Vietnam Brief report: Public consultation on EPR regulations in Vietnam (2nd round) (2)

Q&A on the draft EPR regulations

On August 27, 2021, the Legislation Department of the Vietnamese Ministry of Natural Resources and Environment (MONRE) held an online public consultation: Webinar: Hearing Opinions on the Extended Producer Responsibility (EPR) Regulations in the Decree Stipulating Implementation Rules for the Law on Environmental Protection 2020. In the webinar, the second version of the EPR regulations, which is a part of the draft decree detailing the Law on Environmental Protection 2020, was publicized and explained. Then, a question-and-answer session on the draft regulations was held. Though wide-ranging issues were discussed at the webinar, the most notable issue was the “required recycling ratio.” As details of the rules regarding the ratio have not determined yet, this issue is expected to be the focus of the future discussions.

Q&A on the draft EPR regulations

Q: If a product is manufactured for the purpose of export, i.e., if the manufactured product is transported directly to a bonded warehouse, is the product subject to the EPR regulations?
A: No, it is out of the scope of the EPR regulations. This is because products manufactured for the purpose of export are not ultimately disposed of within Vietnam. However, if there are EPR regulations in the destination country, the regulations of that country must be complied with.

Q: The correlation between the actual collection and recycling rate (Ra) and the amount of contribution to the fund is unclear. For example, does higher Ra of a product/packaging material mean the higher amount to be paid?
A: We will consider means to express the correlation between the actual collection and recycling rate (Ra) and the amount to be paid. However, the amount to be paid will be determined by the National EPR Council according to the principle that the amount of contribution to the fund must be higher than the cost of recycling.

Q: The actual collection and recycling ratio (Ra) is not considered to be “real” because it is calculated using the minimum disposal coefficient (D) and the collection coefficient (T). Therefore, the equation recycling coefficient (Ra) = disposal coefficient (D) × collection coefficient (T) is not logical. So, Ra=f (D, T) should be more appropriate.
A: We accept your opinion and will adjust how the ratio is called in the future. However, since Ra=f (D, T) is a general formula, it should be a specific formula such as Ra = D×T.

Q: How will the disposal coefficient (D) and collection coefficient (T) be determined?
A: The disposal coefficient (D) is the ratio of the number of products discarded by household to the number of products purchased. The collection coefficient (T) is the ratio of the number of products collected under the recycling scheme to the number of products discarded. In the early stage of the implementation of EPR regulations, D and T will be adjusted to the minimum values, and losses in collection and pre-processing (before passing to recyclers) will also be taken into account.

Q: What criteria are used to determine the compulsory recycling rate (R)?
A: In accordance with Article 87, Paragraph 1, the compulsory recycling rate (R) is determined by the actual recycling rate (Ra) of each type of product/packaging material, environmental protection requirements, national recycling targets, and the economic and social circumstances at the time. Eventually, the compulsory recycling rate (R) is expected to be larger than Ra in order to achieve the national recycling target.

Q: If we can achieve a certain recycling ratio every year by implementing our own recycling scheme that is out of the scope of the EPR regulations, can we convert the recycling outcome into some recycling credits and exchange them with other companies or sell them?
A: We will consider introducing such a kind of scheme providing benefits for those are active to recycle their products. However, we have yet to have regulations on recycling credits.

Q: Will manufacturers bear the recycling responsibility when they use packaging materials that are subject to EPR regulations? If so, it could lead to a significant increase in product prices as more than one EPR regulation would be applied to one product.
A: As already stipulated in Article 85, Paragraph 2 of the draft decree, any manufacturer/importer of a product that uses any product/packaging material specified in Annex 50 shall implement the recycling responsibility on behalf of the manufacturer/importer of the product/packaging material used.

Q: Some products such as air conditioners, refrigerators and fans are accompanied by cardboard packaging materials. Are such cardboard packaging materials subject to the EPR regulations?
A: Cardboard and similar materials used to package products fall under the definition of the packaging materials stipulated in Article 54 of the Law on Environmental Protection. Therefore, for cardboard materials, the recycling responsibility must be implemented. Please note that either the implementation of recycling or the contribution to the fund may be selected.

Q: If a product subject to the EPR regulations is fitted with other products that are not subject to the EPR regulations before being placed on the market, will the manufacturer be responsible for recycling as well? Or will they be allowed to be disposed of as waste?
A: Only the products and packaging materials specified in Annex 50 of the draft decree are subject to the EPR regulations. So, the cost for collection and recycling of such accessories should be discussed between the manufacturer and consumers. However, in order to evaluate the results of the manufacturer’s implementation of its responsibility, it is recommended to include the collection and disposal of such accessories in the relevant recycling report.

Q: When disposing of oil-based products, we have to pay an environmental tax of 2000 VND/L. If we are also required to make a contribution to the Environmental Protection Fund, it should be a duplication of taxes. In addition, COVID-19 has significantly affected management of business entities. Are you planning to introduce some exemption measures for such cases?
A: Environmental taxes and contribution to the Environmental Protection Fund are essentially different. Though the environmental tax is collected and used by the state government, contributions to the fund will be used for the collection and recycling of discarded products. In addition to making contribution to the fund, business entities can choose different recycling methods.

Q: Have you defined the terms “biodegradable materials”, “environmentally friendly packaging materials,” and others?
A: They are not covered by our EPR regulations. However, we are currently considering to make environmentally friendly materials out of the scope of our EPR regulations.