Supporting Vietnam towards a sustainable green economy

At the Green Economy Forum and Exhibition (GEFE) 2024, Mr. Bruno Jaspaert - Chairman of the European Chamber of Commerce (EuroCham) - in Vietnam presented initiatives to support Vietnam's transition to a green economy...

At the Green Economy Forum and Exhibition (GEFE) 2024, Mr. Bruno Jaspaert - Chairman of the European Chamber of Commerce (EuroCham) - in Vietnam presented initiatives to support Vietnam's transition to a green economy...

Speaking to VnEconomy at the Green Economy Forum and Exhibition (GEFE) 2024 taking place in Ho Chi Minh City, EuroCham Chairman Bruno Jaspaert said that EuroCham has proposed initiatives to support Vietnam's transition to a green economy, especially in the context that Southeast Asian countries do not have a Fair Energy Transition Partnership Agreement (JETP).

According to Mr. Bruno Jaspaert, EuroCham annually publishes a white paper with recommendations from 20 Sector Committees to support Vietnam. “As a bridge between investors’ interests and Vietnam’s development future, especially in the context of the changing global supply chain, we want to support Vietnam’s sustainable development,” Mr. Jaspaert emphasized.

Vietnam - An ideal destination for sustainable supply chains

Vietnam is now an ideal destination for sustainable supply chains. To participate in these supply chains, companies need to adhere to high quality standards, although this may require more time and initial costs.

Mr Bruno also pointed out that while many Vietnamese businesses may achieve quick profits from unsustainable business models, in the long run the benefits will come from investing in quality and proper certification.

In terms of communication, the EuroCham Chairman also noted that success stories from small businesses should be conveyed, instead of focusing only on large corporations. “Small businesses can compete and make a difference in the global supply chain. If Vietnamese companies make efforts to participate in the green supply chain, they will achieve success,” said the EuroCham Chairman.

Many challenges in energy investment

A recent EuroCham survey shows that European investors are very interested in renewable energy, especially wind power and battery storage in Vietnam. However, Vietnam still lacks a suitable legal framework for foreign investors in this field.

Furthermore, the construction of wind power plants in industrial zones in Vietnam is still not feasible, while many other countries have been successful in this field. Therefore, Vietnam needs to find appropriate solutions to overcome this problem.

European investors are now interested in securing 100% green energy and the ability to provide skilled human resources in Vietnam over the next 10 years.

The Chairman of EuroCham Vietnam pointed out two main issues hindering energy investment in Vietnam: energy prices and investment approval processes. Accordingly, although energy prices in Vietnam are low, the approval process is complicated, forcing investors to invest capital without any guarantees.

In addition, the development of offshore wind power in Vietnam still faces many difficulties, especially the unclear licensing process. Without specific regulations, investors will face obstacles in implementing projects.

To overcome this, the EuroCham Chairman suggested that Vietnam adopt the European energy pricing mechanism to meet international standards, but also warned that maintaining low energy prices in the context of sustainable development is a big challenge. “Energy costs are very cheap, which is one of the attractions for FDI in Vietnam. But switching to clean energy is often expensive. How to be cleaner while still keeping prices low to maintain a competitive advantage is a problem for Vietnam.”

Mr. Bruno Jaspaert - Chairman of EuroCham European Chamber of Commerce in Vietnam.

Mr. Bruno Jaspaert cited that when switching to renewable energy, electricity prices in China are 30% more expensive than in Vietnam and 3 times more expensive in Europe. Therefore, he proposed that cooperation between European businesses and Vietnamese state-owned enterprises is necessary, despite cultural differences.

At the same time, the EuroCham Chairman also emphasized the importance of having a clear legal framework for environmental impact assessment for wind power projects. Currently, Vietnamese law does not have specific regulations for energy projects, which makes the deployment of renewable energy difficult. Vietnam needs to build a transparent legal system to attract investment, aiming at sustainable development.

“Although Vietnam has made progress with the approval of the Vietnam Power Development Plan (PDP8), the current pricing model remains unattractive to investors. Vietnam needs to reform its laws, especially in the offshore wind sector, and clarify the licensing process to promote wind power development, aiming for Net Zero by 2050,” the Chairman of EuroCham Vietnam recommended.

The EU - as one of the important trade and investment partners in Vietnam, has recently had certain achievements in green transformation such as the sustainable coffee farming chain of Nestle Group, the Danish LEGO factory in Binh Duong achieving LEED certification (a certificate for green construction projects issued by the US Green Building Council)... And Vietnam still has a lot of potential for growth and needs to continue to transform to a green economy in the coming time.

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Original link: https://vneconomy.vn/chu-tich-eurocham-ho-tro-viet-nam-tien-den-nen-kinh-te-xanh-ben-vung.htm

Source: https://tienphong.vn/chu-tich-eurocham-ho-tro-viet-nam-tien-den-nen-kinh-te-xanh-ben-vung-post1685722.tpo