Overview of Sustainability Market
Global Market
According to Allied Market Research, The Global GreenTech and Sustainability Market was estimated to generate a revenue of $10.32 billion in 2020, forecasted to reach about $74.64 billion by 20230, with a Compound Annual Growth Rate (CAGR) of 21.9%. Furthermore, more than USD$300 billion was invested globally in renewable energy sources in 2020. Solar and Wind Power have accounted for approximately 70% of the new energy capacity in 2021, according to the Energy Information Administration.
This shows that the demand for GreenTech and Sustainability is increasing as more countries and companies start to pay more attention to the environment, which provides an opportunity for companies in the relevant field.
Vietnam Government’s Plans
In April 2022, Deputy Prime Minister Le Van Thanh agreed and issued the Decision 450/QD-TTg: The National Strategy for Environmental Protection, to ensure the country’s economic development must be as environmentally friendly as possible.
This creates an opportunity for companies that provide recyclable materials in the supply chain, remanufacturing components for future input, waste-to-energy solutions, etc.
Some of the sustainable goals that Vietnam’s government has set include:
- To reduce more than 75% of Marine Plastic Debris by 2030
- To decrease its greenhouse gas emissions per GDP by 15% compared to 2014.
- To reuse, and recycle at least 85% of the plastic waste and reduce at least 50% of the plastic waste pollution in the sea.
- To collect at least 50% of the urban solid waste, recycle 100% of the organic waste in the urban areas and around 70% of the organic waste in the rural areas, all by 2030.
What Is GreenTech?
Green Technology (GreenTech) generally refers to the use of technology to reduce global warming and prevent climate change through producing cleaner energy, producing alternative fuels, etc. GreenTech is also one of the rising technology trends in the Sustainability Field.
GreenTech companies are usually science or research-based, with the goal of protecting our environment. Solar Energy is one of the breakthroughs of GreenTech, as an alternative source of fossil fuels.
For more information of Solar Energy in Vietnam, you may visit this link:
Sustainability Field
Sustainability in the startup ecosystem is usually referring to businesses that aim to create a more sustainable future with their environmentally-friendly products or services.
They have the missions to reduce global warming, make our earth more green, or encourage more people to take part in sustainability practices with their innovative business models.
Some examples include:
- Hachi
- Hachi is a Hanoi-based smart agriculture company that leverages IoT (Internet of Things) technology to provide solutions for urban agriculture and irrigation. This allows the farmers to be able to control and monitor their operations remotely and easily.
- Dat Bike
- An Electric Motorcycle company that offers a greener, and cleaner motorbike to the Vietnamese public to reduce carbon emissions.
- IoTeamVn
- IoTeamVN leverages IoT technology to assist customers to use energy more efficiently and affordably at their houses, without sacrificing the comfortness. Similar to Hachi, but they are targeting households.
Challenges of GreenTech
1. High Barrier of Entry
There were about 245 projects with renewable energy solutions, but only 19% of them proceeded to the construction stage and only less than 8% of them are still operating.
As GreenTech companies are usually research or science-based, it is not easy for companies to develop useful solutions that can contribute to the environment yet able to sustain and profit as a business at the same time.
2. Unsustainable Practices are still prevalent
Plastic Waste
Unsustainable practices are still prevalent in Vietnam. For example, the use of plastic bags continues to increase as about 80% of Vietnamese shoppers still do not bring their own carriers. This causes Vietnam to have one of the highest rates of plastic waste and is currently ranked 4th globally, at about 1.83 billion tons per year.
Water Pollution
Furthermore, Vietnam is expected to cost about 3.5% of its GDP to solve the increasing water pollution problem according to the World Bank. One of the examples is at least USD 10 billion investment will be needed to upgrade its wastewater drainage to reduce the water pollution, according to the Vietnam Water Supply and Sewerage Association (VWSA).
Air Pollution
Vietnam ranked 36th out of 118 globally with one of the most serious air pollution in 2021.
General Waste
About 85% of the waste generated in Vietnam was buried in landfill, which is posing a potential and tremendous detrimental effect to the environment.
