CDM IMPLEMENTATION IN VIETNAM and OPPORTUNITIES FOR INVESTMENT

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1 The Kyoto Mechanism - Japan Carbon Investors Forum Tokyo, March 2006 CDM IMPLEMENTATION IN VIETNAM and OPPORTUNITIES FOR INVESTMENT Tran Thi Minh Ha, Director General International Cooperation Department - DNA, Ministry of Natural Resources and Environment of Viet Nam

2 Outlines 1. General Information 2. CDM Institutional Structure 3. Procedures for CDM Project Approval 4. CDM Project criteria 5. Viet Nam CDM projects 6. Protential fields for development and implementation of CDM projects in Viet Nam 7. Actual barriers and gaps in the implementation of the CDM activities in Viet Nam 8. Next CDM activities in Viet Nam 9. Conclusions

3 1. General Information The UNFCCC and Kyoto Protocol (KP) were ratified by Vietnam on Nov. 16, 1994 and Sept. 25, 2002 respectively; MONRE was assigned by the Viet Nam Gov. as a national authority for implementetion of the UNFCCC & KP, and National Focal Agency for CDM; ICD (MONRE) was the Designated National Authority for CDM (DNA) => CDM implementation over the country (Official document No. 502/BTN MT-HTQT, 24 March 2003); CDM National Excutive & Consultative Board (CNECB) was established in April 2003, chaired by Director General of ICD/MONRE (Decision No.553/QD-BTNMT, 29 April 2003)

4 1.1. DNA Functions and Responsibilities Building national assessment criteria, regulations, guidelines Assessing CDM projects at the national level Submitting potential projects to CDM National Executive and Consultative Board (CNECB) for evaluation Receiving, assessing and submitting PIN or PDD to the Minister of MONRE for a formal letter of endorsement or approval Ensuring the adequacy of CDM information to interested investors, related organizations, consultants,... Managing and coordinating CDM activities and investment in VN ICD/MONRE also plays a role as a National Agency for managing and coordinating the implementation of all climate change related activities under the UNFCCC and KP in Viet Nam

5 Members: 1.2. CNECB functions and tasks - MONRE (chairperson, permanent representative and secretary) - Ministry of Foreign Affairs (MOFA) - Ministry of Finance (MOF) - Ministry of Planning and Investment (MPI) - Ministry of Trade (MOT) - Ministry of Science and Technology (MOST) - Ministry of Agriculture and Rural Development (MARD) - Ministry of Industry (MOI) - Ministry of Education and Training (MOET) - VN Union of Science & Technology Associations (VUSTA)

6 Functions and tasks: - Consultation to MONRE on policies related to development, implementation & management of CDM activities in the country; - Recommendation on guidance and evaluation for CDM projects in Viet Nam under the KP and UNFCCC CNECB (con d) 3 annual meetings of CNECB: January, April and August

7 2. CDM institutional structure MONRE Report CNECB (Chairman: MONRE) MONRE (3 members) MOT MOST MOFA MOF MPI MARD MOI MOET VUSTA Report DNA: ICD (MONRE) National Expert Team (CD4CDM project) ICD, MONRE Task 1: Public information for rasing CDM awareness Task 2: Capacity Development on CDM for policy makers Task 3: Establishment and capacity development for DNA Task 4: Capacity development for stakeholders relevant to CDM proj. Task 5: Capacity building on CDM research and education Task 6: Creating a pipeline of CDM eligible projects Consultation

8 3. Procedures for CDM project Project Developer Approval PIN OE DNA Project Developer CDM criteria yes Endorsement letter PDD CNECB DNA CDM Executive Board No CDM criteria yes Letter of Approval Registration

9 Exclusive criteria: 4. CDM Project Criteria - Sustainability: development target at the national, provincial level and the sector wide; - Additionality: + environment impacts (GHG emission reduction); + finance (CDM project fund is not ODA) - Feasibility: + Government support + Real results, mesurable, and long term benefits related to the mitigation of climate change

10 4. CDM Project Criteria (cont.) Priority criteria: - Project results contribute sustainable development - Commercial Viability: score consist of two criteria reflecting demand for and supply of each project, respectively, namely: + international demand; and + attractive to investors

11 4.1. Priority Criteria for CDM project in VN Category A. Sustainability Criterion content National Income - Growth national income Economic Generation - CER revenues Sustainability Economic - Technology transfer Externalities - Import Substitution Green House - GHG emission reduction Effect Non GHG Air - Non GHG Air Pollution emission Environmental Pollution - Non GHG water pollution Sustainability Waste - Waste generation rate Ecosystem - % change in forest cover - Soil erosion - Likely effect on biodiversity Poverty - Creation of rural employment eradication - Reduction of poor household Social and Quality of life - People income Institutional - Improving of living conditions Sustainability Readiness of Implementing Agencies - Public sector - Private sector

