Newsletter
Vietnam Environment Spotlight - October 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.
FRESHFIELDS – THE ROAD TO COP27
The eyes of the international business community will once again be on the United Nations Climate Change Conference, as organisations seek to understand the interplay between climate goals and their own operations. In the run up to COP27, Freshfields will be tracking and reporting on the progress of climate change negotiations and the implications across core industry sectors around the world. Bringing together our experts and leading thinkers from commerce and academia, we will explore what the summit means for business and how you can ensure you stay current and compliant.
MARKET UPDATES
Responsible masters of the universe. Powered by strong economic growth, Vietnam’s PE deal value more than tripled to US$2.1 billion. A key trend amid record deal-making is the accelerating shift to ESG investing, and ESG already has begun to significantly shape the PE segment. Leaders are taking bold steps now to ensure they are on the front line of change. Source: Vietnam Investment Review
Busking for busing…. Hanoi needs US$886 million to replace its 1,100 gasoline-fuelled buses with electric vehicles (EVs) by 2025 to reduce emissions. Transerco, the city bus operator, said the range of EVs is a concern since electric buses could run 250-300 km on a full charge while many of the city’s buses cover more than 300 km in a day. Transerco hopes to operate 225 electric buses by 2025 before considering whether to replace the entire fleet. Source: VN Express International
…successfully. The Asian Development Bank (ADB) mobilised a US$135 million financing package for EV maker VinFast to manufacture Vietnam’s first fully-electric public transport bus fleet and first national EV charging network. Vietnam’s transport sector accounts for 18 per cent of the country's annual greenhouse gas emissions, and its decarbonization, through options like e-mobility, will directly impact the country’s ambition to achieve net zero emissions by 2050. Source: ADB
Ahoy Aha. VinFast and Ahamove Instant Services JSC have jointly launched AhaFast, the first electric bike-based delivery service in Vietnam. Under the newly-signed deal, VinFast will provide electric motorcycles for Ahamove to deploy its delivery service based on the AhaFast technology platform. Ahamove’s goal is to put 10,000 e-bikes into operation by 2025, gradually replacing gasoline-fuelled motorbikes. Source: Vietnam Plus
Battery sapper. As Vietnam’s EV market grows, the demand for batteries and energy storage solutions is accelerating and attracting the attention of many investors. In order to develop the EV industry, the Prime Minister has approved a plan to exploit minerals such as gold, copper, nickel and molybdenum by 2025. Source: Vietnam News
Hybrid gaps. The Vietnam Automobile Manufacturers Association has sought cuts in excise tax and registration fees for hybrid electric vehicles which would stimulate demand and encourage businesses to invest in power generation and charging systems. Earlier this year, the National Assembly cut excise tax for EVs to 3 per cent from 15 per cent for five years and to 11 per cent from 2027. But hybrid cars are not eligible for the incentives, meaning buyers have to pay excise tax of 15 per cent and a registration fee of 10-12 per cent. Source: VN Express International
Oxymorons. Vietnam’s industrial parks are in the process of transitioning to more ecological models, but are struggling due to a lack of regulations on reusing treated waste and wastewater. Amata Industrial Park in Dong Nai is currently transforming into an eco-industrial park (eco-IP) to align with the Global Eco-Industrial Park Programme. The park has worked with the Ministry of Planning and Investment (MPI) to implement a pilot eco-IP model. There are 30 criteria to meet international standards. Source: Vietnam Investment Review
Rolling bandwagons. DEEP C Industrial Zones in Hai Phong will expand quickly as its current supply of industrial land at 1,840 hectares falls short of investor demand. The zone is applying sustainable development criteria set by the United Nations Industrial Development Organisation (UNIDO). DEEP C is one of five industrial parks that the MPI and UNIDO selected to pilot the transition into eco-IPs. Source: The Investor
Mothballs. The Thai Ministry of Energy has announced it would stop work on the long-delayed 1,320 MW thermal power plant project in Quang Tri province. The decision was made after assessing the factors causing obstacles in arranging equity and loans for the project, as well as the implementation of Viet Nam and Thailand’s COP 26 commitments to achieve net zero emissions. The project’s investor is Electricity Generating Authority of Thailand (EGAT). The company was granted an investment licence in 2013 but the project has yet to be implemented. Source: Vietnam Investment Review
Drafting power. Four LNG-to-power projects were added to the draft of Vietnam’s National Power Development Plan VIII (PDP VIII): Thai Binh (1,500 MW) in the north, Nghi Son (1,500 MW) in Thanh Hoa, Quynh Lap (1,500 MW) in Nghe An, and Quang Trach II (1,500 MW) in Quang Binh. Compared with the MOIT’s March 2021 proposal, the source of power from imported LNG has been reduced by 17,000 MW. Source: The Investor
Danish power. Danish CIP Investment Fund has proposed to develop large-scale offshore wind power projects and transmission lines in partnership with Electricity of Vietnam (EVN). CIP currently manages ten funds worth US$19 billion and is developing more than 30 GW of offshore wind power projects in the U.S., the UK, Germany, Australia, Japan, South Korea, and Taiwan. Source: The Investor
Offshore wind-up. EVN has proposed a mechanism to assign state companies for pilot investment in the offshore wind power projects. The reasons advanced are national security, new technology and complex construction. Source: Vietnam Energy
Waste not want not. Dong Nai province plans to invest US$94 million in building a waste-to-power plant in public-private partnership (PPP) format next year. Construction on the 12-hectare plant in Vinh Tan commune will take three years to complete in 2026. The province is also preparing to implement another waste-to-power plant project in Quang Trung commune, worth US$27 million. Source: The Investor
Make space near the vegetables. Investors are ramping up the development of hydrogen to meet rising energy demand in Vietnam. Vietnamese renewable energy developer Green Solutions intends to start selling products from its Tra Vinh green hydrogen facility in 2023. Besides serving the local market, it will export green hydrogen, green ammonia, and green oxygen to Japan, South Korea, Singapore, and Europe. Source: Vietnam Investment Review
Upping the ante. Quang Tri authorities are considering the establishment of a US$7.5 billion green hydrogen centre that will turn the central province into a renewable energy hub. Representatives of the potential investors proposed that Quang Tri considers allowing them to survey and research investment locations for the centre, which will include solar and wind power plants and a hydrogen and ammonia production plant on an area of about 40 hectares. Source: The Investor
Fibre to carbon. The Hau Giang Biomass Energy project, set to become Vietnam's biggest rice husk-to-power plant, is slated to start commercial operation in 2024. The project is expected to promote a circular economic model by using rice husks as fuel for biomass power in Vietnam, as well as to increase farmers' incomes. Source: The Investor