Opportunities for GreenTech
1. Increasing Demands for Energy
In 2018, the demands of energy from coal, oil and other energy imports rose by 14% and approximately 33% of Vietnam’s power supply is generated from these energy sources.
With the rapid economic growth, the demand of electricity or alternative energy sources is increased by at least 25% in the upcoming years while the demand of energy for Vietnam’s industrial base will be increased by at least 8% in 2023. This creates a higher demand of energy and needs for more new energy sources in Vietnam.
In order to meet the growing demand, the Ministry of Industry and Trade of Vietnam (MOIT) forecasted that an approximately USD 150 billion investment will be needed by 2030.
2. Strong External Support
The Vietnam Government aims to achieve carbon neutrality by 2050. With the support of the Government, 9 fast moving consumer goods or packaging companies in Vietnam including TH Group, Coca-Cola, Nestle, etc, have formed the Vietnam Packaging Recycling Alliance (PRO Vietnam), with the goal to establish more green initiatives and actions.
Furthermore, according to the ITI’s Fund Managing Director – Ngo Dinh Dat, the outstanding startups in Vietnam are usually businesses that focus their missions on community development, sustainability such as recycling, reducing energy consumption, cleaner energy source and increasing employment rates for disadvantaged communities.
Thus, it creates an opportunity for more GreenTech startups who can contribute to the environment together, to potentially receive more support from the Government and other organizations.
3. Changing In Consumer Behaviors
According to a recent research by Kantar, world’s leading data, insights and consulting company, Vietnamese people are becoming more environmentally conscious, and about 35% of them are willing to take actions to reduce their carbon footprints. For example, according to Statista, 81% of Vietnamese people will prefer to purchase or support products that are more biodegradable or eco-friendly.
Hence, with more people who are willing to contribute to the environment, this creates a higher demand for sustainability-related products or services.
Do you have an Innovative GreenTech startup to contribute to our environment together? Sign up to our upcoming CrowdPitch now and see how InnoLab Asia can support you!
References
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Khan, S., Modi, V., & Kumar, V. (2021, October). Green Technology and Sustainability Market Size | Forecast – 2030. Allied Market Research. Reviewed September 15, 2022, from https://www.alliedmarketresearch.com/green-technology-and-sustainability-market-A06033
Lago, C. (2018, August 20). How Vietnam is investing in green technology. CIO.com. Reviewed September 15, 2022, from https://www.cio.com/article/222150/how-vietnam-is-investing-in-green-tech-to-fix-its-coal-problem.html
Nguyen, C., & Nguyen, T. (2022, July 15). Vietnam’s Circular Economy: Decision 687 Development Plan Ratified. Vietnam Briefing. Reviewed September 15, 2022, from https://www.vietnam-briefing.com/news/vietnams-circular-economy-decision-687-development-plan-ratified.html/
Nguyen, M. (2022). Vietnam: intention to buy more biodegradable or eco-friendly products 2021. Statista. Reviewed September 15, 2022, from https://www.statista.com/statistics/1257349/vietnam-intention-to-buy-biodegradable-products/
Pham, C. (2022, June 1). Vietnam Approves Long Term Strategy on Environmental Protection: Decision 450. Vietnam Briefing. Reviewed September 15, 2022, from https://www.vietnam-briefing.com/news/vietnam-approves-long-term-strategy-on-environmental-protection-decision-450.html/
Quy, N. (2020, June 8). Vietnam has a poor environmental scorecard. VnExpress International. Reviewed September 15, 2022, from https://e.vnexpress.net/news/news/vietnam-has-poor-environmental-scorecard-4111982.html
Stapleton, C. (2022, Jan 12). Green Tech Definition. Investopedia. Reviewed September 15, 2022, from https://www.investopedia.com/terms/g/green_tech.asp
Vietnam .:. Sustainable Development Knowledge Platform. (2018). Sustainable Development Goals. Reviewed September 15, 2022, from https://sustainabledevelopment.un.org/memberstates/vietnam
