Newsletter
Vietnam Environment Spotlight - August 2022
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.
LEGAL UPDATES
National Climate Change Strategy to 2050
Deputy Prime Minister Le Van Thanh has signed a decision approving the national climate change strategy to 2050. The strategy sets the overall goals of proactive and effective adapting to, minimizing vulnerability to and damage caused by climate change. Under this strategy, Vietnam will aim to lower its greenhouse gas emissions by 43.5 per cent by 2030 compared to its business-as-usual scenario and achieve net zero by 2050. Source: Vietnam Plus
Action plan on reducing methane emissions
Deputy Prime Minister Le Van Thanh has also signed a decision approving a plan of action on reducing methane emissions by 2030 with the goal of cutting methane emissions by at least 30 per cent from 2020. The action plan targets methane emissions in cultivation, animal husbandry, solid waste management, wastewater treatment, oil and gas exploitation, coal mining and fossil fuel consumption. Source: Vietnam Plus
Vietnam Country Climate and Development Report (CCDR)
The launching workshop on the CCDR was held on 14 July 2022 in Hanoi. The report proposes that Vietnam shift its development paradigm by incorporating two critical pathways – resilient pathway and decarbonizing pathway – that will help the country balance its development goals with increasing climate risks. Source: The World Bank
MARKET UPDATES
Power investment needs
Vietnam will need investment of between US$8 billion and $US14 billion a year through to 2030 to develop new power plants and expand its grid. Vietnam, which pledged last year to become carbon-neutral by 2050, will raise its offshore wind capacity to 7GW by 2030 and to 65GW by 2045, while cutting the proportion of coal in its energy mix. Source: Reuters
No new coal
The Ministry of Industry and Trade wants coal-fired plants with a capacity of 14,120 MW scrapped from electricity production plans for Vietnam to achieve net-zero emissions by 2050. The Ministry also wants to reduce the ratio of coal-fired power sources from 25-31 per cent in 2030 to around 10 per cent in 2045 and no new coal-fired plant should be built after 2030. Source: VN Express International
Blue ammonia
South Korea-based GS Energy had a working session with PetroVietnam on 3 August 2022 and offered to support PetroVietnam and the Vietnamese government to use low-carbon blue ammonia for gradually replacing coal fuel in power generation. Ammonia is a feedstock for hydrogen, a key element that has emerged as a clean fuel in the global push towards carbon neutrality. Source: The Investor
Green hydrogen – Part 1
France-based HDF Energy has entered Vietnam’s fast expanding renewables market via a partnership with Saigon Asset Management Corp. The two sides, under a cooperation deal signed at the French Embassy in Hanoi in July, will join hands to develop a chain of hydrogen and renewable energy projects in Vietnam. Source: The Investor
Green hydrogen – Part 2
Norwegian largest energy group Equinor is keen on cooperating with state-owned PetroVietnam in developing offshore wind and clean energy projects in the renewables-thirsty country. Equinor told PetroVietnam at a meeting in Hanoi that the two sides could soon co-work out specific steps in developing offshore wind farms, and producing hydrogen, ammonia, as well as capturing and storing carbon. Source: The Investor
Green light
Harvest Waste B.V., a Dutch waste management company, has received permission to carry out initial studies for a waste-to-energy project in the Mekong Delta province of Soc Trang. Provincial authorities have given the green light to a partnership between Harvest Waste and Vietnamese firms Pacific Group and Alpha Investment to study the project that will turn residual waste into clean electricity with Dutch technology. Source: The Investor
Green data centre
LOGOS Group, one of Asia Pacific’s leading logistics property groups, is raising more than US$800 million for a green data centre venture that will develop, own, and lease “green certified” data centre assets in the region. The group will commit US$50 million to the venture and will raise about US$800 more from reputable institutional investors. Source: Deal Street Asia and IFC
Gusty wind
U.S.-based energy utility AES Corp plans to develop a major offshore wind farm in Vietnam which is estimated to cost US$13 billion and with a combined capacity of 4,000 MW and would be built off Vietnam's central province of Binh Thuan. AES submitted a letter of intent to develop the project to a Vietnamese energy delegation during an annual Vietnam-U.S. energy security dialogue in Washington last month. Source: VN Express International
Forest biomass
Japanese J-Power has signed an MOU with Vietnam Forestry Corporation (Vinafor) to jointly examine the development of the biomass business in Vietnam, including power generation and fuel production. Vinafor is a state-owned forestry corporation in Vietnam that manages approximately 43,000 hectares of forests and works in the fields of afforestation, manufacturing of industrial wood board and interior/exterior furniture for export, and trading of wood products. Source: J-Power
King of the road
The domestic e-vehicle market in Vietnam is showing signs of taking off, but some foreign manufacturers may be slow to latch onto what could be an attractive market. While automaker VinFast is in the lead in Vietnam currently, other players are still cautious about researching the market and look to be considering their options. Source: Vietnam Investment Review
VinFast announced that it has signed agreements with Credit Suisse (Singapore) Ltd and Citigroup Global Markets Inc. to raise at least US$4 billion to develop an electric vehicle factory in North Carolina, the U.S. VinFast’s factory will cover an area of 800 hectares, with three main areas for electric cars and buses production and assembly, EV batteries production and supporting industries for suppliers. Source: Vietnam Plus
Smart money
Digital payment giant Visa is boosting its contribution to promoting the prosperity of Vietnam towards sustainable development and a digital economy. Visa announced the launch of Eco Benefits in Asia-Pacific which is a suite of sustainability-focused solutions that will help Visa cardholders across the region better understand the environmental impact of their day-to-day payments. Source: Vietnam Investment Review
Green-shifted funds
EVN Finance has signed deals for a VND1,725 billion (US$75 million) bond issuance that will mark Vietnam’s inaugural onshore, internationally verified green bonds in local currency. Green bonds facilitate the borrowing of capital for environmentally-friendly, low carbon economy projects. The deals signed by EVN Finance include one with GuarantCo to provide a VND1,150 billion (US$50 million) partial credit guarantee to support this EVN Finance bond issuance. It is the first-ever partially guaranteed corporate bond that has attracted institutional investors in Vietnam, including Canada’s Manulife and U.S.-based AIA. Source: The Investor
Cut extension
Vietnam's national assembly approved a plan to cut the environment tax on fuel by half for the second time in three months as soaring energy prices put pressure on inflation. The extended cut, which will apply from 11 July to the end of the year, aims to help Vietnam weather the negative impacts of soaring costs of transportation on the economy. Source: Nikkei Asia
Indicator
The Ministry of Planning and Investment (MPI) has called for the implementation of an industrial environmental index in Vietnam. The establishment of environmental standards in more than 400 industrial parks and 18 economic zones across the country will play a significant role in resolving environmental issues, reducing waste and achieving sustainable development. The MPI had been gathering data and feedback in preparation to set up Vietnam's industrial environmental standards. Source: Bizhub
