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Carbon pricing a low-cost solution to reduce GHG emissions in Việt Nam: official




A thermal power plant in Việt Nam. It is necessary to implement carbon pricing in Việt Nam to achieve the GHG reduction goal. VNA/ Photo

In a recent interview with Sài Gòn Giải Phóng (Liberated Sài Gòn) newspaper, head of the Climate Change Department under the Ministry of Natural Resources and Environment Tăng Thế Cường talks about the potential of implementing carbon pricing in Việt Nam in its efforts to reduce greenhouse gas emissions.

Could you give an overview of the carbon credit market and how the Vietnamese economy can benefit from it?

Carbon pricing is considered one of the important tools contributing to the reduction of greenhouse gas emissions. It can include a carbon tax, carbon market, and a mechanism to exchange carbon credits.

So far, 46 countries and 35 territories have applied carbon pricing with the participation of tens of thousands of large corporations and enterprises. The revenue gained from this in 2020 was up to about US$50 billion with about 13 billion tonnes of CO2, equivalent to 23 per cent of total global emissions being managed.

Việt Nam is a country with great potential for the development of carbon pricing tools, especially the development of the domestic carbon market. The Law on Environmental Protection 2020 has regulated the development of the carbon market, including activities of exchanging greenhouse gas emission quotas and carbon credits.

Enterprises will be allocated greenhouse gas emission quotas, and be entitled to exchange, buy and sell greenhouse gas emission quotas and carbon credits on the domestic carbon market.

Head of the Climate Change Department under the Ministry of Natural Resources and Environment Tăng Thế Cường. VNA/ Photo

Are the authorities and businesses interested in this?

With the support of the World Bank (WB), for the 2015-2020 period, Việt Nam has participated in the Partnership for Market Readiness (PMR). The PMR project has proposed policies, a roadmap for the formation of carbon pricing tools, and implemented capacity building activities for officials from relevant state management agencies and some enterprises in the steel and waste sectors. Currently, Việt Nam is preparing to participate in the Partnership for Market Implementation (PMI).

Việt Nam has also had experience in implementing a number of mechanisms for exchanging carbon credits such as the clean development mechanism (CDM) within the framework of the Kyoto Protocol and the Joint Crediting Mechanism (JCM) within the framework of cooperation on low carbon growth between Japan and Việt Nam. Nearly 300 CDM programmes and projects have been registered and implemented in Việt Nam.

However, the number of staff in regulatory agencies and businesses who have professional knowledge of the carbon market is still limited. To implement the carbon market in Việt Nam, it is necessary to step up training, capacity building and communication.

What needs to be done in terms of regulations to take advantage of the potential of carbon credit trading?

According to Decree No. 06/2022/NĐ-CP stipulating mitigation of greenhouse gas emissions and protection of the ozone layer, the carbon market development roadmap has two phases.

During the first phase from now to 2027, Việt Nam will focus on formulating carbon credit management regulations, GHG emission quota exchange and carbon credits as well as formulate operation rules of the carbon trade exchange (CTX). It will also experiment with carbon exchange and offsetting mechanisms in potential sectors and provide guidance on operation of domestic and international carbon exchange and offsetting mechanisms in accordance with law and the international treaties to which Việt Nam is a signatory.

During this period, Việt Nam will also establish and organise trial operation of the CTX from 2025, and carry out activities to improve capacity and raise awareness about carbon market development.

The second phase from 2028 onwards, Việt Nam will organise official operation of the CTX and  have carbon credit connected and exchanged between domestic, regional and global carbon markets.

Some environmentalists fear that allowing companies to buy emissions licence and carbon credits will facilitate increased pollution, while Việt Nam has pledged to achieve net emissions to zero by 2050. What are your thoughts?

I think the opposite way. The development of the carbon market in our country will contribute to achieving the goal of having net zero emissions by 2050, not hindering it.

To achieve net zero emissions by 2050, many measures need to be implemented synchronously, from greenhouse gas emission reduction activities, energy transition, implementation of carbon credit exchange and offset mechanisms as well as carbon credits.

Decree 06/2022/NĐ-CP stipulates that GHG-emitting facilities that must carry out GHG inventory include facilities with annual GHG emissions of 3,000 tonnes of CO2 equivalent or more or thermal power plants, industrial production facilities with total annual energy consumption of 1,000 tonnes of oil equivalent (TOE) or more.

One of the regulations stipulated in the decree is that facilities may offset carbon credits from projects under the carbon exchange and balancing mechanisms against GHG emissions exceeding the GHG emission quotas allocated in the same commitment period. The amount of carbon credits for offsetting must not exceed 10 per cent of the total GHG emission quota allocated to the facilities.

This helps enterprises maintain their production and business plans when they cannot immediately apply emission reduction measures and encourage enterprises that are not subject to emission quotas to generate carbon credits.

The development of the carbon market in Việt Nam will help realise the emissions reduction target with low costs for businesses as well as promote the development of low-emission technologies.



Vietnam among world’s earliest in banking digital transformation: forum

Vietnamese banks are among the earliest in the world to make the digital transformation, experts have said.



Speaking at the Financial Services – Retail Banking Forum in Ho Chi Minh City last week, Vu Viet Ngoan, former chairman of the National Financial Supervisory Commission, said the habit of using digital products had become more prevalent than ever in Vietnam.

