1 IMPLEMENTATION OF CLEAN DEVELOPMENT MECHANISM IN VIETNAM Nguyen Khac Hieu International Relations Department Ministry of Natural Resources and Environment Fourth Regional Workshop and Training on Capacity Development for the Clean Development Mechanism

2 Contents Overview Major activities Implement CDM and establish the CNA CDM project in Vietnam

3 Overview Vietnam ratified UNFCCC on 16 November Kyoto Protocol (KP): signed on 3 December 1998 and ratified on 25 September Ministry of Natural Resources and Environment (MONRE) is assigned by the Government as a National Authority to implement UNFCCC and KP.

4 Overview The project: “Capacity Development for the Clean Development Mechanism in Viet Nam”, phase 2 was carried out in Viet Nam in 2003 with 6 main tasks. International Cooperation Department (ICD), MONRE is a Executing Agency to coordinate and carry out the project

5 1. Establishment International Cooperation Department, MONRE Foundation: - Official Document No. 502/BTNMT-HTQT dated 24 March Promulgating CNA of Viet Nam at COP 9 of UNFCCC, Milano, Italy, 12/2003 CNA in Viet Nam

6 CNA in Viet Nam (Cont.) 2. Functions and tasks Building national assessment criteria, regulations and guidelines on Clean Development Mechanism (CDM). Assessing CDM projects at the national level. Submitting potential CDM projects to CDM National Executive and Consultative Board (CNECB) for evaluating them. Receiving, assessing and submitting Project Idea Note (PIN) or Project Design Document (PDD) of CDM projects to the Minister of MONRE for issuing a formal letter of endorsement or letter of approval respectively. Providing CDM information to interested investors, related organizations, consultants and public. Managing and co-ordinating CDM activities and investment in Viet Nam.

7 Documents regarding guideline for CDM activities: Documents regarding guideline for CDM activities: a. Document No. 465/BTNMT-HTQT dated 2/3/2003 regarding identification, development and registration of CDM projects b. Document No. 1022/BTNMT-HTQT dated 8/5/2003 to inform: 1. establishment of CDM National Executive and Consultative Board and, 2. prior investment fields and issues for CDM projects in Viet Nam in the next period CNA in Viet Nam (Cont.)

8 Establishment  Decision No. 553/QD-BTNMT dated 29 April 2003  Decision No. 813/QD-BTNMT dated 08 July 2004 CNECB in Viet Nam

9 CNECB in Viet Nam (Cont.) Members of CNECB MONRE (one chairperson, one permanent representative and one 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) Viet Nam Union of Science and Technology Associations (VUSTA)

10 CNECB in Viet Nam (Cont.) Functions and tasks Providing consultation to MONRE on policies related to development, implementation, management of CDM activities in the country. Providing consultation on guidance and assessment for CDM projects in Viet Nam under the Kyoto Protocol and UNFCCC. Annual meetings of CNECB: 2 times, one in April and the other in September.

11 Ministry of Natural Resources and Environment International Cooperation Department - CDM National Authority - CDM National Executive and Consultative Board CDM Secretariat (NOCCOP) Project Developers Energy Technical Expert Group Non-Enegy Technical Expert Group Consultation CDM’s Institutional Arrangement EB

12 Proposed approval procedure for CDM projects in Viet Nam Project Document Vietnamese Opinion + PP OE YES Exclusive Criteria Priority Criteria NO REJECTED YES APPROVED CNA

13 PIN National CDM criteria Endorsement letter PDD CDM criteria Letter of Approval Registration yes No CNA Project Developer CNECB CNA CDM Executive Board No Project Developer Approval Procedure for CDM Project OE

