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February 23, 2025

Decree 05 Updates Extended Producer Responsibility Regulations in Vietnam

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On January 6, 2025, the government of Vietnam issued Decree No. 05/2025/ND-CP amending and supplementing Decree No. 08/2022/ND-CP detailing the Law on Environmental Protection (“Decree 05”). Decree 05 came into effect immediately upon issuance and provides several changes to the regulations governing extended producer responsibility (“EPR”) for applicable manufacturers and importers, outlining their obligations concerning the recycling and treatment of discarded products and packages. (See our previous article on Vietnam’s EPR regulations here.)

Outlined below are some critical amendments in Decree 05.

Entities Subject to EPR Regulations

Previously, Decree 08 limited the responsibility for recycling to manufacturers and importers of products and packaging specified in statutory lists. Decree 05 expands this scope by also including entities responsible for the quality and labeling of the regulated products and goods in Vietnam.

Decree 05 inherits the regulations from Decree 08 that manufacturers and importers, if they produce and import products and packaging as stipulated by law, must fulfill their responsibility to recycle or support waste treatment activities. However, Decree 05 amends the lists of products/packaging that must be recycled or undergo waste treatment, and new products/packaging and recycling methods.

Notably, rechargeable batteries (including those used in vehicles or for electrical and electronic devices) have been added to the list of regulated products and self-propelled vehicles and construction machinery have been removed from the list.

Decree 05 also not only streamlines the recycling methods required for each type of product/packaging, but also removes the minimum requirement on the mass of products/packaging that must be recovered when recycling. Manufacturers and importers now have more flexibility in selecting recycling methods that are more suitable for actual recycling conditions in Vietnam.

Decree 05 has revised the cases of exemption from recycling and waste treatment obligations, clarifying that both packaging manufacturers and importers with annual product sales revenue below VND 30 billion are exempt from recycling responsibilities. The threshold for importers has increased compared to the previous provision. Further, Decree 05 introduces an additional exemption for manufacturers who collect and reuse their own packaging. Specifically, manufacturers who self-collect and reuse packaging to put it back on the market are exempted from recycling and waste treatment obligations if the rate of collection and repackaging meets or exceeds the mandatory recycling rate as stipulated by law.

Competent Authorities

Previously, the prime minister was responsible for adjusting and issuing mandatory recycling rates for each type of product and packaging, and issuing the recycling cost standard for a unit of product and packaging volume (referred to as “Fs” – see below) and the required financial contribution for waste treatment. Under the new decree, these responsibilities have been transferred to the Minister of Natural Resources and Environment.

Definition of Fs

Decree 05 specifies two components for the calculation of the recycling cost standard, “Fs”:

  • Recycling cost associated with the sorting, collecting, transporting, and recycling of products and packaging; and
  • Management cost associated with the supervision and support of the implementation of product and packaging recycling responsibilities. Management cost is specified as 2% of the recycling cost.

In particular, the recycling cost is estimated based on an adjustment coefficient reflecting the level of collection and recycling value of products and packaging: Products and packaging with a high collection rate and high recycling value have a low adjustment coefficient, while products and packaging with a low collection rate and low recycling value have a high adjustment coefficient.

Deadline for Financial Contribution

Decree 08 allowed manufacturers and importers to either pay the full financial contribution for waste treatment to the Vietnam Environmental Protection Fund by April 20 of each year or split the payment into two installments. However, Decree 05 mandates a full financial contribution in a single installment by April 20 each year. This is a significant change that manufacturers and importers should take note of, especially once the Fs is officially issued.

Tax Incentives

Decree 05 expands upon Decree 08 by providing specific criteria for eligibility for tax incentives beyond corporate income tax. These incentives now include exemptions from export and import taxes for eligible activities.

Specifically, products made from recycling and waste treatment activities in the list of environmental protection activities eligible for incentives and support will be exempted from export tax if they meet certain legal criteria, such as having production activities consistent with the project’s operational objectives, or using waste as production materials.

Similarly, projects importing machinery and equipment for use in waste treatment and environmental protection activities will be exempted from import tax if they meet certain criteria such as having the results of an environmental impact assessment report appraisal approved, or being granted an environmental license.

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