Guidelines for identifying green projects, meeting circular economy criteria, and applying ESG standards

The Ministry of Agriculture and Rural Development is seeking public input on a draft Prime Minister’s decision that would guide the identification of green projects, the criteria for meeting circular-economy standards, and the application of environmental, social, and governance (ESG) standards. The draft is intended to provide a legal basis for businesses to access preferential funding to implement green projects, including a policy support mechanism described as 2% per-year interest rate support.

Challenges highlighted in the draft

The Ministry says shifting toward green development—through new production models such as the circular economy and the application of ESG standards—is both a trend and an opportunity for businesses and individuals to grow sustainably, reduce costs, improve competitiveness, access developed markets, and participate in global supply chains. However, it notes that implementation still faces difficulties, particularly in private-sector contexts, including identifying eligible green projects, applying circular criteria across sectors, and adopting ESG frameworks.

Green projects: existing rules, but limited detail

For green projects, the Ministry points to Prime Minister’s Decision No. 21/2025/QĐ-TTg issued on July 4, 2025. The decision regulates environmental criteria and recognizes investments meeting those criteria so they can issue green bonds and receive green credit, with effectiveness from August 2, 2025. The Ministry states that while the decision defines environmental criteria and recognition for green bonds and green credit, it does not yet provide detailed green criteria or a full definition of what constitutes a green project.

Circular economy: legal framework exists, but technical criteria are missing

For circular-economy projects, the draft references the Environmental Protection Law 2020, Decree 08/2022/NĐ-CP, and Decision 222/QĐ-TTg, which sets out the National Action Plan on circular economy through 2035 and identifies sectors and priority projects. The Ministry says that although the overall framework and implementation measures are in place, defining projects that meet circular criteria across sectors requires specific technical criteria that have not yet been issued to guide implementation.

Investment support: no dedicated scheme yet

On investment-support mechanisms, the Ministry notes that there is currently no dedicated scheme to assist investors implementing green projects, projects meeting circular criteria, or ESG-adoption frameworks. While the Environmental Protection Law 2020 and Decree 08/2022 provide for green credit and a roadmap to promote green credit, the concrete support mechanisms have not yet been established.

Proposed criteria system for green, circular, and ESG-aligned projects

Green-project criteria

Under the draft, green-project criteria are built on the Environmental Protection Law and existing regulations to ensure consistency and alignment with international practice. The anticipated list includes about 45 project types across seven key sectors: energy; transportation; construction; water resources; agriculture–forestry–fisheries and biodiversity conservation; processing/manufacturing; and environmental services. The goals and requirements are stated for each project type.

Circular-economy project types

The draft defines three kinds of circular-economy projects:

• Circular Design Projects: apply design and production that reduce extraction and non-renewable resource use, optimize resource efficiency, and save energy.
• Circular Use Projects: apply reuse, repair, refurbishing, repurposing, remanufacturing, rental, and sharing to extend the useful life of materials, equipment, products, goods, and components.
• Resource-Recovery Projects: classify, collect, process, and recycle waste or implement other circular measures to minimize waste and environmental impact.

Areas covered for circular-economy consideration

The draft lists eight major areas for projects to be considered: agriculture–forestry–fisheries; energy; minerals; processing/manufacturing; construction; transportation; commercial/logistics services; and industrial zones and concentrated economic zones tied to specific technical requirements.

ESG framework and disclosure requirements

A notable new feature in the draft is the application of an ESG framework with 52 criteria. Under the ESG reporting framework, the draft sets minimum disclosure expectations by enterprise size:

• Small and medium enterprises (SMEs) must disclose minimum information corresponding to 7/52 criteria for micro-sized enterprises, 10/52 for small enterprises, and 12/52 for medium enterprises.
• Households and individual businesses must meet at least 4/52 criteria.
• Other enterprises must meet at least 40/52 criteria or be encouraged to apply ESG reporting in sustainability reports following international standards.

Resource allocation and financing approach

The draft discusses linking funding and resource allocation to green projects, green transition, and circular-economy efforts. It also addresses classification and financing approaches for green projects in Vietnam, including approaches to access green finance and the role of policy instruments in enabling capital flows toward priority sectors.

Outlook

The draft decision emphasizes the need to clarify definitions and establish a stable legal basis to mobilize capital for green and circular-economy projects. It also highlights that ESG disclosure standards are intended to help attract both public and private finance.