Circular Economy in Action: Pioneering Sustainable Cocoa Value Chains in Viet Nam

In a world facing unprecedented environmental pressures, the traditional “take-make-dispose” economic model is reaching its limits. In response, the circular economy has emerged as a transformative alternative, a regenerative system designed to eliminate waste, keep materials in use at their highest value, and restore natural ecosystems.

The European Union (EU) is at the forefront of this global transition. Through the Circular Economy Action Plan, a cornerstone of the European Green Deal, the EU is accelerating the shift toward sustainable production and consumption. By targeting resource-intensive sectors such as food, agriculture, plastics, and packaging, the EU seeks to build resilient value chains that reduce environmental impacts, strengthen economic competitiveness, and empower both producers and consumers.

Viet Nam, with its fast-growing agri-food sector, stands at a critical crossroads. While the country holds strong potential to contribute to sustainable global supply chains, circular economy practices remain at an early stage, particularly among small and medium-sized enterprises (SMEs). Limited awareness, insufficient technical know-how, and restricted access to practical solutions continue to slow the transition from conventional production models.

These challenges are clearly visible in Viet Nam’s cocoa sector. Conventional cocoa production relies heavily on chemical fertilizers and pesticides, contributing to soil degradation, declining biodiversity, and high water consumption. At the same time, large volumes of agricultural waste, especially cocoa shells generated during processing, remain underutilized or discarded, representing both an environmental burden and a missed economic opportunity. Without circular solutions, these practices undermine long-term soil health, resource efficiency, and the sector’s ability to meet rising sustainability expectations in international markets.

Recognizing these interconnected challenges, development organization Helvetas, in partnership with the Community Development Centre and funded by the EU under the SWITCH-Asia Program, is working to bridge the gap between circular economy ambition and practical implementation. Through the Circular Economy Cocoa: From Bean to Bar project, circular economy principles are translated into concrete, on-the-ground solutions—improving production practices, reducing waste, and creating added value along the cocoa value chain. 

By starting with cocoa, one of Viet Nam’s most promising and export-oriented commodities, the project demonstrates how circular approaches can drive environmental sustainability, economic resilience, and inclusive growth at the same time.

A Boutique Origin with Global Potential

Viet Nam’s cocoa sector may be modest in scale, but it is a "hidden gem" in terms of quality. Boasting the high-quality Trinitario hybrid, Vietnamese cocoa is ranked among the top 10% of fine-flavor beans worldwide. This excellence was showcased on the global stage when it was awarded "Best Cocoa in the Asia–Pacific" at the prestigious Salon du Chocolat exhibition in Paris. 

The global cocoa landscape is shifting. As climate change disrupts production in traditional hubs like West Africa—causing prices to triple in recent years—international buyers are urgently seeking stable, high-quality, and ethically sourced alternatives. 

Viet Nam is perfectly positioned to fill this niche as a premium, sustainable supplier.

The Challenge: Beyond the Bean

Despite its prestige, the sector faces a "sustainability gap." Conventional farming often leads to soil degradation and a heavy reliance on chemical inputs. Furthermore, significant value is lost through the underutilization of byproducts (such as cocoa husks and pulp) and inefficient processing and packaging practices. To remain competitive in a "green" global market, the sector must move beyond just selling beans; it must adopt a holistic, regenerative approach.

Pioneering a systemic shift

The Circular Economy Cocoa: From Bean to Bar project (2022–2026) was launched to address these systemic challenges. By targeting 3,500 cocoa farmers and 500 workers in related businesses, the project transforms the entire value chain. Cocoa was selected as the ideal pilot sector because its manageable size allows for a "proof of concept" that can be scaled across Vietnamese agriculture. To achieve this, the project focuses on three transformative pillars:

Building Knowledge and Changing Mindsets

The transition to a circular economy begins with a shift in people’s awareness. 

To date, the project has empowered over 3,400 stakeholders, including enterprise technicians, agri-cooperative members, government extension workers, and individual farmers. 

Through tailored coaching and hands-on training on environment-friendly farming practices, these participants have mastered resource efficiency and waste minimization.

Thousands of farmers are now applying these solutions, resulting in lower production costs, increased household income, and a significant reduction in environmental footprints.

Innovations in the Field: Solutions for a Greener Future

The project has successfully demonstrated nearly 20 circular economy solutions that prove sustainability is also profitable. From transforming agri-waste into bio-products to adopting renewable energy, these models provide a scalable blueprint for the industry.

One of the products developed was a low-cost waste-to-biochar solution, which uses pyrolysis technology to produce eco-energy at the household level.

Thanks to the project, Nguyen Dinh Thien from the Dak Lak province has been able to convert cocoa husks and agricultural wastes into biochar, a natural soil enhancer.

Another solution developed was a waste-to-clean energy system to dry beans using gasification technology. By using agri-byproducts as fuel, the Nhat Tam Agricultural Service Cooperative has been able to reduce the cost of energy by 60%–80%.

“Compared to traditional drying methods, which involved very high costs, heavy labor, and significant material waste, while also polluting the environment with a lot of smoke and dust—this gasifier technology is much better,” said Nguyen Hong Thuong, director of the Nhat Tam Agricultural Service Cooperative. “It emits very little smoke, saves a lot of fuel, and significantly reduces labor.”

The project has also developed waste-to-byproducts solutions. The waste byproducts—from bioplastics made of cocoa shells to biopaper derived from bean husks and coconut-based biodegradable pallets—have been showcased at international exhibitions.

One of the products, NetZero Pallet, is a carbon-negative alternative to traditional wood or plastic pallets. “Each pallet sequesters 34 kilos of CO2—meaning every 1,000 pallets used removes 34 tons of CO2 from the atmosphere,” said Bui Phuong Thao, sustainability director of AirX Carbon, representative of the project consulting team.

Leveraging Investment and Scaling Up

The project’s influence extends far beyond the farm gate. By demonstrating the commercial viability of circularity, it has observed $5.8 million in private investment from 10 leading cocoa companies and processors. 

Furthermore, these circular models are already being replicated in Viet Nam’s coconut, cashew, and pepper sectors, multiplying the project's impact across the national agri-food system.

Helvetas works closely with governmental institutions to ensure these local successes inform national policy. By facilitating public–private dialogues, the project directly supports Viet Nam’s National Strategy on Environmental Protection and the National Green Growth Strategy. These efforts ensure that Vietnamese agriculture meets the increasingly strict environmental and social standards of international export markets, particularly the EU.

The EU cocoa project has demonstrated that the circular economy is not merely an environmental ideal but also a potent driver of economic resilience. By transforming waste into valuable resources and integrating regenerative practices into profitable ventures, the project has laid a clear roadmap for sustainable growth in Viet Nam.

The project’s impact is poised to expand in three directions:

• Enhancing market competitiveness: By adopting zero-waste and traceable production practices, Viet Nam is positioning its cocoa as a premium “green” commodity. This strategic move positions the country to meet the stringent sustainability standards set by the EU, Japan, and the US markets.
• Shaping private sector engagement: The increasing interest from international chocolate manufacturers and agribusinesses will continue to fuel investment in supply chain infrastructure and processing innovation.
• Scaling beyond cocoa: Perhaps the most significant impact of this project lies in its replicability. The circular solutions pioneered here—ranging from biomass energy to agri-waste bioproducts—are currently being scaled up across Viet Nam's agri-food sectors, including coffee, cashew, coconut, and coffee.

This article was first published by SWITCH-Asia on 29 January 2026.