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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

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Contents OverviewMajor activitiesImplement CDM and establish the CNACDM project in Vietnam

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Overview

Vietnam ratified UNFCCC on 16 November 1994.

Kyoto Protocol (KP): signed on 3 December 1998 and ratified on 25 September 2002.

•Ministry of Natural Resources and Environment (MONRE) is assigned by the Government as a National Authority to implement UNFCCC and KP.

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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

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1. EstablishmentInternational Cooperation Department, MONRE Foundation: - Official Document No. 502/BTNMT-HTQT dated 24 March 2003

- Promulgating CNA of Viet Nam at COP 9 of UNFCCC, Milano, Italy, 12/2003

CNA in Viet Nam

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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.

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Documents regarding guideline for CDM activitiesDocuments regarding guideline for CDM activities::

a.a. Document No. 465/BTNMT-HTQT dated 2/3/2003 Document No. 465/BTNMT-HTQT dated 2/3/2003

regarding identification, development and regarding identification, development and

registration of CDM projectsregistration of CDM projects

b. Document No. 1022/BTNMT-HTQT dated 8/5/2003 b. Document No. 1022/BTNMT-HTQT dated 8/5/2003

to inform: 1. establishment of CDM National to inform: 1. establishment of CDM National

Executive and Consultative Board and, 2. prior Executive and Consultative Board and, 2. prior

investment fields and issues for CDM projects in investment fields and issues for CDM projects in

Viet Nam in the next periodViet Nam in the next period

CNA in Viet Nam (Cont.)

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Establishment

Decision No. 553/QD-BTNMT dated 29 April 2003Decision No. 813/QD-BTNMT dated 08 July 2004

CNECB in Viet Nam

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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)

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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.

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Ministry of Natural Resources and EnvironmentMinistry of Natural Resources and Environment

International Cooperation Department - CDM National Authority -

CDM National Executive and Consultative Board

CDM Secretariat(NOCCOP)

Project Developers

Energy TechnicalExpert Group

Non-Enegy TechnicalExpert Group

Consultation

CDM’s Institutional ArrangementCDM’s Institutional Arrangement

EB

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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

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PIN

National CDM criteria

Endorsement letter

PDD

CDM criteria

Letter of Approval

Registration

yes

yes

No

CNA

Project Developer

CNECB

CNA

CDM Executive Board

No

Project Developer

Approval Procedure for CDM ProjectApproval Procedure for CDM Project

OE

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Potential CDM projects

No Name of Project Project Site Emission reductionpotential

(Gg CO2) Status

1 RangDong oil field associated gas recovery utilization

VungTau City 6,740 Approval letter

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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

192

5 Thuong Ly landfill closure and gas recovery and utilization

Hai Phong City 64 Endorsement letter

6 Thu Duc power plant unit 3 fuel switch from oil to gas

HCM City 664 Under consideration

7 Wind+Diesel hybrid electricity supply system

Binh Thuan City

106 Under consideration

Under consideration

Increasing the efficient use of energy in brewery

Thanh Hoa province

11 Approval letter

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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 CO2

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: 100.476 tons CO2

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Preliminary portfolio of CDM projectPreliminary portfolio of CDM project

No Name of project Developer CapacityExpected GHG

reduction (KT CO2)

1Upgrading existing coal fired thermal of Pha Lai power plant

Electricity of Vietnam (EVN)

440 MW 378/y

2Wind power plant in Quang Tri Province

QuangTri Electricity Company

20 MW 129/y

3Geothermal power plant in QuangNgai Province

ORMAT private 50 MW 310/y

4 Dak Pone hydro power RCEE 14 MW 40/y

5Cogeneration for PhongKhe paper village

RCEE 6.4 MW 74/y

6Rice husk power plant in Tien Giang Area

Institute of Energy 3 MW 56/y

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Primary portfolio of CDM project (cont’.)Primary portfolio of CDM project (cont’.)

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Name of projectDeveloper Capacity

Expected GHG reduction (KT CO2)

7Improvement of oil fired boilers in DongNai pulp and paper factory

DongNai paper factory

25,000 t paper/y

4.3/y

8Improvement of energy efficiency in SongDa cement factory

SongDa cement factory

85,000t/y

18.2/y

9Efficiency of public lighting system in big city

Institute of Material Science

100,000 units 190/y

10Advanced sedimentary brick kiln in BacNinh province

Institute of Thermal

Engineering

400 mill.pieces/y

49/y

11Reforestation of newly allocated land in ALuoi district

SNVFarmer Union

of ALuoi3,000 ha 28/y

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Signing Cooperation Agreement between CNA and JBIC for

development of projects within the framework of KP

MONRE, 29 Mar 2005

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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

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Next steps for CDM implementation

Review existing laws and regulationsDevelop a suitable legal framework for CDMDevelop 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 CDMEncourage participation of foreign investors in CDM projectsStrengthen and develop relationship among CNA, CNECB and relevant bodiesAdvocate for awareness raisingDevelop a more transparent and effective system for approving CDM projectsStrengthen capacity for CNA to promote CDM activities in the country

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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.

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For further information, please contact:CD4CDM Project Office

57 Nguyen Du, Hanoi, VietnamTel: 844 8228974 - Fax: 844 8263847

Email: vnccoffice@fpt.vnWebsite: www.noccop.org.vn

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Thank you for your attentions!