14 Potential CDM projects No Name of ProjectProject Site Emission reductionpotential (Gg CO2) Status 1 RangDong oil field associated gas recovery utilization VungTau City6,740Approval letter 2 3 HoChiMinh /Hanoi Cities landfill gas for electricity generation HCM/Hanoi Cities 3,100 Endorsement letter 4 Reforestation of newly allocated land in A Luoi- North Central Vietnam Thua Thien Hue Province Thuong Ly landfill closure and gas recovery and utilization Hai Phong City64Endorsement letter 6 Thu Duc power plant unit 3 fuel switch from oil to gas HCM City664Under consideration 7 Wind+Diesel hybrid electricity supply system Binh Thuan City 106Under consideration Under consideration Increasing the efficient use of energy in brewery Thanh Hoa province 11 Approval letter

15 Approved CDM Projects 1.To recover and use associated gas at Rang Dong oil well in Vung Tau  Potential reduction of CO2 emission: 6,74 tons during beneficial period (10 years)  Goal: To recover and use associated gas from the production process in the Rang Dong oil well. In the past associated gas was burned that caused a huge amount of CO 2 2. Sample project to increase energy efficiency in Thanh Hoa Beer Company  Goal: To completely change the technology in order to save energy for medium-size beer factory in Thanh Hoa. To reduce the emission of greenhouse gas by increasing energy efficiency during production.  Potential reduction of CO2 emission: tons CO 2

16 Preliminary portfolio of CDM project No Name of projectDeveloperCapacity Expected GHG reduction (KT CO2) 1 Upgrading existing coal fired thermal of Pha Lai power plant Electricity of Vietnam (EVN) 440 MW378/y 2 Wind power plant in Quang Tri Province QuangTri Electricity Company 20 MW129/y 3 Geothermal power plant in QuangNgai Province ORMAT private50 MW310/y 4Dak Pone hydro powerRCEE14 MW40/y 5 Cogeneration for PhongKhe paper village RCEE6.4 MW74/y 6 Rice husk power plant in Tien Giang Area Institute of Energy3 MW56/y

17 Primary portfolio of CDM project (cont’.) No Name of project DeveloperCapacity Expected GHG reduction (KT CO2) 7 Improvement of oil fired boilers in DongNai pulp and paper factory DongNai paper factory 25,000 t paper/y 4.3/y 8 Improvement of energy efficiency in SongDa cement factory SongDa cement factory 85,000 t/y 18.2/y 9 Efficiency of public lighting system in big city Institute of Material Science 100,000 units190/y 10 Advanced sedimentary brick kiln in BacNinh province Institute of Thermal Engineering 400 mill.pieces/y 49/y 11 Reforestation of newly allocated land in ALuoi district SNV Farmer Union of ALuoi 3,000 ha28/y

18 Signing Cooperation Agreement between CNA and JBIC for development of projects within the framework of KP MONRE, 29 Mar 2005

19 Experiences from CNA Strengthening cooperation between CNA and related ministries to facilitate CDM activities. Process quickly work related to CDM but keep within the existing law Obtain maximum possible benefit from participation in the CDM market Accord with Kyoto Protocol and domestic circumstance

20 Next steps for CDM implementation Review existing laws and regulations Develop a suitable legal framework for CDM Develop and submit a Draft Instructions of Vietnamese Government to implement KP and CDM (completed by Nov. 2005) Integrate CDM into existing development strategy and programs Create favorable conditions for foreign investors by approving the amendment and completion of current legal framework to support CDM Encourage participation of foreign investors in CDM projects Strengthen and develop relationship among CNA, CNECB and relevant bodies Advocate for awareness raising Develop a more transparent and effective system for approving CDM projects Strengthen capacity for CNA to promote CDM activities in the country

21 Conclusion  Implementation of CDM projects in Vietnam plays a key role in the sustainable socio-economic development, contribute to the poverty reduction and hunger alleviation and environment protection.  A legal framework for CDM activities is being formed.  Vietnam has created favorable conditions for foreign investors to Vietnam to invest on CDM projects.  Need to establish a CDM Fund to support local CDM activities.  Vietnam has potentials to enter the CDM market.

22 For further information, please contact: CD4CDM Project Office 57 Nguyen Du, Hanoi, Vietnam Tel: Fax: Website:

23 Thank you for your attentions!