Investors face up to complex eco-industrial park process

According to experts and representatives of cities and provinces, Decree No.35/2022/ND-CP is simply a premise for formatting eco-industrial parks (eco-IPs) as well as transitioning from traditional parks to ecological ones – and investors can do nothing except submit an investment plan for approval until there is a specific circular available.

Eco-industrial parks require vast amounts of investment compared to traditional facilities

A representative of Quang Tri Industrial Zones Management Authority told VIR that both the central province is waiting for such a circular to guide investors, who have the intention to develop eco-IPs or revamp older parks.

“I think that it will take a long time to build the circular because Decree 35 is established on the basis of 13 laws that relate to many ministries. It is difficult to gather relevant parties to build up the circular,” the representative said.

Besides this, investors need time for their planning and the province also needs time to take eco-IPs into their localities’ planning. “Furthermore, we are waiting for the official conference organised by the Ministry of Planning and Investment (MPI) on how to implement the decree effectively,” he said.

Pham Hong Diep, chairman of Shinec JSC – the developer of Nam Cau Kien IP, the first eco-IP in Vietnam established on criteria for industrial zones under a 2018 decree – said, “The expenditure for developing an eco-IP is more costly than that of a traditional one. Also, it would take a longer time to recoup the investment capital.”

It has been two months since the industrial real estate developer Capella Land JSC had a meeting with leaders of Quang Tri People’s Committee to propose the development of an eco-IP. However, activities have stalled in part because of uncertainty surrounding the new decree.

According to Capella Real Estate, there have been no proposals on developing eco-IPs since the decree came into effect in July.

Nguyen Hong Chuyen, deputy director of Capella Land JSC told VIR, “The park is a development in which the procedures are more complex than that of a normal park.”

According to previously-released information, the eco-IP was due to cover an area of 450 hectares in the southwest of Quang Tri Economic Zone and see a total investment of VND2.3 trillion ($100 million). The construction is expected to be divided into four phases, starting from the second quarter of next year to the end of 2026.

Nguyen Tram Anh, the national project officer of the United Nations Industrial Development Organization (UNIDO) said, “Enacting Decree 35 will lead the way for modern IP models, which is an inevitable trend to contribute to the national target of reducing greenhouse gas emissions.”

Anh noted that Vietnam’s eco-IP development policy is more advanced than that of some other countries.

“Indonesia is still learning from our decree, and we are even more developed in this field than the United Kingdom or Colombia,” Anh insisted.

At present, almost all eco-IPs in Vietnam are implemented under a pilot model. In 2020, the MPI in collaboration with UNIDO and the State Secretariat for Economic Affairs of Switzerland launched the model on eco-IP intervention in Vietnam, utilising perspectives from the Global Eco-Industrial Parks Programme.

The scheme is being implemented in five localities until next year and is the result of previous successful cooperation between 2014 and 2019, which brought a significant boost in policy development and innovative technologies and practices.

Various solutions for resource efficiency and cleaner production were implemented under the framework of the pilot initiative, which led to avoiding emissions worth 32,000 tonnes of CO2 every year.

In order to optimise the implementation of Decree 35, the MPI is completing the social and economic indicators for eco-IPs in Vietnam. The MPI will gather opinions from real estate developers and experts before submitting for the government’s approval.

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