12 4.2. Priority Criteria for CDM project in VN Category B. Commercial Viability C. Feasibility Criterion content International demand Attractiveness to investors Get strong support of the central and local authorities and be more attractive for investors Having adequate infrastructure and manpower

13 5. Viet Nam CDM projects CDM PDD Projects approved by Viet Nam DNA: 1. Rang Dong Oil Field Associated Gas Recovery and Utilization Project in Ba Ria-Vung Tau province: PDD was developed by VN Oil & Gas Corporation PETROVIETNAM, Japan-Vietnam Petroleum Co., Ltd. and UK CONOCOPHILLIPS GAMA Ltd. PDD was approved by DNA, MONRE on 06/05/2004 and it was registered by EB on 04/02/ The Model Project for Renovation Increasing Efficient Use of Energy in Brewery in Thanh Hoa Province: : PDD was developed by the Hanoi Alcohol Beer and Beverage Corp., Thanh Hoa Beer Joint Stock Co., NEDO and Japan Mayekawa MFG, Co., Ltd. and it was approved by DNA, MONRE on 30/12/2004.

14 5. Viet Nam CDM projects (cont.) 3. Song Con 2 Hydro-electricity Project in Quang Nam province: PDD was developed by Song Con Joint Stock Company, Asia Carbon Viet Nam and Research Center for Energy and Environment of Viet Nam and it was approved by DNA, MONRE on 31 October 2005); 4. Ngoi Duong Hydro-electricity Project in Lao Cai province: PDD was developed by Lao Cai Minerals Company, Asia Carbon Viet Nam and Research Center for Energy and Environment of Viet Nam and it was approved by DNA, MONRE on 31 October 2005

15 5. Viet Nam CDM projects (cont.) CDM PIN approved by Viet Nam DNA: 1. Model Coconut Biodiesel Development. 2. LPG application development for road means of transport. 3. Nghi Yen waste treatment complex in Nghe An province. 4. Nhon Chau wind farm in Binh Dinh province 5. Gas Collection and Power Generation at Khanh Son Landfill, Da Nang City.

16 5. Viet Nam CDM projects (cont.) CDM PDD Projects Submitted to VN DNA for approval: 1. Song Muc Mini Hydro Power Station Rehabilitation Project in Viet Nam: : PDD was developed by Tohoku Electric Power Co., Ltd (Japan) and AGRIMECO (Viet Nam); 2. Anaerobic Wastewater Treatment and Energy Recovery Project at Xa Bang Rubber Factory under Ba Ria Rubber Company, Ba Ria-Vung Tau Province: PDD was developed by Nippon Mining Research & Technology Co. Ltd. (Japan) and Viet Nam General Rubber Corporation.

17 5. Viet Nam CDM projects (cont.) CDM PIN approved by Viet Nam DNA: 1. Model Coconut Biodiesel Development. 2. LPG application development for road means of transport. 3. Nghi Yen waste treatment complex in Nghe An province. 4. Nhon Chau wind farm in Binh Dinh province. 5. Gas Collection and Power Generation at Khanh Son Landfill, Da Nang City.

18 5. Viet Nam CDM projects (cont.) CDM Projects Submitted to Viet Nam DNA: 1. Thu Duc power Plant Unit 3 - Fuel Switch Model Project in Ho Chi Minh City 2. Landfill Closure & Gas Recovery and Utilisation in Haiphong City 3. Landfill Closure and Gas Recovery and Utilisation in Ho Chi Minh City 4. Environmental Forestation in A Luoi District, Thua Thien Hue Province 5. Thanh Hoa Rice Husk Power Plant in Tien Giang Province.

19 CDM Projects under Development (cont.) 1. A Sap Hydro-electricity Project in Thua Thien Hue province 2. Ea Krong Hnang Hydroelectricity Project in Phu Yen province 3. Cha Nay Hydro-electricity Project in Da Nang City 4. Thuong Nhat Hydro-electricity Project in TTHue province 5. Song Bo Hydro-electricity Project in TT Hue province 6. Cu Mot Hydro-electricity Project in Dak Lak province 7. Suoi Tan 1 Hydro-electricity Project in Son La province 8. Dak Pone Hydro-electricity Project in Kon Tum province 9. Wind Power of Industrial Scale, Phuongmai site, BDinh Province

