Newsletter
Vietnam Environment Spotlight - February 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 AT THE FOREFRONT OF ESG PRACTICE IN VIETNAM
Freshfields successfully hosted a webinar entitled “ESG in Vietnam – Are you ready?” on 23 February 2022. ESG matters are getting more important than ever for businesses around the world, including those in Vietnam. The speakers included London Partner Vanessa Jakovich, and the Vietnam team of Tony Foster, Bui Thanh Tien, Chris Milliken, Nguyen Ngoc Phong and Hoang Hoa. The webinar discussed the most immediate impacts of COP26 for businesses around the world and took a look at how to manage some ESG risks relating to performance of businesses in Vietnam. Please contact Trang Tran at trang.tran@freshfields.com if you are interested in receiving a copy of the presentations.
MARKET UPDATES
Action plan
To help carry out the national green growth strategy, the Ministry of Planning and Investment is preparing a national action plan on green growth for 2021 - 2030 to be submitted to the Prime Minister this April. The action plan drafting board and compilation group have been working together on the approach and orientation for identifying tasks, finding solutions, ensuring feasibility and enabling assessment of the strategy implementation. Source: Vietnam Investment Review
Carbon quotas and trading
Vietnam plans to set up and pilot the operation of a carbon trade exchange from 2025, according to a new Government decree on greenhouse gas (GHG) emissions and ozone layer protection. From now until the end of 2027, the country will put forward regulations on the management of carbon credits, the exchange of GHG emission quotas and carbon credits, and the operation of a carbon credit exchange. The carbon trade exchange is expected to be put into official operation in 2028. Source: Vietnam Investment Review
Measure for measure
Deputy Prime Minister Le Van Thanh has signed Decision No.01/2022/QĐ-TTg on the list of sectors and facilities subject to GHG inventories, effective 18 January 2022.The list includes six sectors - energy, transportation, construction, industry, agriculture, and waste - and hundreds of facilities. The facilities must carry out GHG inventories and provide related information to the Ministry of Natural Resources and Environment (MoNRE) about total energy consumption and capacity, which the MoNRE will gather and report for the Prime Minister. Source: Vietnam Investment Review
Toy story
Danish toy maker LEGO signed an MOU with Vietnam Singapore Industrial Park Joint Venture Company (VSIP) to build a new factory in Vietnam. The facility is planned to be LEGO’s first carbon-neutral factory and will include investments in solar energy generation. LEGO will invest more than US$1 billion in the 44-hectare site in Binh Duong province around 50 km from Ho Chi Minh City and create up to 4,000 jobs over the next 15 years. Source: LEGO
Environmental Empathy Omitted
All National Assembly deputies agreed to reduce the environmental protection tax on jet fuel by half starting from 1 January 2022, as the aviation sector has been severely hit by COVID-19. The tax will be set at VND1,500 per litre from 1 January to 31 December 2022, and increase to VND3,000 from 1 January 2023. This aims to increase State support for aviation enterprises seriously affected by the pandemic. Source: Bizhub
Grade inflation
The MoNRE has for the first time announced provincial environmental protection rankings, based on a set of indicators that includes public satisfaction over the quality of the living environment. Five provinces achieved good results including Ba Ria-Vung Tau, Binh Duong, Da Nang, Quang Ninh, and Tra Vinh, 34 provinces and cities were marked fair, and the remaining 24 were somehow average. Source: Vietnam Net
Go electric
VinFast, the automobile arm of Vingroup, plans to stop making petrol cars by the end of 2022, just two and a half years after the first ones rolled off the company’s northern Vietnam assembly lines, as it aims to ramp up global sales of electric SUVs with plans for EV factories in the U.S. and Germany. Recently, Vinfast has also led a US$80 million funding round in StoreDot, an Israel-based fast charge EV battery startup. Source: Bloomberg and Vietnam Investment Review
Define sustainable
Vingroup has successfully secured a US$400 million loan from international lenders to fund green and sustainable development of Vinfast and other subsidiaries. This is the first sustainable syndicated loan transaction, and the second international sustainable fundraising transaction by Vingroup. Last September, Vinpearl, Vingroup’s tourism and resort unit, had issued US$425 million worth of bonds. Source: Vn Express International
Green support by IFC
The International Finance Corporation (IFC) has committed US$30 million to the construction of a waste-to-energy plant located in Bac Ninh province to support for Vietnam to reach net-zero carbon emissions by 2050. The financing package will go to T&J Green Energy Co., Ltd. – a joint venture between Thuan Thanh Environment JSC and JFE Engineering Corporation. With about 1.4 million people and 16 industrial parks, Bac Ninh generates over 1,000 tonnes of solid waste every day. Source: Vietnam Plus
Windy days
Denmark’s Ørsted Group, the world's largest corporation in the wind power industry, has proposed an offshore wind power plant near Hai Phong, with an estimated investment of US$11.9 to $13.6 billion. Once operational, the power plant will have a total capacity of 3,900 MW. Ørsted set up an office in April in Vietnam, and the Embassy of Denmark also met officials from Hai Phong to introduce Ørsted, Source: Vietnam Net
Sunny days
VinaCapital and Novaland signed an MOU on 7 December 2021 to develop and deploy renewable energy across NovaWorld projects. The two parties will coordinate the research and facilitation of green electricity for residents in Novaland's urban areas on a stable and long-term basis. Last October, SkyX Solar, a rooftop solar power developer and a member of VinaCapital, received strategic investment from EDF Renewables. Source: Vn Express International
More sun in the forecast
AC Energy Corp, the energy unit of the Philippines' Ayala Group, has entered an agreement to acquire 49 per cent of Solar NT, a solar power platform under Thailand-based Super Energy Corp. The transaction will involve acquiring secondary shares for US$165 million. Post-restructuring, Solar NT will own and operate 9 solar power plants across Vietnam, with a total capacity of about 837MW. Source: The Business Times
And suddenly the bad weather disappeared
Sembcorp Utilities, a wholly-owned subsidiary of Sembcorp Industries and BCG Energy, the renewables business of Bamboo Capital Group, inked an agreement for the development of renewable projects in Vietnam in December 2021. Under the collaboration, Sembcorp and BCG Energy will join forces to identify and jointly develop a pipeline of up to 1.5GW of wind and solar projects in Vietnam. Source: Vietnam Investment Review
