The Rise of Biodegradable Packaging in Vietnam

04Mar2025

B&Company

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Vietnam faces a growing plastic waste crisis, with single-use plastics causing significant pollution. As sustainability awareness rises, businesses and consumers seek eco-friendly alternatives. Biodegradable packaging is a promising solution that can decompose faster and reduce environmental harm. This article explores Vietnam’s transition to biodegradable packaging, its growth potential, and existing challenges.

The plastic waste crisis in Vietnam

According to a joint study by WWF-Vietnam and the Ministry of Natural Resources and Environment, Vietnam discharges approximately 1.8 million tons of plastic waste into the ocean annually, ranking among the top Asian countries contributing to ocean plastic pollution[1]. Notably, one-third of this waste consists of plastic bags, with over 80% being discarded after a single use[2]. The Plastic Waste Pollution Analysis Report in Vietnam indicates that most plastic waste into the ocean comes from food packaging for takeout (accounting for 44% of total waste), fishery-related waste (33%), and household waste (22%)[3].

The increase in plastic waste can be attributed to the booming economy and industrial growth, particularly in sectors such as food & beverage (F&B), e-commerce, and retail, as well as agricultural production activities. The prevalence of food packaging waste can be explained by the widespread popularity of takeout and delivery services, leading to the extensive use of single-use food containers, cups, and plastic straws. Additionally, the growth of the fast-moving consumer goods (FMCG) industry, retail sector, and e-commerce has also contributed to plastic waste through the use of plastic packaging for various products. The agriculture sector in Vietnam is also making a significant contribution to annual plastic waste generation (over 1 million tons of plastic waste produced), with a wide range of products such as animal feed packaging, agricultural pesticides, veterinary medicine, as well as fishing tools and equipment, etc[4].

Given this pressing challenge, there is an urgent need for change in Vietnam’s approach to packaging. The adoption of alternative and environmentally friendly packaging solutions is not only a necessity but an inevitable transition to align with global sustainability trends and mitigate long-term environmental damage.

The push for sustainable packaging: Policy and Consumer motivation

The transition to eco-friendly packaging in Vietnam is largely influenced by government policies, shifting consumer preferences and market demand.

The Vietnamese government has taken strong regulatory measures to curb plastic waste. According to Article 64 of Decree No. 08/2022/ND-CP, effective January 1, 2026, single-use plastics and non-biodegradable plastic packaging will be banned in shopping malls, supermarkets, hotels, and tourist areas (except for specific product packaging)[5]. Furthermore, by 2031, the production and import of single-use plastics and microplastic-containing products will be completely prohibited, except for export purposes or specialized applications[6]. Additionally, the government has introduced tax incentives and support policies for companies investing in eco-friendly packaging solutions, encouraging businesses to transition towards sustainable alternatives.

Vietnamese consumers are becoming more conscious of environmental issues, leading to a growing preference for sustainable packaging. A market survey revealed that 57.4% of Vietnamese consumers are willing to pay extra for eco-friendly packaging if the price difference is reasonable, while 41.1% actively choose sustainable packaging when available[7].

Foreign market requirements are also shaping Vietnam’s packaging industry. Some Vietnamese exporters have lost contracts to international competitors due to failure to meet sustainable packaging standards[8]. For example, several Vietnamese shrimp exporters lost access to the EU market, whereas Thai competitors succeeded by offering biodegradable or recyclable packaging solutions[9].

The rise of biodegradable packaging in Vietnam

Facing the alarming situation of plastic bag consumption and driven by government policies and customer preferences, the Vietnamese market is gradually shifting towards more environmentally friendly packaging solutions. The market has seen the emergence of various types of sustainable packaging, such as reusable packaging, recycled packaging, biomass packaging, and especially, the biodegradable packaging.

Image 1. Main types of Eco-friendly Packaging

Source: Renouvo

Biodegradable packaging is considered a significant breakthrough in the packaging industry due to its ability to decompose naturally in the environment within a short period (1.5 – 2 years) while maintaining similar usability to conventional plastic packaging[10]. Biodegradable packaging breaks down through microbial activity into water, CO₂, and nutrients, which return to the soil[11].

Biodegradable packaging materials are produced in two primary ways: directly from naturally derived compounds or through biotechnology applications[12]. Starch is considered a promising raw material for biodegradable packaging due to its low cost and availability, and it can be sourced from various crops such as potatoes, corn, cassava, and rice[13].

