Vietnam Launches Southeast Asia's First Deposit Return Recycling System, PET Bottles Poised for High-Value Recovery

The city of Hue in Vietnam recently launched the first Deposit Return System (DRS) in Southeast Asia. Consumers pay a small deposit (approximately $0.03-0.06) when purchasing beverages, which is refunded upon returning empty bottles. This model, validated in over 40 countries (with a 98% recycling rate in Germany), is being introduced in Southeast Asia for the first time, directly addressing Vietnam’s plastic pollution challenges.​PET bottles and aluminum cans account for 98% of beverage packaging (WWF Vietnam 2024 data), yet they have long been trapped in the dilemma of "inflated recycling rates and low regeneration value."

Zhuansu Vision will conduct a comprehensive analysis from the aspects of the mechanism characteristics of the DRS system, industry impact, policy coordination, technological challenges and opportunities, as well as regional demonstration effects.

1Hue Deposit Refund System (DRS)) Lock PETBottles and aluminum can packaging

The Deposit Return System (DRS) is an environmental economic policy targeting packaging waste. Its core mechanism requires consumers to pay an additional deposit (usually about 10% of the product price) when purchasing bottled or canned beverages, and to reclaim the deposit upon returning the empty containers to designated collection points. This model uses economic incentives to...​Encouraging consumer participation in recycling has effectively improved the recycling rate and quality of packaging materials. More than 40 countries worldwide have implemented DRS systems, with recycling rates exceeding 90% in countries like Norway and Germany.

The pilot project launched in Hue City aims to raise public awareness, especially among young people, about source-separated waste classification and rational consumption, while also improving the recycling rate of plastic packaging, with a focus on promoting plastic recycling and regeneration. The project will test the feasibility of a beverage container deposit return recycling system, summarize experiences and lessons learned, and help reduce plastic waste entering the environment. This system will begin operations on September 20, with collection machines placed at the Faculty of Science of Hue University and the Nera Garden apartment building.

Zhuansu Vision believes that the innovation of the Hue pilot project is reflected in multiple aspects:

• ​​Accurate positioning​Regarding beverage packaging, PET bottles and aluminum cans account for as much as 98% of single-use beverage containers in Vietnam (33% PET bottles, 65% aluminum cans).
• ​​Layout Strategy​The machines are set up at the University of Hue's College of Sciences and Nera Garden Apartment Building, precisely targeting young groups and high-density communities, which have a higher environmental awareness and convenient participation.
• ​​Global Experience Localization​Drawing on international success experiences but adjusted to a model suitable for Vietnam's socio-economic conditions, the deposit is set between 1,000-2,000 Vietnamese Dong (approximately 0.03-0.06 USD), which is consistent with the local residents' consumption level.

2 Profoundly impact various aspects such as recycling models, material requirements, and product design.

The introduction of the DRS system in the plastics industry chain is bringing profound changes across multiple levels, from recycling models and material demand to product design.

The DRS system significantly enhances high-value recycling levels by establishing standardized recycling channels. Previously, although the recycling rates of PET bottles and aluminum cans in Vietnam had reached 35-45% (source: United Nations Environment Programme's Southeast Asia Plastics Circularity Report 2024) and 80% (source: Global Aluminum Association 2024) respectively, most of the recycled materials were downgraded and used to produce low-value products. The packaging collected through the DRS system is characterized by low contamination and high quality, making it very suitable for bottle-to-bottle grade closed-loop recycling, truly achieving the circular regeneration of plastic packaging. This high-value utilization not only enhances economic benefits but also reduces the reliance on virgin plastics.

The promotion of the DRS system directly affects the market demand for virgin plastics and promotes the development of the recycled plastics market. As one of the important regions for global plastic production, Vietnam has large production enterprises such as the Hue Plastics Factory. With the implementation of DRS, the demand for virgin plastics is expected to gradually decrease, thereby stimulating the growth of the recycled plastics market. According to relevant research, an effectively operated DRS system can help reduce 265,000 tons of CO₂ emissions annually. This reduction mainly stems from replacing the high-energy consumption production process of virgin materials, such as the oil extraction and refining involved in the production of virgin PET.

The DRS system also incentivizes producers to implement eco-design from an economic perspective. Producers will be more motivated to engage in environmentally friendly design in order to reduce costs within the DRS system, including: minimizing the use of packaging materials, adopting single materials that are easier to recycle, and avoiding the use of composite materials and labels that are difficult to separate. Such design changes will fundamentally enhance the recyclability of plastic products and gradually build a virtuous cycle system of "design-recycle-reuse."

3 Technical Challenges and Innovation Opportunities

The implementation of the DRS system in Vietnam is not only a revolution in the recycling mechanism, but also creates abundant application scenarios and innovation opportunities for local and international technological development.

The localization upgrade of smart recycling equipment: The deposit return machines piloted in Hue integrate functions such as barcode scanning, automatic compression, and real-time data transmission. These devices directly face challenges unique to Vietnam, such as high temperature and humidity environments, as well as the difficulty in identifying potentially contaminated containers, directly stimulating the market demand for more durable and accurate smart hardware. This opens up a vast space for developing specialized recycling equipment adapted to Southeast Asian climatic conditions.

Triggering a Wave of Digital Traceability Technology Applications: To ensure transparency and efficient operation of the DRS system and to prevent fraud and abuse, advanced digital technologies such as blockchain traceability systems and unique container identification codes have become indispensable. The establishment of the DRS in Vietnam provides a critical implementation scenario for these digital technology solutions, serving not only deposit tracking but also opening new market growth opportunities for local digital technology companies in Vietnam.

Promoting the upgrade and high-value recycling of sorting and processing technology: Although the plastic bottles and aluminum cans collected by the DRS are relatively clean, achieving efficient closed-loop recycling (such as "bottle-to-bottle" recycling) still relies on advanced sorting technologies such as near-infrared (NIR) sorting and artificial intelligence (AI) visual recognition to accurately separate materials of different compositions and colors. The stable and high-quality recyclables produced by the Vietnamese DRS system, such as clean PET bottle flakes, are valuable resources in themselves. This directly stimulates the application and development of high-precision sorting technology and subsequent high-value recycling technology (such as food-grade rPET production technology) in Vietnam, providing local recycling enterprises with the motivation for technological upgrades and a source of high-quality raw materials.

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As the first country in Southeast Asia to implement a nationwide DRS, if Vietnam successfully breaks through, the entire Southeast Asian plastic industry will shift from "passive cleaning" to "active recycling." Particularly, countries like Thailand, Indonesia, and Malaysia also face severe plastic pollution issues and have strong tourism industries, making a clean environment crucial to their economies.

Edited by: Lily