The Law on Chemicals 2025, which has been approved by the National Assembly and will officially take effect on January 1, 2026, marks an important turning point in the process of completing the legal framework regulating the chemical industry in Vietnam. The promulgation of this Law not only aims to meet the requirements of sustainable, safe and environmentally friendly development, but also demonstrates the State's strategic orientation in improving the competitiveness of the chemical industry in the context of deep international integration.
In order to guide the Law on Chemicals 2025, the Government has also submitted a Draft Decree detailing and guiding the implementation of a number of articles of the Law on Chemicals on the development of the chemical industry and chemical safety and security (hereinafter referred to as the "Draft Decree") in order to guide, clarify the Law, and at the same time orient the development of the chemical industry in the direction of modernity, safety and sustainability.
"Principles of Green Chemistry" and guidance on application to chemical projects
The principle of green chemistry is a new concept, first mentioned in the Law on Chemicals 2025. According to Clause 1, Article 3 of the Draft Decree and Point d, Clause 2, Article 5 of the Law on Chemicals 2025, this set of principles shapes the necessary conditions in the design process, selection of technological equipment, production processes or decisions related to chemicals in order to reduce or eliminate the use and generation of hazardous chemicals. In order to concretize the above new content, Article 13 of the Draft Decree stipulates 04 obligations of investors and chemical project design consultants to comply with when investing as follows: (i) Waste prevention; (ii) Increase energy efficiency; (iii) Real-time monitoring and analysis; (iv) Minimize the possibility of causing accidents. In the face of the above obligations, enterprises need to apply advanced production technologies and input materials and prioritize the selection of low-energy processes to optimally develop production processes that do not generate waste. In addition, it is necessary to strengthen real-time monitoring and analysis to help businesses promptly detect, control and handle risks arising in the chemical production process.
In addition, the Draft Decree also sets out other incentives, which are not mandatory to be applied based on the conditions and permissibility of enterprises to improve the implementation of green chemistry principles, including: (i) Maximizing atomic savings; (ii) Development of less toxic chemical synthesis processes; (iii) Developing safer products and chemicals; (iv) Safer use of solvents and reaction conditions; (v) Use renewable materials; (vi) Limit derivatives; (vii) Catalysts to increase reaction efficiency; (viii) Use of compostable chemicals and products. The application of these principles in practice will be implemented and guided in more detail by the Ministry of Industry and Trade in the coming time.
Conditions for enjoying special investment incentives and support for key chemical industry sectors
The key chemical industry sector is considered a new strategic step in Vietnam's legislative reform thinking, demonstrating a new vision when prioritizing the development of important fields, in line with international trends and meeting the country's development needs. However, not all projects in the key chemical industry are entitled to special investment incentives or support. According to Article 16 of the Draft Decree, only when the project meets all 02 criteria as follows will it be entitled to special investment incentives and support.
The first criterion is that these projects in the key industrial sector are specified at Points a, b and c, Clause 1, Article 6 of the Law on Chemicals 2025 and disburse at least 1/3 within 03 years from the date of issuance of the Investment Registration Certificate/ Approval for Investment Guidelines/ Decision on Investment Guidelines.
Secondly, the above-mentioned projects must meet the conditions in Clause 2, Article 16 of the Draft Decree, in which the projects must fall into one of the following cases:
Firstly, a chemical project is a project that manufactures medicinal chemical products that are medicinal ingredients with a total investment of a Grade B project according to the criteria for classifying projects under the law on public investment. Pursuant to Clause 2, Article 10 of the Law on Public Investment 2024, the project in this case must have a total investment of between VND 160 billion and less than VND 3,000 billion.
The standing secretariat’s working delegation visits Ca Mau fertilizer plant. Source: Vietnam+
Secondly, chemical projects are basic chemical projects in the key chemical industry; petrochemical products; pharmaceutical chemical products that are raw materials for making health protection foods; hydrogen and ammonia produced with renewable energy sources with a total investment are classified as Grade A projects according to the criteria for classifying projects under the first law private work. According to Clause 2, Article 9 of the Law on Public Investment 2024, the project in the above case must have a total investment of VND 4,600 billion or more.
Thirdly, the project to produce rubber products has a capital scale of VND 10,000 billion, except for tube and tire products, production of high-content fertilizers; investment in chemical industrial parks; investment in chemical works complexes with the main goal of producing chemicals and products of the chemical industry.
The introduction of high standards for investment projects along with other forms of support and incentives shows that Vietnam is always ready to support projects through various forms if businesses have a serious investment commitment and are highly feasible to the project when implemented. This not only reflects the orientation of selecting capable investors, but also contributes to improving the quality of investment capital flows, ensuring sustainable socio-economic efficiency. Maintaining high standards avoids projects that are at risk of pollution, use outdated technology, and do not bring much value to the economy.
Responsibilities in ensuring safety and security in chemical activities in the chemical industry
Within the framework of the Draft Decree, the regulations on ensuring safety and security in chemical activities are completely newly supplemented, focusing on the issue of ensuring safety in chemical activities. In particular, stakeholders in chemical activities must meet 04 requirements, including: (i) Requirements on material and technical foundations; (ii) Ensuring safety in chemical transportation; (iii) Requirements for professional qualifications in chemical activities; (iv) Safety distance. These are considered basic requirements throughout the operation from production and transportation to the commercialization of chemical products.
For requirements on material and technical foundations, enterprises are required to meet additional obligations on personal protective equipment and equipment for responding to chemical incidents that have been issued at chemical establishments. In addition, chemical packaging and labels must be clearly stated with information such as durability to withstand the impact of weather factors, transportation,...
In addition, organizations and individuals producing chemicals must also be ensured by the person in charge of professional responsibility assigned by the enterprise. According to Article 29 of the Law on Chemicals 2025, the professional requirements for chemical safety of each enterprise will be different depending on the function of that enterprise. For example, organizations and individuals engaged in production activities must assign a person in charge of chemical safety with a university degree or higher. However, for business organizations and individuals, the law only requires the person in charge of professional responsibility to have an intermediate or higher qualification. Differences in professional qualification standards are considered and given based on the complexity of each type of chemical enterprise.
Finally, the safety distance condition is mentioned in detail to guide Article 35 of the Law on Chemicals 2025. The safety distance is regulated to determine the responsibility of enterprises to establish the distance from residential areas, public buildings, and other nearby works in order to avoid negative impacts from chemical activities. The positive point in the new regulation is the expansion of management objects when it requires the participation of local management agencies such as provincial People's Committees to suit the multi-sectoral nature.
It can be seen that the Draft Decree guiding the Law on Chemicals 2025 not only plays a role in concretizing the new provisions of the Law, but also represents a strong transformation in management thinking for the chemical industry. The positive points of green chemistry, selective investment incentives, and focus on ensuring safety and security show a clear orientation in building a modern, safe and sustainable chemical industry.
Lawyer Nguyen Nhat Duong - Nguyen Viet Hung
HM&P Law Firm
