp production, textile printing and dyeing, leather tanning, petrochemical refining, thermal power, steel, chemicals, fertilisers, and pharmaceuticals continue to dominate and produce substantial amounts of wastewater and hazardous waste. Astonishingly, approximately 10% of industrial parks lack centralised wastewater treatment systems, while 20% of environmental protection efforts go unexamined or unrecognised. Even more alarming is that 75% of industrial parks do not possess the necessary facilities to prevent and manage ecological incidents.

The current state of water quality in river basins that receive wastewater, particularly in industrial parks and economic zones such as Nhue Day River Basin, Dong Nai River Basin, Mekong River Basin, and Cau River Basin, is a cause for concern. These areas show clear signs of contamination, with many parameters exceeding acceptable standards. In some cases, the water quality index (WQI) has been measured at poor or even polluted levels, as seen in the Nue and Saigon Rivers. Dust pollution poses a significant challenge for industrial parks, especially those in the northern regions where outdated technology is prevalent.

Additionally, local noise and odour nuisances can be found in some industrial areas, including sewage treatment plants, starch, rubber, and shoe processing plants. The soil environment is also being impacted, with monitoring results indicating increasing levels of heavy metals in agricultural land surrounding Ho Chi Minh City and industrial parks in Binh Dinh, Da Nang, and Binh Duong provinces. Some of the heavy metals that have been detected include copper, zinc, cadmium, arsenic, mercury, and chromium.

The local industrial production in various regions is minimally affected by economic zones and industrial parks, primarily because of their limited production cooperation model. Consequently, enterprises face significant challenges in integrating themselves into the foreign direct investment (FDI) value chain. Moreover, it is worth noting that the environmental protection technology infrastructure in numerous locations is inadequate and requires further development.

The birth of the Eco-Industrial Park (EIP) model has paved the way for enhancing the sustainability of industrial production, minimising pollution, and maximising the economic and social advantages of industrial parks. This model is a crucial foundation for establishing an eco-industrial park, which fosters coordination and collaboration among industries through a concept known as “industrial symbiosis.” This concept involves utilising the energy and materials produced by one industry as inputs for other industries or enterprises, thereby promoting efficient resource consumption.

What is an Eco-Industrial Park (EIP)?

Eco-industrial parks are explained according to Clause 5, Article 2 of Decree 35/2022/ND-CP as follows:

5. An Eco-industrial park is an industrial park in which businesses participate in cleaner production activities and efficient resource use, with linkages and cooperation in production to realise currently operating in industrial symbiosis; it meets the criteria specified in this Decree. Thus, an Eco-Industrial Park is a “community” of businesses working together in production and services, aiming for both development and environmental protection. This industrial park model includes member businesses cooperating to promote the economy and society. At the same time, they manage and solve the maximum problems related to natural resources, minimising negative impacts on the environment.

Eco-industrial park standards require significant investments to meet regulations:

• Infrastructure must comply with the law, protect the environment and labour and provide essential services.
• Clean production and efficient use of resources.
• Land area reserved for green buildings must be at least 25%.
• There is at least one industrial symbiotic association with at least 10% of the participating member businesses.
• In addition, social, cultural and sports projects in the industrial park must be mentioned.
• The eco-industrial park has a mechanism to monitor and manage inputs and outputs and effectively operate resources and emissions.

Applying the eco-industrial park model in Vietnam is a solution towards green growth and sustainable development. Orientations implemented by relevant agencies in line with trends focus on the following:

• Develop policies, regulations and criteria for eco-industrial parks.
• Strengthen planning and management of eco-industrial parks.
• Promote technology transfer and clean and safe production methods.
• Technical support, access to investment incentives and efficient use of resources.

Approach the practices of Japan and Korea in developing Eco-Industrial Park.

The World Bank, under the guidance of expert Ms Nah Yoon Shin, is actively working towards supporting Vietnam’s dedication to the advancement of eco-industrial parks. To achieve this goal, the World Bank has initiated a technical assistance project to evaluate the viability of developing specific eco-industrial parks within Vietnam. The primary objective of this project is to assist the Vietnamese Government and provincial authorities in enhancing the environmental competitiveness of the manufacturing industry through the establishment of eco-industrial parks. Becamex IDC and Binh Duong province have been chosen as the key partners for this endeavour.

