Briefing
Vietnam Environment Spotlight - September 2023
Freshfields' Vietnam Environment Spotlight keeps you up-to-date with the key business and legal developments in this sector. Please contact us if you would also like to receive our Vietnam M&A Spotlight, Vietnam Infrastructure Spotlight or Vietnam Competition Law Spotlight.
MARKET UPDATES
National energy master plan. Deputy Prime Minister Tran Hong Ha has signed a decision to approve the national energy master plan for the 2021-2030 period, with a vision to 2050. The plan sets a target for the share of renewable energy in the total primary energy to be 15-20 per cent by 2030 and about 80-85 per cent by 2050. Source: Vietnam Investment Review
Carbon market development project. Vietnam is currently devising a project to develop a domestic carbon market, focusing on the mandatory trading of GHG emissions quotas for industries and businesses in the domestic market, while also considering international market integration. Source: Vietnam Plus
ESG fintech. Vietnam’s Bamboo Capital Group signed a partnership agreement last month with STACS, an environmental, social, and governance (ESG) fintech firm headquartered in Singapore. Under the agreement, Bamboo Capital will be the first Vietnamese company to utilise the ESGpedia digital platform developed by STACS, streamlining their ESG reporting needs. Source: Vietnam Investment Review
Anyone and anywhere? John Cockerill, a Belgium-based provider of large-scale tech solutions, has asked Vietnam’s Ministry of Finance (MoF) to help find partners to build a hydrogen factory in Vietnam. He also asked for help finding a suitable project location, such as one close to a deep-water seaport. Source: The Investor
Found someone. Climate Fund Managers (CFM), based in the Netherlands, has commenced strategic cooperation with Vietnam’s The Green Solutions (TGS) to promote the hydrogen industry in Vietnam. In March, TGS began constructing the first Vietnamese hydrogen plant in the Mekong Delta province of Tra Vinh, with an estimated investment of VND 8 trillion (US$341 million). Source: The Investor
Road race. Vietnam’s emergence as a major electric vehicle (EV) market in Southeast Asia is reflected in the rush of new models being introduced by leading automakers. Just two days after Vietnam’s leading EV maker VinFast broke ground on its US$4 billion facility in North Carolina, BMW and Hyundai Motor unveiled their first EVs for the Vietnamese market. Source: The Investor
With EV battery ATMs. Indonesian ride-hailer Gojek will team up with Selex, a Vietnamese startup which makes EVs and battery networks already used by Grab and Lazada. Under the agreement, Gojek drivers using Selex bikes will have home chargers and free access to Selex's "battery ATMs" or automated lockers where they swap out depleted batteries for fresh ones. Source: Nikkei Asia
On the bumpy road. Despite Vietnamese conglomerate Vingroup’s big bet on the global shift to EVs through VinFast, significant challenges, including profit generation, remain. Source: Nikkei Asia
Budget. The financial requirements to implement climate change response targets in Vietnam seem enormous. To effectively respond to climate change by 2040, Vietnam will need approximately US$400 billion, while the state budget is only anticipated to provide approximately US$130 billion. Source: Vietnam Investment Review
Fee for emissions. The MoF has initiated a public consultation process for a draft decree aimed at levying an environmental protection fee for emissions. Initially, the fee will be applied to entities discharging pollutants, notably businesses involved in steel production, metallurgy, inorganic chemical manufacturing, inorganic fertiliser production, chemical-based plant protection products, oil refining, waste recycling, hazardous waste treatment, thermal power, and cement production. Source: Vietnam Investment Review
Fee for mineral exploitation. The Government has issued Decree 27/2023/ND-CP regulating environmental protection fees for mineral exploitation. The document, issued on 31 May 2023, regulates those subject to the fees, fee payers, fee collectors, the cases entitled to exemption, and fee levels, among others. Accordingly, environmental protection fees are imposed on the exploitation of crude oil, natural gas, and coal gas, along with metallic and non-metallic minerals stipulated in the fee table accompanying the decree. Source: Vietnam Plus
Green power. The Ministry of Industry and Trade (MoIT) is currently gathering data for a draft, expected in November, on the best approach to building a new pricing structure for solar and wind power. According to the draft, the solar power price will be determined based on the intensity of sunlight in each region, with the northern price bracket remaining higher to stimulate investment. Source: Vietnam Investment Review
Hydro. Germany's KfW Development Bank and Electricity of Vietnam (EVN) have discussed and agreed that the loan arrangement for the Tri An hydropower plant expansion would be signed in November. This would make it the first EVN project to be granted non-government-guaranteed loans from KfW. Source: Bizhub
Wind. The Petrovietnam Technical Services Corporation (PTSC) and its Singaporean partner, Sembcorp Utilities Pte Ltd, have been granted a survey license and a letter of content to carry out the steps related to a project on developing offshore renewable energy in Vietnam and exporting clean electricity to Singapore. With this license, PTSC is currently the first and only investor in Vietnam to have been permitted by the Ministry of Natural Resources and Environment (MoNRE) to monitor, investigate, survey and assess marine resources to develop offshore wind power. Source: Vietnam Plus
Biomass. Japanese renewable energy firm Erex Co. Ltd. plans to build a 50MW biomass power plant in the northern mountainous province of Bac Kan. The development follows Erex’s plans to conduct similar projects in the neighboring provinces of Yen Bai and Lao Cai in an effort to reduce carbon emissions and develop sustainable energy. Source: The Investor