20 CDM Projects under Development (cont.) 10. Advanced Vertical Shaft Brick-Kilns in Haiduong Province 11. Cogeneration Plant for Phongkhe Paper Village, Bacninh prov.; 12. Sap Hydro-electricity Project in Thua Thien Hue province; 13. Rice Husk for Power Generation in Long An Industrial Park; 14. Energy Efficiency Project in Thai Binh Brewery Plant 15. Waste Heat Recovery But Son cement Plant in Hanam Prov.; 16. Methane Recovery from Coal Mine in Quang Ninh province 17. Biogas Project Phase II in all (semi-) ) rural areas of Viet Nam

21 CDM Project Ideas under Development 1. Promote Efficiency and Energy Saving of Uongbi Power Plan 2. Dissemination of Fluid Bed Cement Kiln; 3. Modernization of Cement Sector in Hanoi Area; 4. Energy Saving Feasibility Study of Viet Nam Steel Corp.; 5. Cogeneration Plan of Heat & Electricity in Bienhoa Indus. zone; 6. Energy Saving; 7. Infrastructure Improvement Plan of Nhontrach Industrial Park 8. Effective utilization of associated gas as compressed Nat. gas; 9. Prevention of gasoline vapor emissions in petroleum terminals; 10. Tree Planting Project; 11. Project of Compact lamps, T8 triphosphor fluorescent lamps & electronic control gears at Rangdong electric lamps & Vacuum Flasks Company

22 6. Protential fields for CDM projects in Viet Nam 1. Application of renewable energy sources; 2. Energy efficiency, conservation and saving; 3. Small and medium Hydro power; 4. Fuel switching; 5. CH4 recovery and utilization from waste disposal sites, coal mining and wastewater treatment; 6. Associated gas recovery and utilization by oil production activities; 7. Afforestation and reforestation.

23 7. Barriers and gaps for CDM activities in VN 1. Limited awareness, knowledge of managers,, policy markers, enterprises, public,, private sector, NGOs; 2. Lack of a national education strategy and programme on CDM; 3. Lack of skilled experts & financial resources for CDM implementation; 4. Inadequate, appropriate institutional and legal framework to promote CDM activities; 5. CDM idea is not yet integrated in strategy, work program/plan of concerned Ministries, Agencies and local Authorities; 6. Professional capacity of DNA staff need to be more improved; 7. The cooperation between MONRE, DNA and other related Ministries, Agencies, organizations and private groups needs to be more consolidated and developed.

24 8. Next CDM activities in Viet Nam The PM issued a Directive No. 35/2005/CT-TTg, TTg, 17/10/05 on KP implementation to the UNFCCC in Vietnam. 1. Develop the KP implementation plan for the period of 5YP ( ), specified priority fields based on the National Socio- economic Development Plan of Viet Nam ( ); 2010); 2. Carry out studies on the markets for CER(s); 3. Issue guidance to agencies,, organizations and companies on CDM project development in VN; 4. Integrate CDM issues in implementation of environment inter. conventions on to which VN is a signatory/member; 5. Carry out propaganda and public awareness raising on responsibilities and opportunities for the KP & CDM projects; 6. Revise the related legislation, proposing for supplement in view to promote & facilitate the implementation of CDM activities in VN;

25 8. Next CDM activities (cont.) 7. Develop a "financial mechanism for CDM projects" project, stipulating incentives on tax, interest rate, subsidy for domestic and foreign organizations, investors (incl. private sector) in VN; 8. Develop a plan for capital on CDM projects in the field of energy, industry, transportation, agri-forestry and waste management; 9. Integrate CDM activities into national, sectoral,, local development strategies and plans; 10. Revise & propose the legal supplement, providing incentives and facilitate the participation of project developers/investors in the CDM activities; 11. Improve capacity for DNA staff, CNECB members and related Departments of MARD, MOI, etc; Strengthen cooperation betwen MONRE units - DNA - related Ministries, organizations, institutes Develop the international cooperation plan on CDM.

26 9. Conclusions 1. CDM projects in VN plays an important role in the sustainable socio-economic development, hunger eradication, poverty reduction as well as the career of environmental protection; 2. VN facilitates participation of foreign investors and welcomes them to Viet Nam; 3. A CDM fund supporting for in-country CDM activities need establishing; 4. VN has potential to joint the international CDM Market.

27 Thank you very much for your attention!

Lessons Learned: NAMA development in Vietnam

Lessons Learned: NAMA development in Vietnam Dr. Huynh Thi Lan Huong Director of Climate Change Research Center Institute of Meteorology, Hydrology and Environment Ministry of Natural Resources and Environment,