Many major retailers and businesses in Vietnam are actively adopting biodegradable packaging and promoting eco-friendly initiatives. Supermarkets are increasing imports of fully biodegradable products and launching incentives to reduce plastic use. Vinmart offers a 1,000 VND discount for customers refusing plastic bags, while Aeon Vietnam promotes the “Bring Your Own Bag” campaign[14]. Big C, in partnership with An Phát Holdings (one of the largest biodegradable packaging producers in Vietnam), runs the “Earth Day Compostable” initiative to replace single-use plastic bags with biodegradable alternatives[15]. Lotte Mart has dedicated sections for eco-friendly products like biodegradable cutlery and straws and aims to eliminate plastic bags by 2025[16]. Leading hotels and hospitals, including Daewoo Hotel, Lotte Hotel, Bảo Sơn Hospital, and Vinpearl Resort, have also switched to biodegradable bags to support sustainability efforts[17].

Image 2. AnEco biodegradable plastic bag product of An Phat Holdings Group is recognized as “Vietnam National Brand” in 2022

Source: VnExpress

With strong governmental support, increasing consumer awareness, and industry-driven innovation, Vietnam’s biodegradable packaging market holds significant potential for expansion.

Current challenges of biodegradable packaging in Vietnam

Despite its advantages, biodegradable packaging still faces several challenges in Vietnam[18]. Although designed to decompose faster than conventional plastic, its actual lifespan may be limited^.Biodegradable materials may not be as durable as traditional plastics, which can limit their application in certain industries[19]. Another significant barrier is cost. Currently, biodegradable packaging is 10-15% more expensive than conventional plastic alternatives, making it less accessible to some businesses and consumers[20]

Furthermore, the construction of a biodegradable packaging decomposition system is also a major challenge because this requires a very particular disposal technique with suitable environmental conditions. If sent to landfills, biodegradable materials may not decompose efficiently due to lack of oxygen. Some biodegradable plastics in landfills may produce methane (CH₄), a potent greenhouse gas[21]. Biodegradable plastics mixed with conventional plastics can also contaminate recycling processes, reducing the quality of recycled materials. Without proper waste sorting and disposal systems, its environmental benefits may not be fully realized and could even pose unintended risks.

Conclusion

Vietnam’s transition to sustainable packaging is gaining momentum, driven by government policies, consumer awareness, and corporate sustainability efforts. The emergence of biodegradable packaging marks a crucial step in Vietnam’s battle against plastic waste. However, challenges such as high costs, infrastructure gaps, and performance limitations must be addressed to ensure the long-term success of biodegradable packaging in Vietnam.

[1] Hai Phong Portal. By 2025, use 100% nylon bags and environmentally friendly packaging at shopping malls and supermarkets in the city. <Access>

[2] CESTI. Development of biodegradable plastic in Vietnam <Access>

[3] Communist Party of Vietnam Electronic Newspaper. Ocean plastic waste and the numbers speak for themselves <Access>

[4] Natural Resources & Environment Newspaper. Reducing plastic waste in agriculture <Access>

[5] Ministry of Industry and Trade (MOIT) electronic information portal. After 2025, no single-use plastic products or non-biodegradable plastic packaging will be circulated or used in shopping malls and supermarkets.<Access>

[6] Ministry of Industry and Trade (MOIT) electronic information portal. After 2025, no single-use plastic products or non-biodegradable plastic packaging will be circulated or used in shopping malls and supermarkets.<Access>

[7] Department of Energy Conservation and Sustainable Development. Changing consumer behavior through the use of green packaging <Access>

[8] CafeF. Vietnam’s packaging market worth over $4 billion faces pressure to “green” and the risk of losing orders to foreign competitors.<Access>

[9] CafeF. Vietnam’s packaging market worth over $4 billion faces pressure to “green” and the risk of losing orders to foreign competitors.<Access>

[10] Vietnam Packaging Association. Biodegradable Packaging: The Right Choice to Protect the Environment <Access>

[11] Renouvo. Types of biodegradable packaging materials and 5 steps to use them <Access>

[12] Vietnam Packaging Association. Biodegradable Packaging: The Right Choice to Protect the Environment <Access>

[13] Vietnam Packaging Association. Biodegradable Packaging: The Right Choice to Protect the Environment <Access>

[14] AnEco. Vietnamese businesses increase use of environmentally friendly products <Access>

[15] AnEco. Vietnamese businesses increase use of environmentally friendly products <Access>

[16] AnEco. Vietnamese businesses increase use of environmentally friendly products <Access>

[17] AnEco. Vietnamese businesses increase use of environmentally friendly products <Access>

[18] Europlas. Advantages and disadvantages of biodegradable packaging <Access>

[19] Europlas. Advantages and disadvantages of biodegradable packaging <Access>

[20] Europlas. Advantages and disadvantages of biodegradable packaging <Access>

[21] Europlas. Advantages and disadvantages of biodegradable packaging <Access>

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