Circular economy: A new growth engine

Mr. Nguyen Quang Huan, a representative of the Binh Duong province in the 15th National Assembly and a member of the National Assembly's Committee for Science, Technology, and the Environment, Vice Chairman of the Vietnam Clean Water and Environment Association, and Chairman of the Board of Directors of Halcom Vietnam JSC

In an exclusive interview given to our reporter, Mr. Nguyen Quang Huan, a representative of the Binh Duong province in the 15th National Assembly and a member of the National Assembly's Committee for Science, Technology, and the Environment, Vice Chairman of the Vietnam Clean Water and Environment Association, and Chairman of the Board of Directors of Halcom Vietnam JSC, shared this.

The Prime Minister approved the plan to build the circular economy in Vietnam in Decision No. 687/QD-TTg on June 7, 2022. A circular economy is therefore necessary to achieve the Sustainable Development Goals (SDGs). What do you think about this, sir?

It must be emphasized that this policy is entirely correct, in accordance with the COP 26 conference's principles, with a zero emission rate.

In a circular economy, the energy output from one product cycle can be used as an input for the following product cycle. As a result, the production output is no longer waste but will be recycled to build interregional linkages. In other words, rather than having a single development, linear development in every manufacturing line, or even development in every product, we will have even development along the chain of links. An economic relationship is thought of as reciprocal assistance between sectors. In Resolution No. 16 and NQ32 of the XV National Assembly, which focus on inter-regional linkages as a necessary trend of the global circular economy. This strategy has also been adopted by the Party and, in particular, the National Assembly.

The State's role is essential in the early stages of circular business models. Sir, what are your thoughts on this?

The State's first investment in the creation of the circular economy, which is geared toward luring investors, is crucial. Because private investors would have to meddle with research and face significant risk if they joined in the circular economy without any sort of specific business model, they would invest in areas that were open to them. The State will develop a circular business model when it invests in the circular economy. For instance, a model farm that raises dairy cows will produce cow manure and other farm pollutants. Many private investors would be drawn in if the state made an investment in producing biogas from the aforementioned output to generate electricity, gas, etc.

Additionally, making investments in a circular economy would initially provide difficulties for investors; as a result, the State should offer assistance to help investors overcome these difficulties.

However, the development of circular business models will be fraught with difficulties, sir.

Developing circular business models is difficult for several reasons, one of which is finding the correct technology. For instance, the factory uses sugar cane to produce sugar. If bagasse was formerly utilized as cow feed or manure, it can now be used as a biomass energy input. However, in order to do this, biomass electricity technology must be created.

In economics, the term "smiling curve" is employed. The production cycle's upstream, midstream, and downstream points are on that curve. The upstream and downstream sectors are where we most frequently deploy technology, innovation, and digitalization and where we add the most value. If we do support this technology, the products' added value will be more than it would be with midstream production utilizing only basic techniques. If we don't develop and accept new technologies, we'll always produce poor-quality things and use low-cost workers, eventually losing our competitive advantages. Sustainable development is not that.

We should study the circular economy since it will motivate us to produce. Because the product has so far followed a linear path, we are only concerned with the output during production, and then we sell it. The waste materials are dumped in the interim. We must now apply technology to use such waste resources as input. As a result, the input costs were low, the output prices remained constant, and the profit increased.

So, what are the necessary motivations to help businesses develop the circular economy, sir?

There won't be any waste if the circular economy is used effectively because it was recycled. The businesses' profit is their strongest driver. Additionally, businesses will save input materials when trash is recycled, minimizing negative environmental effects.

It can be argued that the circular economy is advantageous for the economy, environment, and society.

Many thanks, Sir!