Carbon market necessary to attain GHG reduction targets

There is no denying scientists’ evidence that humankind’s development activities over the years have accelerated the process of climate change. Greenhouse gases have caused global warming, thawing glaciers at both poles and subsequent rising sea levels. Although listed among developing countries, Vietnam emits less greenhouse gases than others, but is still considered one of the five countries that will be most seriously affected by climate change and rising sea levels. Being aware of the adverse impact of climate change, Vietnam signed the United Nations Convention on Climate Change in June 1992 and approved it on November 16, 2002. It also approved the Kyoto Protocol on September 25 2002. However, at the International Scientific Conference on Climate Change in the Polish City of Brosman, although the participating countries were aware of the risk of global warming, they couldn’t reach an agreement to cut down greenhouse gases because they all put their own countries’ interests above all. What they could agree on was the Clean Development Mechanism (CDM) which allows nations with large greenhouse gas emissions to cut them down by investing in environmentally-friendly technologies for countries with lower greenhouse gas emissions. Vietnam, one of these countries, will now have the chance to access clean technologies. The Ministry of Natural Resources and Environment (MONRE) is conducting research on different scenarios of climate change and building a national strategy to deal with the situation. MONRE has also declared a national programme on climate change response. The total capital invested in the programme until…... [read more]

This information was released on November 30 by the auction organizer, PetroVietnam Finance Corporation (PVFC), which said this is the first Clean Development Mechanism (CDM) project that has received such certificates. By the deadline on November 19, PVFC had received 10 letters of interest from some banks and industrial organizations in the European Union and the US, which want to take part in the auction. PVFC is short-listing those who are eligible for the auction. The Clean Development Mechanism is an arrangement under the Kyoto Protocol allowing industrial countries with a greenhouse gas reduction commitment to invest in ventures that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries. Each unit of CERs is equivalent to one tonne of carbon dioxide. Environmental specialists estimate that Vietnam can earn some US$250 million from CDM projects being carried out until 2010. However, due to the strict conditions for CDM registration, the country has now implemented just several CDM projects such as the one in the Rang Dong oil field, a project designed to improve the efficiency of energy use in Thanh Hoa Beer company and projects to collect CH4 gas for electricity generation in Ho Chi Minh City.... [read more]

At the seminar, Director of the Centre of Renewable Energy and Clean Development Mechanisms, Nguyen Duc Cuong introduced mechanisms and policies on renewable energy in Vietnam. The country has potential for this kind of energy, due to economic development, population growth and high speed of urbanisation, the demand for energy increases incessantly. He noted that because of climate change, energy sources of coal and oil are decreasing and it has become more necessary to exploit clean and renewable energy despite the cost. Mr. Cuong suggested rebalancing energy development and economic development objectives because the price of renewable energy is 1.5-2 times higher than traditional energy. Sharing experience in this issue, a representative of Italy’s Ansaldo Sistemi Industriali Company proposed some measures to make the city cleaner, especially with long-term and sustainable sources of energy. The main goal is to strengthen science and technology efficiency to improve life’s quality in urban areas, as well as reduce energy consumption, the representative said.... [read more]

ASEM discusses green growth in Hanoi Vietnamese Deputy Minister of Natural Resources and Environment Tran Hong Ha emphasized this at the closing of the ASEM forum on green growth in Hanoi on October 4. Ha said the role of the governments of Asia-Europe Meeting (ASEM) member countries should be promoted for introducing policies on green growth that comply with the general trends and international institutions. He also proposed an action plan giving top priority to completing global and regional institutions and policies as well as mechanisms to strengthen bilateral and multilateral cooperation related to green growth including a “green climate fund” and a “clean development mechanism”. According to Ha, barriers preventing the popularization and transfer of green technologies among ASEM nations and between ASEM and the rest of the world should be removed. In addition, he said developed ASEM nations should help the less-developed train human resources in green economy in order to achieve the green growth target and sustainable development. The two-day event provided a comprehensive overview of green growth in Asia and Europe with focus on models applied in ASEM member nations, experiences and practical lessons, creating relevant global and regional policies, and measures to boost green growth in ASEM member nations. Presenters at the forum also analysed advantages and disadvantages of countries of different development level in pursuing the development of green growth and green economy.... [read more]

Sharing experience in climate change adaptation An agreement to this effect was signed in Hanoi on December 1 between representatives of the AFD and the Ministry of Finance. Accordingly, the loan will be implemented from the beginning of 2012 to the end of October, 2013. AFD Director Marc Gravellini emphasized that Vietnam is one of the countries most vulnerable to climate change. If the sea water level rises by 1m, about 5 percent of Vietnam’s land will be affected, impacting 11 percent of the Vietnamese population. The loan will give priority to projects on renewable energy, energy conservation, forest management, waste treatment, clean development mechanism, water supply, and natural disaster prevention and mitigation, as well as agricultural production, he said. Over the past years, the AFD has granted technical assistance to help the Vietnamese government carry out projects on energy efficiency and bio-fuel development.... [read more]

Traditional energy resources are becoming exhausted, leading to higher prices and unstable supplies. According to the Ministry of Industry and Trade (MoIT), Vietnam's energy consumption is growing at twice the rate as its GDP, while in developed countries the rate generally stands at single digits. Vietnam currently consumes five times more energy than it did in the 1999-2004 period at from 4.21 million- 19.55 million tonnes of oil, an average annual rise of 11.7 percent. It is predicted that Vietnam will become an energy importing country by 2015. A recent survey conducted by the Vietnam Institute of Economics on the exploitation and use of green energy in Vietnam shows that the country has abundant renewable natural resources such as solar, wind and hydroelectric energy that can replace fossil fuels and reduce impacts on the environment. Ly Ngoc Thang, Deputy Director of the Centre for Renewable Energy and Clean Development Mechanisms under the Energy Institute, says Vietnam has around 2,000-2,500 hours of sun each year, which can produce energy equivalent to that derived from 43.9 million tonnes of oil. The Centre's Director, Nguyen Duc Cuong, claims that Vietnam can annually generate 800-1,400 kwh/m2 of wind power each year on the mainland, 500-1000 kwh/m2 in the coastal, central highland and southern regions, and nearly 500 kwh/m2 in other regions. Around 320 MW of energy can be generated from waste and 100-200 MW from harnessing the tides while geothermal energy can reach more than 340 MW. Sixty percent of the country's energy can…... [read more]

