Businesses are worried about having to pay a trillion-dollar fee.

The Vietnam Beer, Alcohol and Beverage Association (VBA), the Vietnam Plastics Association (VPA) and the Ho Chi Minh City Food and Foodstuff Association (FFA) are expressing concerns about the Draft Decision promulgating the recycling cost norms for a unit volume of products and packaging (abbreviated as Fs).

This norm will be the basis for determining the level of contribution to support recycling and implementing the extended responsibility of manufacturers and importers (abbreviated as EPR).

The draft is being developed by the Ministry of Natural Resources and Environment. If approved, the sanctions will take effect from January 1, 2024.

On July 28, the Vietnam Federation of Commerce and Industry (VCCI) and relevant parties held a second workshop to collect opinions on the draft.

Ms. Chu Thi Van Anh, Vice President of VBA, informed that according to the draft, the Fs of aluminum applied domestically is 1.26 times higher than the average Fs in Western European countries; the Fs of glass is 2.12 times higher. Thus, the proposed Fs in the draft, if issued, will greatly affect the business environment and the "health" of enterprises.

According to calculations, for just the three main types of packaging, paper, plastic and metal, businesses will have to pay an estimated recycling fee of VND6,127 billion/year, not to mention the recycling fee for many other types of packaging and waste products. This is a huge expense, causing many difficulties for businesses and pushing up product prices.

High recycling costs could push up prices for goods to consumers. (Illustration photo).

Ms. Van Anh gave an example, with the proposed Fs level for PET hard plastic bottles, the cost of a 500ml water bottle increases by 61 VND/bottle, equivalent to an increase of 1.62%. That is not to mention cardboard packaging, containers, means of transport,... all of which must pay recycling fees.

Meanwhile, Ms. Huynh Thi My, General Secretary of VPA, informed that in 2022, Vietnam will consume 9.2 million tons of plastic materials in the plastics industry alone, of which packaging accounts for 38%, equivalent to nearly 3.5 million tons. With the Fs fee as proposed by the Ministry of Natural Resources and Environment, the recycling contribution alone accounts for nearly 40% of the business's profits. She suggested that state agencies should review the Fs level to suit the domestic economy.

Mr. Nguyen Hong Uy, representative of the Food and Nutrition Subcommittee of the European Chamber of Commerce in Vietnam (EuroCham), shared that on June 17, the British Prime Minister had to stop issuing a packaging tax. This tax causes a burden of up to 1,035 pounds/household/year (equivalent to 30 million VND).

"To recycle paper, plastic and metal, the estimated cost is up to more than 6,000 billion VND/year, the total EPR will be up to tens of thousands of billions/year, creating a huge burden for businesses and affecting the selling price of products for consumers. The Ministry of Natural Resources and Environment needs to consider a reasonable fee to both protect the environment and develop sustainably for businesses," Mr. Uy suggested.

VCCI Deputy Secretary General, Mr. Dau Anh Tuan, said that this agency, together with associations, businesses, and industries, wishes to share and contribute constructive ideas to have a draft of the most suitable and feasible Fs recycling rate for both the goal of environmental protection and sustainable production and consumption. Without a suitable Fs, it will be impossible to effectively implement EPR.

According to the Law on Environmental Protection, from January 1, 2024, manufacturers and importers must implement EPR. Accordingly, businesses can choose to organize product and packaging recycling or make financial contributions to the Vietnam Environmental Protection Fund to support recycling.

The Government assigned the Ministry of Natural Resources and Environment to issue specific Fs norms for each type of product and packaging with an adjustment cycle of every 3 years.

Up to now, the Ministry of Natural Resources and Environment has drafted a decision and submitted it to the Prime Minister for promulgation of reasonable and valid recycling cost norms for a unit volume of products, packaging and administrative management costs to serve the management, supervision and support of the implementation of waste collection and treatment responsibilities of manufacturers and importers.

Real estate businesses are still worried about tight capital flows . Real estate businesses are concerned that some lending regulations in Circular 06, which is about to take effect, may make it more difficult for businesses to access capital.

Source