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Vietnam Environment Spotlight - February 2024
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
New set of land and property laws. On 18 January 2024, the National Assembly of Vietnam adopted the long-awaited amended Law on Land in an extraordinary assembly. In doing so, the National Assembly completed the set of three key laws on real estate properties (the two other new laws which were adopted on 27 November late 2023 were the new Law on Real Estate Business and the new Law on Housing. These new laws will become effective on 1 January 2025, except that Articles 190 and 248 of the 2024 Land Law on land reclamation and on amendment to a number of provisions of the Law on Forestry, respectively, will become effective on 1 April 2024).
Hydrogen outlook for 2030. Vietnam has targeted hydrogen production capacity from renewable energy to produce green hydrogen and other processes with carbon capture of 100,000-500,000 tons by 2030 and 10-20 million tons by 2050. The goal is contained in the National Hydrogen Development Strategy by 2030 with a vision to 2050, which has been approved by the Prime Minister (PM) under Decision 165/QD-TTg dated 7 February 2024. Source: VnEconomy
MARKET UPDATES
Green hydrogen with green solutions. Honeywell, a U.S. multi-sector conglomerate, announced that it has signed a Memorandum of Understanding (MoU) with Ho Chi Minh City-based The Green Solutions in implementing the Tra Vinh Green Hydrogen plant, the first such facility in Vietnam. The Green Solutions started construction of the project last March at a total estimated cost of VND8 trillion (US$341 million). Source: The Investor
A rapid stride. Vietnam has successfully executed a landmark transaction, selling 10.3 million tonnes of CO2 emission credits to the World Bank (WB) for nearly VND1.25 trillion (US$52.74 million), as confirmed by the Ministry of Agriculture and Rural Development (MARD) to the PM on 28 December 2023. The carbon credits, derived from the forest regions of north central Vietnam, are part of the Emission Reductions Payment Agreement (ERPA) established on October 2020 between the International Bank for Reconstruction and Development (IBRD), part of the WB, and the MARD. Source: Vietnam Investment Review
Driving carbon market. FPT IS and Carbon EX, a carbon credit trading platform and renewable energy certificate issuer in Japan, signed an MoU to collaborate in providing services and solutions to promote carbon credit projects adhering to global standards such as Verra Carbon Standard, Gold Standard, and J-Credit. Source: Vietnam Investment Review
Green manufacturing. Manufacturers and importers must recycle rubber tires and inner tubes, batteries, lubricant oils, and cartons from 1 January 2024. The recycling requirements are applicable to manufacturers and importers with total revenue in the previous year exceeding VND30 billion (US$1.21 million) and VND20 billion (US$ 0.81 million), respectively. Small and medium-sized enterprises are exempt from these requirements. Source: The Saigon Times
Carbon-neutral toys. Lego is on track to begin trial production at its factory in the southern province of Binh Duong in the second half of 2024, with official production in early 2025. The 44-hectare factory at the Vietnam-Singapore Industrial Park (VSIP) is designed to be Lego’s most sustainable facility to date, supporting the toymaker’s ambition to achieve a 37 per cent cut in absolute global carbon emissions by 2032. Source: The Investor
EV race – the battle for dominance 1. China-invested Vietnam Yadea Electric Motorcycle Company Limited kicked off the construction of a US$100 million electric bike factory in Vietnam’s northern province of Bac Giang. Yadea’s expansion in Vietnam follows the country’s goal of all road traffic being electric-powered. Source: The Investor
EV race – the battle for dominance 2. The world’s biggest EV maker, China’s BYD, will begin Vietnam sales in May. The company is building a US$504 million plant in Thailand, its biggest market outside China, and expects to start production there this year. In future, BYD cars can be imported to Vietnam from Thailand to enjoy the zero import tax applicable to Southeast Asian countries. Source: VN Express International
Pilot project. The Ministry of Industry and Trade, along with relevant agencies, has been tasked with developing a pilot initiative to use the state budget for the exploration, study, and selection of investors for offshore wind power projects. The pilot initiative should also include the approval of project directions and the selection of investors. Source: Hanoi Times
Will it be windy? Vietnam’s central province of Binh Dinh has given Nexif Ratch Energy, a Singapore-based clean energy developer, in-principle approval to conduct wind survey activities onshore. In a document issued in mid-January, the province allowed Nexif Ratch Energy SE Asia Pte. Ltd to install wind measuring equipment to survey wind in an area of 1,368 hectares of Van Canh district. Source: The Investor
Hope for zero waste. BCG Energy of private Vietnamese conglomerate Bamboo Capital group is set to enter the waste-to-power sector with the acquisition of Ho Chi Minh City-based waste treatment firm Tam Sinh Nghia Investment Development JSC. After the acquisition, BCG Energy will build two Tam Sinh Nghia waste-to-power plants in HCMC and the neighbouring province of Long An. Source: The Investor
Biomass. Erex Corporation, a Japanese firm specialising in supplying electricity sourced from biomass, has just unveiled plans for a pioneering 50MW biomass power plant in the central province of Binh Dinh. The project will require an investment of approximately VND2.4 trillion, equivalent to around US$101 million. Source: Vietnam Investment Review