The CPF will purchase carbon credits generated by the World Bank-funded Renewable Energy Development Project (REDP) under the UN’s Clean Development Mechanism. The CPF, with Sweden, Norway and Spain as Buyer Participants, will buy the first three million metric tons of carbon credits generated through small hydropower development under REDP, creating a revenue stream for the projects. The REDP is a US$202 million credit from the International Development Association (IDA), the World Bank Group’s concessional lending window. World Bank Vietnam Country Director Victoria Kwakwa said the finance program demonstrates the relationship between climate change mitigation and renewable energy development. She said she believes the carbon credits will help create a revenue stream that can encourage more private investment in renewable energy. To date, the Vietnam Ministry of Industry and Trade (MoIT) has received around 20 applications to develop small hydropower projects under the REDP. The REDP is expected to add 250 MW installed capacity of renewable energy to the grid, with a total of 965 GWh of electricity per year and also expand local employment opportunities and increase reliability of the electricity supply especially in rural areas. About 15-25 subprojects, which have total investment cost in the range US$5-20 million each, may be financed by the REDP. The program will green Vietnam’s national electricity grid on a commercially sustainable basis by addressing barriers to renewable energy and providing financial support, including carbon revenue provided by the CPF to improve the financial viability of the projects. The REDP could finance an…... [read more]

This information was released at a seminar held in Ho Chi Minh City on July 17, discussing measures for renewable energy development in southern provinces and cities. Ly Ngoc Thang, Deputy Director of the Centre for Renewable Energy and Clean Development Mechanisms under the Energy Institute, said Vietnam will consume seven times more energy next year than in 2010, and is likely to become an importer of coal for energy generation after 2015. He emphasized the need to develop renewable energy sources to gradually replace the use of fossil fuels like coal, oil and gas. It is also essential to promote energy efficiency to ensure national energy security and protect the environment, he added. Other participants suggested that apart from wind energy, Vietnam should focus on other sources of renewable energy, such as solar, biogas and biomass. Currently, HCM City has around 10 million residents who produce between 8,000 – 9,000 tonnes of municipal solid waste (MSW) a day, thus offering an opportunity to generate thermal plant and produce several valuable materials, they said. Nguyen Trung Viet, a climate change expert in HCM City, said MSW can make huge economic benefit if the city pays attention to waste treatment and recycling technology. Each year, HCM City can earn VND1,553 – 2,782 billion from waste recycling, enough to pay for rubbish dumping sites that cost around VND2,208 billion. He called for State incentives to create more favourable conditions for investors in this field.... [read more]

In his recent talks with the Dau Tu (Investment) Review, the Swedish Ambassador to Vietnam, Rolf Bergman mentioned ABB, Ericsson, and Munters Groups as among those companies. These groups are searching for potential partners for projects involving energy efficiency, clean development mechanism (CDM), and purchase of the rights to CO2 emission and technology transfer. They are also eager for the promotion of renewable energy-related solutions applicable for the cement, mechanical engineering, oil refinery, mining and mineral ore processing industries in Vietnam, according to the Ambassador. He also named the Tricorona Company and the Vattenfall Power Consultants which are keen on the provision of technical, management and environment consultancy services. The Elof Hanson, Getinge, ITT Water and Wastewaterm Flexus Bakasystem AB have shown their interest in technologies for the treatment of waste water and solid waste as well as the development of water supply and drainage system in Vietnam. According to Ambassador Bergman, there are Swedish companies which want to engage in raising the people and businesses’ awareness of environmental protection and use of clean technologies in Vietnam. They include Tetra Pak Vietnam, the ICLD, and SkeriNova Holding AB, which showed eagerness to come up with consultancy services, training and technological assistance in the field. For the Swedish companies that have been operating in Vietnam for long like IKEA, UMA, and Hifab International, they have already worked out plans to apply friendly environmental technologies in their production expansion strategies, said the Ambassador to the paper. According to the Ambassador, the Swedish…... [read more]

The debt financing was arranged by the Export and Agency Finance Division, part of Citi’s Global Transaction Services, as Sole Mandated Lead Arranger with a total value of approximately US$470 million. This is the biggest export credit financing for Vietnam to date. The loan capital will cover construction costs for a plant with a capacity of 750MW in the PetroVietnam Nhon Trach Thermal Power Centre in Dong Nai province. Hoang Xuan Quoc, CEO of Nhon Trach 2 Power Joint Stock Company, said the plant is a key element of the national electricity master plan. The Nhon Trach 2 Power Plant will be fuelled by natural gas produced off Vietnam’s southern coast. The plant is environmentally friendly and is being registered as a Clean Development Mechanism (CDM) Project. By March, 2011, electricity generated from this plant will help satisfy the growing demand for power throughout the country and will consolidate PetroVietnam’s position as the second biggest power producer in Vietnam after EVN. The 12-year financing arrangement is guaranteed by the Vietnamese Ministry of Finance and insured by the German export credit agency Euler Hermes Kreditversicherungs AG (“Hermes”) and the Japanese export credit agency Nippon Export and Investment Insurance (“NEXI”).... [read more]

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