The Ministry of Natural Resources and Environment is seeking comments on the Draft Decree amending and supplementing a number of articles of Decree No. 06/2022/ND-CP dated January 7, 2022 of the Government regulating the reduction of greenhouse gas (GHG) emissions and protection of the ozone layer.
Preparing for the carbon market
According to the Ministry of Natural Resources and Environment (MONRE), recently, this agency has received a number of recommendations from agencies, organizations, businesses, domestic and international experts proposing to supplement more specific regulations on greenhouse gas inventory, allocation of greenhouse gas emission quotas, carbon credit management and carbon market development, management and elimination of ozone-depleting substances and controlled greenhouse gas substances to improve the effectiveness of state management.
Some recommendations to adjust some regulations to facilitate agencies, organizations and businesses to implement policies to reduce greenhouse gas emissions and protect the ozone layer.
Therefore, according to the Ministry of Natural Resources and Environment, the development of a decree amending and supplementing a number of articles of Decree No. 06 is necessary to effectively implement state management on greenhouse gas emission reduction, carbon market development and ozone layer protection, in line with the socio-economic development situation and international integration, contributing to the goal of achieving net zero emissions by 2050.
In particular, the draft has amended and supplemented regulations to strengthen greenhouse gas inventory work to serve the allocation of greenhouse gas emission quotas to prepare for the carbon market.
Specifically, amend and supplement regulations on greenhouse gas inventory for facilities allocated quotas to participate in the carbon market.
Decree 06 stipulates that relevant specialized agencies under the People's Committees of provinces shall appraise the results of greenhouse gas inventories for all establishments that must conduct inventories. However, the results of greenhouse gas inventories must be improved in terms of accuracy and transparency. International experience shows that establishments allocated greenhouse gas emission quotas must send the results of greenhouse gas inventories to the Government after being appraised by an independent appraisal unit.
Therefore, the Ministry of Natural Resources and Environment proposes that the greenhouse gas inventory results of facilities allocated GHG emission quotas need to be appraised by an independent appraisal unit.
From there, the Draft also amends and supplements regulations on the unit that appraises greenhouse gas inventory results to serve the allocation of greenhouse gas emission quotas and appraises greenhouse gas emission reduction results to create carbon credits.
According to the provisions of Article 14 of Decree No. 06/2022/ND-CP, the appraisal unit is an organization with appraisal capacity recognized by the UNFCCC; or is certified to meet TCVN ISO 14065 standards on requirements for greenhouse gas appraisal and verification organizations; or has technicians certified to complete a course on greenhouse gas inventory according to the provisions of the UNFCCC for the corresponding field.
However, there is currently no domestic unit with appraisal capacity recognized by UNFCCC or certified to TCVN ISO 14065 standard. The number of technicians certified by UNFCCC is still small and basically does not meet future needs. Decree 06 also does not specify in detail the conditions and procedures for submitting documents and announcing appraisal units.
Therefore, the draft proposes to amend and supplement in the direction of: i) Specifying in detail the conditions and implementation procedures for announcing the appraisal unit of greenhouse gas inventory results and greenhouse gas emission reduction results; ii) Adding conditions for the appraisal unit, specifically: “… or an organization with technicians certified to complete a course on greenhouse gas inventory according to the provisions of the United Nations Framework Convention on Climate Change for the corresponding field and certified to TCVN ISO 14064-3 standard on technical regulations and guidelines for appraisal and verification of greenhouse gas certifications”.
Which facilities are allocated greenhouse gas emission quotas?
According to the provisions of Clause 4, Article 7 and Clause 2, Article 12, the establishments specified in Clause 1, Article 5 will be allocated greenhouse gas emission quotas for the period 2026-2030. However, the Ministry of Natural Resources and Environment said that some establishments have not yet provided detailed data to have a basis for allocating greenhouse gas emission quotas.
According to the experience of countries that have operated carbon markets, in the initial stage, the Government only allocated quotas to large emission sectors. In addition, the EU has begun to apply the Carbon Border Adjustment Mechanism (CBAM) to control greenhouse gas emissions and apply carbon taxes on imported goods into the EU including: iron and steel, aluminum, cement, electricity, hydrogen, and fertilizers.
The US also plans to apply the CBAM mechanism to eight export-related items of Vietnam. At the same time, establishments are responsible for submitting periodic greenhouse gas inventory reports every two years. The results of the greenhouse gas inventory are the basis for operating the greenhouse gas emission quota exchange market. Therefore, the time of quota allocation must follow a roadmap consistent with the time when establishments submit greenhouse gas inventory reports.
Therefore, the draft proposes to supplement the quota allocation roadmap, in the first phase, quotas will be allocated to facilities with large emissions in three areas: thermal power, iron and steel production, and cement production. It is expected that about 200 facilities will be allocated quotas in the first phase, accounting for about 45% of the total emissions of facilities required to conduct greenhouse gas audits.
Adding livestock industry to the list of facilities required to inventory greenhouse gases
In this draft, the Ministry of Natural Resources and Environment also added a list of fields and facilities that must inventory greenhouse gases to meet practical requirements.
Recently, the Ministry of Natural Resources and Environment has coordinated with relevant ministries and agencies to develop and submit to the Prime Minister a list of sectors and facilities emitting greenhouse gases that must conduct greenhouse gas inventories.
The list includes facilities that must inventory greenhouse gases in the industry, trade, transportation, construction, natural resources and environment sectors with annual greenhouse gas emissions of 3,000 tons of CO2 equivalent or more; thermal power plants, industrial production facilities, commercial buildings, freight transport companies that consume 1,000 tons of oil equivalent (TOE) or more annually; solid waste treatment facilities with an annual operating capacity of over 65,000 tons.
In the process of reviewing and updating the above list, the Ministry of Agriculture and Rural Development, provinces and centrally run cities proposed to add large-scale livestock facilities (pigs, cows) to the list of facilities required to inventory greenhouse gases. After studying international experience, assessing the current situation in the country and based on the opinions of ministries, branches and localities, it was unanimously proposed to add the livestock industry to the list of facilities required to inventory greenhouse gases .
See the full text of the draft Proposal below:
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