According to Ms Nah Yoon Shin, establishing an eco-industrial park in Binh Duong has provided valuable insights and performance monitoring and attracted top investors. This internationally recognised park has proven to be beneficial for the region. By implementing eco-industrial parks, production costs can be reduced, decarbonisation ratings can be improved, and investors and industrial parks can enhance their competitiveness.

Binh Duong Province is expanding its industrial park infrastructure to meet the growing demand. In addition to the 29 existing industrial parks, the province focuses on developing a state-of-the-art science and technology industrial park in the Bau Bang district, spanning 400 hectares. Furthermore, plans are underway to expand the Nam Tan Uyen, Rach Bap, and Cay Truong industrial parks.

Recognising the need for modernisation, Binh Duong Province also explores transforming existing industrial parks into various specialised types. These include supporting industrial parks, ecological and innovative industrial parks, and urban service industrial parks. These initiatives will align with the adjustments planned for the Binh Duong urban area between 2021 and 2030, with a long-term vision extending to 2050.

Binh Duong Province, under the guidance of Mai Hung Dung, deputy chairman of the Binh Duong Provincial People’s Committee, has adopted global eco-industrial park standards and practices from developed countries like Japan and South Korea. These standards encompass various aspects such as energy conservation, digitalisation, fostering symbiotic relationships among enterprises, and CO2 treatment. Embracing this global trend, numerous businesses in Binh Duong have already made significant changes to align with these standards.

Initial results of developing Eco-Industrial Park

In early 2022, VSIP III Industrial Park (Binh Duong province) started construction. The project, which has an investment capital of more than 6,400 billion VND, is built on 1,000 hectares in Hoi Nghia commune, Tan Uyen City, and Tan Lap commune, Bac Tan Uyen district.

This 3rd generation Industrial Park is designed to integrate innovative technology in operations – from energy, water and waste usage to traffic management and security. Using multiple real-time monitoring devices to monitor, analyse and optimise performance remotely, enhancing visual monitoring of activities, helps this industrial park become safer and more effective for investors, production and workers.

VSIP III Industrial Park has just started construction and has welcomed many “eagles” to “nest”. Notably the appearance of the LEGO Group (Denmark) with a project of over 1.3 billion USD. This is one of the three most significant foreign investment (FDI) projects in Binh Duong up to this point. “LEGO chose VSIP III because the Vietnamese Government plans to invest in expanding renewable energy production infrastructure and facilitate cooperation with foreign companies looking for high-quality investment. This is one of the factors that helped LEGO decide to build in Vietnam,” said Mr Carsten Rasmussen, CEO of LEGO Group.

The LEGO Group affirms that this is the world’s first carbon-neutral LEGO factory developed in a green, sustainable and environmentally friendly direction. The goal is no carbon emissions; the power source used to operate the factory is renewable energy provided by the solar battery system from the battery field right next to the factory.

EIP implementation program in Vietnam

On April 12, in Ho Chi Minh City, the Ministry of Planning and Investment, in coordination with the United Nations Industrial Development Organization (UNIDO), organised a workshop to summarise the project “Deployment of eco-industrial parks in Vietnam”. South following the approach of the Global Eco-Industrial Park Program” with aid from the Swiss Federal Economic Directorate (SECO).

Speaking at the conference, Mr Le Thanh Quan, Director of the Department of Economic Zones Management, Ministry of Planning and Investment, highly appreciated the project’s contribution to promoting the implementation of the eco-industrial park model, suitable under the National Strategy on Green Growth for the period 2021-2030, commitments in implementing sustainable development goals to implement circular economy and realising Vietnam’s goal of achieving net zero emissions by the year 2021-2030. 2050. Mr. Quan commented: “Strengthening capacity and strict coordination mechanisms play an important role in promoting Vietnam’s green growth and circular economy agenda.”

Also at the Workshop, Ms Sibylle Bachmann, Head of the Development Cooperation Agency, Swiss Embassy in Vietnam, emphasised the vital role of the project in creating conditions for sustainable and prosperous industrial development. With the support of the Project, Vietnam has issued regulations related to industrial solid waste management, reuse and recycling of wastewater. In the coming period, the Swiss Government will continue to support Vietnam through UNIDO in putting policies into practice.

As a representative of the Swiss Government, one of the countries always at the forefront of innovation, Ms Sibylle emphasised the importance of policies to promote the application of new technology solutions to realise a circular economy. Complete and encourage the private sector’s commitment to green investment. In addition, the project is developing criteria and indicators of eco-industrial parks based on the best international standards, which will be an essential tool to monitor the operations of industrial parks and the Eco-Industrial Park.