Institutional breakthroughs, and particularly legal amendments, are set to take Vietnam’s chemical industry into the future.

Vietnam’s chemical
industry has made strong strides forward over recent years, maintaining stable growth
from a number of large-scale projects coming on stream. The industry’s scale and
pace of development, however, still fall short of its role and potential.6According to the
Ministry of Industry and Trade (MoIT), among the country’s ten largest industries
at Level-2 classification, the chemical industry ranks third, accounting for around
2-5 per cent of total industrial GDP. Its industrial production value has grown
by about 10-15 per cent a year. Several chemical subsectors have largely met domestic
demand – such as fertilizers, plant protection chemicals, tires, paints, and detergents
– and their exports have also grown.

Holding back potential

At the recent “Institutional
breakthroughs as a driver to elevate the chemical industry” seminar, participants
agreed that the industry’s development remains misaligned with its inherent potential.
One of the biggest challenges is its dependence on imports. Many essential chemical
materials and products must still be sourced from overseas, while domestic investment
structures remain out of balance, lacking high value added products and failing
to establish deeply-integrated value chains at the regional and global level.

Mr. Vuong Thanh
Chung, Deputy Director of the Vietnam Chemicals Agency at the MoIT, said the existing
legal framework has become outdated after more than 16 years in place. The Law on
Chemicals 2007 has not kept pace with major changes in the broader legal framework,
sustainability trends, or international commitments and new-generation free trade
agreements Vietnam has joined or signed.

In particular, the
country’s rapid economic and industrial growth has led to a sharp increase in the
production, import, and use of chemicals – both in volume and variety. The number
of chemical enterprises has grown quickly, along with the range of activities and
the volume of chemicals produced, traded, imported, and used, creating pressure
to revise regulations to better reflect real-world practices.

Mr. Nguyen Duc Hoan,
Deputy Director of the Bac Ninh Department of Industry and Trade in Vietnam’s
northern region, noted that awareness at enterprises remains limited – especially
among users of chemicals, who account for up to 90 per cent of entities – but there
are still no specific requirements regarding professional qualifications for staff
in charge. Moreover, frequent personnel changes mean enterprises often lack consistent
access to and understanding of State regulations on chemical activities.

In addition, local
technical infrastructure such as warehousing and production equipment remains insufficient
and technologically weak. State management staff at the provincial and commune level
are thinly stretched and often multitask across sectors, resulting in overlapping
responsibilities and a lack of coordination between agencies. Oversight of chemical
imports and distribution is also increasingly difficult given the growing variety
of chemical types and business models.

From a business
perspective, Ms. Vuong Thi Thuy, Deputy Director of Nippon Paint Vietnam, acknowledged
that although administrative procedures have improved, enterprises still struggle
to fully grasp detailed compliance requirements related to legal application, safety,
and inspection due to a lack of in-depth training and information channels.

Four strategic breakthroughs

To address such
bottlenecks, Mr. Chung said the amended Law on Chemicals was passed on June 14,
2025, by the 15th National Assembly at its ninth session, and focuses on four major
policy pillars to establish a modern and coherent legal framework.

First, it specifies
investment incentives for key chemical fields. Products such as basic chemicals,
petrochemicals, pharmaceuticals, hydrogen, and ammonia produced from renewable energy
will receive special support, providing investors with clearer direction and confidence
for large-scale projects.

Second, it strengthens
the management of specialized chemical projects by introducing stricter requirements
on technology appraisal, safety, and environmental protection from the investment
approval stage. Green chemistry criteria and sustainable development goals are embedded
to ensure projects deliver economic benefits while minimizing health and environmental
risks.

Third, it establishes
lifecycle-based chemical management. Instead of focusing on isolated stages, controls
will span production, import, circulation, storage, transport, and disposal – the
latter being an important step to prevent any leakage of hazardous chemicals into
the environment.

And fourth, it adds
regulations on safety distances and chemical incident prevention and response plans,
addressing risks to public security and social order amid the rapid growth in chemical
volumes and varieties used in industrial production.

To ensure the
Law’s timely and synchronized implementation from January 1, 2026, the MoIT has
led the drafting of decrees detailing provisions and implementation measures. “With
these fundamental innovations, the Law and its guiding documents will establish
a comprehensive and unified legal framework, enabling the chemical industry to fully
play its role as a foundational sector and expand its development space,” Mr. Chung
said.

Mr. Hoan added that
the amended Law will clarify responsibilities between central and local authorities
while promoting digital transformation. A centralized, sector-specific chemical
database will ease staffing pressure at regulators and provide enterprises with
clear benchmarks for investing in compliant storage infrastructure.

Turning policy into reality

For the Law to truly
serve as a catalyst upon taking effect, seminar participants stressed the need for
a decisive implementation roadmap and close coordination between stakeholders.

On the regulatory
side, Mr. Chung said the Vietnam Chemicals Agency is actively advising on decrees
and circulars to avoid legal gaps. Communication, training, and capacity-building
for local Departments of Industry and Trade are also being intensified to ensure
uniform enforcement nationwide.

In Bac Ninh, the
Department plans to organize in-depth training sessions not only for enterprises
but also for commune-level officials. Mr. Hoan said it will coordinate to build
a data-driven management system connected with the MoIT, enabling timely updates
and support for enterprises in fulfilling their reporting obligations.

From the beneficiary
side, Ms. Thuy expressed hope that the amended Law would mark a breakthrough in
lifecycle chemical management aligned with sustainable development and international
integration. She urged authorities to continue streamlining investment procedures
and harmonizing processes between central and local levels, adding that State support
for technology upgrades and policy dissemination would help enterprises reduce compliance
costs and enhance competitiveness.

Experts are confident
that with the enactment of the Law on Chemicals 2025, Vietnam’s chemical industry
will have sufficient space to attract high-quality investment, integrate more deeply
into global value chains, and make a meaningful contribution to the country’s double-digit
economic growth target for the 2026-2030 period.

VET-Song Ha