Vietnam Vietnam drafting new governmental decree on GHG reduction

In June 2021, the Ministry of Natural Resources and Environment (MONRE) of Vietnam released the draft Decree on Greenhouse Gas Reduction and Ozone Layer Protection (hereinafter referred to as the draft). The draft consists of 5 chapters, 30 articles and 6 annexes, and stipulates the roadmap and measures to reduce greenhouse gas (GHG) emissions and ozone depleting substances (ODS). The draft decree is expected to enter into force on January 1, 2022, similar to the Law on Environmental Protection of 2020.

The original text of the draft can be downloaded from the following URL
http://chinhphu.vn/portal/page/portal/chinhphu/congdan/DuThaoVanBan?_piref135_27935_135_27927_27927.mode=reply&_piref135_27935_135 _27927_27927.id=4308

 

Scope of Greenhouse Gas Testing

Facilities that emit GHG equivalent to more than 3,000 tons of carbon dioxide (CO2) will be subject to GHG inspections. The following business sectors, as specified in Annex 1 of the draft decree, are to be controlled under the draft:

  • Coal-fired power plants and various industries with annual energy consumption of 1000 TOE or more
  • Cattle barn facilities with more than 500 cattle per year and piggery facilities with more than 3,000 cattle per year
  • Road transportation sector with annual energy consumption of 1000 TOE or more
  • Shopping malls, etc. with annual energy consumption of 1000 TOE or more
  • Solid waste disposal facilities with an annual throughput of 65,000 tons or more

 

Roadmap for Greenhouse Gas Reduction

Regulated facilities are required to implement GHG inspections and reductions according to the following schedule:

  • By the end of 2025: Conduct GHG inspections, and develop and implement GHG reduction plans appropriate to the technical and management conditions of the facilities.
  • From 2026 to 2030: Conduct greenhouse gas inspections according to the greenhouse gas quota allocated by MONRE, and develop and implement GHG reduction plans. In addition, the allocation of GHG emissions and trading of carbon credits will be allowed in the domestic carbon market.

 

Under the proposed decree, new investment projects will be encouraged to apply production technologies with low GHG emissions. Reduction measures of GHG emission specified in the draft decree are as follows:

  • Measures for the management of GHG reduction
  • GHG reduction plans by sector and at the facility level
  • Application of production technologies and services with low GHG emissions
  • Participation in mechanisms and cooperative methods for GHG reduction suitable for Vietnamese laws and international conventions.

 

Establishment of domestic carbon market

Based on the draft, the domestic carbon market will be created in Vietnam. The following are eligible to participate in the domestic carbon market

  • Facilities that are subject to GHG inspection as specified in Annex 1 of the draft Decree
  • Organizations that participate in the mechanism of exchange and supplement of domestic and international carbon credits suitable for Vietnamese laws and international conventions.
  • Other organizations and individuals involved in the allocation of GHG emissions and the investment and trading of carbon credits in the carbon market.