Promoting green startups

Encouraging signs

Vietnam has identified green growth as a core development strategy early on. A series of major policies and programmes such as the National Green Growth Strategy (Decision No. 1658/QD-TTg in 2021), the Circular Economy Development Scheme (Decision No. 687/QD-TTg in 2022), and the “Net Zero” Programme KC.16/24-30 chaired by the Ministry of Science and Technology have clearly reflected the country’s determination to build a low-emission, environmentally friendly economy.

In particular, the Government is implementing programmes to support private enterprises in sustainable development (Decision No. 167/QD-TTg in 2022), including financial mechanisms, tax incentives, and market access support for green businesses.

According to the Ministry of Science and Technology, Vietnam's startup ecosystem currently has over 4,000 innovative startups, including two unicorns and 11 companies valued at over 100 million USD. The ecosystem also includes more than 1,400 startup support organisations, 202 co-working spaces, 208 investment funds, and 35 business incubators.

Among these, an estimated 200–300 businesses focus on green transformation sectors such as renewable energy, environmental technology, sustainable agriculture, and circular economy. It accounts for around 5–7% of all startups.

These businesses’ products and solutions not only address domestic environmental challenges but are also making inroads into international markets.

A prime example is Enfarm Agritech, whose smart nutrient-measuring device uses IoT and AI technologies to help farmers optimise fertiliser use, contributing to reducing greenhouse gas emissions while boosting crop yields. This device has already been deployed in the Philippines, supporting a coffee cultivation project covering 30,000 hectares.

The standout feature of this smart device lies in its ability to assess four key components: soil, water, crops, and fertiliser by using AI and IoT technologies. It provides farmers with insights into the nutritional needs of their crops, addressing one of the biggest problems in global agriculture: 60% of fertilisers are not absorbed by plants, leading to an annual loss of 120 billion USD, the degradation of one-third of arable land, and 5% of global greenhouse gas emissions.

Another notable startup is BUYO Bioplastic JSC, winner of TECHFEST 2023, with its breakthrough solution of biodegradable packaging made from sugarcane residue and organic materials. The product meets stringent European and American standards and has been participated in the sustainable supply chains of major corporations such as AB InBev, Kikkoman, and Bidfood.

Several startups, including Abivin, Otrfy, and Hubtech, have also pioneered the application of digital solutions, artificial intelligence, blockchain, and data management to optimise performance, reduce operating costs, and cut emissions in logistics, laying the groundwork for a green logistics ecosystem.

These solutions fall under the category of climate technology, aimed at reducing greenhouse gas emissions, adapting to the impacts of climate change, and facilitating the transition to a low-carbon economy.

The global green technology market is growing rapidly, estimated to reach the annual growth rate of 22.4% by 2032, creating a golden opportunity for pioneering startups.

“We are facing a tremendous opportunity to shape a green and sustainable future for Vietnam and the world. Innovation, creative startups, and cooperation are the keys to solving pressing challenges while driving circular economy development,” noted Hoang Minh, Deputy Minister of Science and Technology.

Remaining challenges

Despite promising developments, green startups in Vietnam still face significant hurdles.

According to the Department of Startup and Technology Enterprises, green startups are currently hampered by three major bottlenecks: lack of tailored support policies, limited access to capital, and a shortage of skilled professionals in environmental technology and sustainable management. Meanwhile, the consumer market for green products remains underdeveloped. Many consumers are reluctant to pay higher prices, and green standards are not yet widely integrated into supply chains.

Another major difficulty lies in accessing public markets. While the private sector shows greater agility in engaging with startups, state-owned enterprises often encounter prolonged and complex administrative procedures from research to procurement, making collaboration slow and inefficient.

Importantly, many existing legal regulations are not keeping pace with the rapid development of green technologies. New eco-friendly materials lack a clear legal framework, and current procurement criteria remain focused on price and experience, failing to accommodate the innovation advantages that startups bring.

Do Hong Hanh, Director of BUYO Bioplastics, urged the government to adopt stronger policies to encourage the use of green materials. This includes measures to connect supply and demand among businesses and concrete regulations such as banning conventional plastics in certain sectors or mandating minimum recycled or bio-based content in products. She also hopes that Extended Producer Responsibility (EPR) policies will exempt green materials, thereby incentivising consumers to shift toward more sustainable consumption habits.

From an agritech perspective, Nguyen Do Dung, co-founder and CEO of Enfarm, emphasised the importance of the public sector taking the lead in adopting and applying domestic technologies. He noted that Enfarm’s products received positive reception in international markets like the Philippines, largely due to local government’s support. In contrast, state-owned enterprises in Vietnam despite dominating the agriculture and fertiliser sectors, have been slow to adopt due to bureaucratic hurdles.

Dung proposed that management agencies, particularly the Ministries of Agriculture and Environment, proactively pilot new technologies and integrate them into local agricultural extension systems to support farmers. Additionally, green startups should be allowed to participate in carbon credit projects and clean farming initiatives.

Access to green finance and tax incentives is another persistent challenge. Many startups have pointed out that existing green credit packages are virtually indistinguishable from regular loans, and tax incentives for green technology products remain vague.

In this context, the green startup community is expecting for a long-term strategy in which the State makes stronger investments in science and technology while establishing a legal framework aligned with the rapid pace of green economic development.

Experts believe Vietnam is on the right path with its strategic green growth policies. What is needed now is to concretise these policies into action from legal frameworks, financial incentives, to expanded markets for green products. At that time, Enfarm, BUYO or Abivin will not only be “bright spots”, but will become the core force in creating a green, clean, and smart economy for the future.