Opportunities for Clean Technologies under CDM in Vietnam

A Hot Tip about Energy in Vietnam

Last updated: 13 Mar 2011

Overview

According to the United Nations Development Program (UNDP), Vietnam is one of the five countries that would be hardest hit by global climate change. Vietnam has actively participated in efforts to reduce greenhouse gas (GHG) emissions and has ratified the Kyoto Protocol (KP). Under the Kyoto Protocol, Vietnam, like other developing countries, enjoys benefits under the Clean Development Mechanism (CDM), which allows industrialized countries with a green house gas reduction commitment (called Annex I Parties) to invest in projects that reduce emissions in developing countries (non Annex I parties) as an alternative to more expensive emission reductions in their own countries. CDM projects include initiatives that use environmentally friendly technology, prove to generate no or little greenhouse gas and are recognized by the International CDM Executive Board (EB). If a project is registered and implemented, EB issues credits called Certified Emission Reduction (CERs, commonly known as carbon credits, where each unit is equivalent to the reduction of one ton of CO2 or its equivalent) to project developers based on the monitored difference between the baseline and the actual emissions. Vietnam is engaged in projects to implement CDM, which rely heavily on the application of clean technologies, especially the renewable energy sector (wind power, solar power, hydro power, biomass, bio-fuels, etc.). Consequently, these CDM projects offer considerable potential for U.S. companies to exploit their competitive edges in this field.

 

This report aims to provide an overview of opportunities in Vietnam for U.S. companies to export “clean technology” products and services for the implementation of CDM projects.

 

Market Demand

Vietnam is one of the countries in the Asia-Pacific region that participates actively in United Nations activities to mitigate the effects of climate change. Vietnam signed the United Nations Framework Convention on Climate Change (UNFCCC) in 1992 and ratified it in 1994. It signed the Kyoto Protocol (KP) in 1998 and ratified it in 2002.

 

The Ministry of Natural Resources and Environment (MONRE) was designated as a National Focal Agency to the UNFCCC and the Designated National Authority (DNA) for the CDM was established in 2003 as a central point in developing CDM projects in the country as well as a liaison between Vietnam and the International CDM Executive Board (EB). In that year, the CDM National Executive and Consultative Board (CNECB) was also formed, including representatives from 12 ministries and governmental agencies and chaired by MONRE, to provide consultation to MONRE on policies related to development, implementation and management of CDM activities in the country, as well as guidance and assessment for CDM projects in Vietnam under the KP and UNFCCC framework.

 

According to UNDP, Vietnam is a country of enormous potential for CDM projects. Since 2003, more than 100 CDM projects have been developed by the DNA. At the 13th International CDM Conference (COP 13) held in Bali, Indonesia in December 2007, MONRE announced that Vietnam expected to receive about US$250 million in 2008-2012 from CDM projects. This means that CDM projects in Vietnam must reduce an additional 40 million tons of CO2 or its equivalents (CO2e) during that period. To fulfill this target, there will be a high demand for the transfer of clean technologies from developed countries into Vietnam.

 

 

By My Tran

Read the full market research report

 


Posted: 28 April 2010, last updated 13 March 2011

See more from Energy in Vietnam

Expert Views    
Oil and Gas Machinery and Service in Vietnam   By U.S. Commercial Service Vietnam
Oil & Gas sector   By UK Trade & Investment
Wind and small-hydro to drive Vietnam's renewables   By Teknotietamys Oy (Techknowledge Ltd.)
Hot Tips    
Opportunities for Clean Technologies under CDM in Vietnam   By U.S. Commercial Service Vietnam