More than 30% of the population uses banking apps, second globally only after China (41%), according to Ngoan.

Vietnam’s banking and financial sectors would continue to play a key role in establishing a “fully digitised, human-centred system”.

He also pointed out that the digital transformation in the country would be an important process of how banks and financial institutions analyse, interact and satisfy their customers.

The government has set a target of increasing financial inclusion to cover more than 80% of the adult population by 2025.

Phan Thanh Duc, dean of the management information system faculty at the State Bank of Vietnam’s (SBV) Banking Academy, said Vietnam had recorded a surge in digital payment everywhere from online marketplaces to small convenience stores and even vegetable and fruit vendors.

Le Duc Anh, director of the Ministry of Industry and Trade’s Centre for Information and Digital Technology, pointed out that technologies such as blockchain, AI, cloud computing, machine learning, and customer data collection, management and analysis were being adopted.

The banking sector had invested over 15 trillion VND (639.22 million USD) in digital transformation as of the end of last year, according to a report by the SBV.

Digital payments have been growing at 40% for the last four years, one of the world’s fastest digital transformation rates.

According to the report, more than 95% of Vietnamese banks have a digital transformation strategy.

Around 90% of banking transactions are handled through digital channels with 74.6% of adults having a bank account.

As of March around 3.71 million mobile money (or mobile payment) accounts had been opened, over 70% in rural, remote and disadvantaged regions across the country.

Non-cash payments have also seen significant growth, with 82 credit institutions offering internet-based payment services and 51 offering mobile payment services as of the end of last year.

There are 48 licensed intermediary payment organisations.

Digital transformation has helped banks bring down the cost-to-income ratio to 30%, on par with regional and international standards.


But experts say the legal framework for digital financial services is inadequate. 

It is vital to improve institutional frameworks and upgrading infrastructure, they say.

The lack of human resources with up-to-date skills is another major challenge to digital transformation, they warn.

Organised along with the forum was a fair introducing the advancements needed for the financial industry’s digital transformation.

The event was hosted by the Vietnam Association of Securities Business, the Vietnam Digital Communications Association, and the International Data Group.

Source: Nhân Dân


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Vietnam’s first unicorn VNG reports VND1,500 bln after-tax loss in 2022

Vietnamese tech giant VNG Corporation recorded an audited after-tax loss of VND1,534 billion, an increase of VND220 billion compared to its independent report.



The fact that the unicorn recorded more expenditures connected to taxes, intangible fixed assets, and allowance for financial investment activities led to the greater loss after taxes that the company experienced.

VNG aimed for a revenue of VND 10,178 billion in 2022 and anticipated a loss of VND993 billion after accounting for taxes. Therefore, the management unit of Zalo has merely met about 77% of the revenue plan, and the loss after taxes surpasses the projections.

The company recorded a loss of more than VND90 billion after taxes for the first quarter of 2023, with a net loss of more than VND40 billion during the same time period. The increase in net revenue to 1,852 billion Vietnamese Dong was 11% more than the same time the previous year.

The majority of the reason for VNG’s loss in the first quarter of 2023 stems from the fact that the firm is still under pressure from huge operational expenditures. The selling expenses for the company totaled VND544 billion, and the administrative expenses totaled VND337 billion. On the other hand, as of the end of March 2023, the total amount of the company’s undistributed profit after taxes amounted to VND 5,052 billion.

VNZ shares have been subject to trading restrictions since May 25 on the Hanoi Stock Exchange. This is because the company was late in filing its audited financial accounts for 2022 by more than 45 days, which is in violation of the laws. The trading of shares will take place solely on Fridays.

With a price of VND 771,900 per share as of the market’s close on May 29, VNZ continues to be the most expensive stock on the stock exchange.


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India car rental app Zoomcar leaves Vietnam after 1.5 years

India’s car rental app Zoomcar will leave Vietnam from end-May, 1.5 years after its debut in the Southeast Asian country in October 2021, the business announced Tuesday.



For customers, the app stops service from May 24, and will serve any bookings dated before May 24. Zoomcar will fulfill its obligations of payments to car owners normally until June 30.

In Vietnam, Zoomcar initially operated in Ho Chi Minh City and had plans to expand to Hanoi and Danang in 2023, as part of its target to become the biggest car rental service in Vietnam, said Zoomcar Vietnam CEO Kiet Pham. Vietnam’s car rental market, with a compound annual growth rate (CAGR) of 14%, can reach $884 million in 2027, he added.

The business attributed the decision to the market dynamics and projected complicated developments.

The car rental market in Vietnam has recently witnessed many new players, leading to fierce competition.

In March, Pham Nhat Vuong, chairman of Vietnam’s largest private conglomerate Vingroup, set up a new company, named GSM (Green-Smart-Mobility) JSC, offering electric car and motorbike rental and taxi services. It is the first green and integrated transport service model deployed in the world to popularize an electrified mobility experience, according to the company.

In December 2021, MoMo, a top e-wallet app in Vietnam, launched its car rental service. The move was in cooperation with Mioto, a HCMC-based car rental business. MoMo said its service would deliver cars to users’ homes and is available across major cities and provinces of Vietnam.

Foreign businesses also participate in the market. In 2017, MP Executives and Enterprise Holdings Inc. formed a partnership to launch Enterprise Rent-A-Car in Asia Pacific, starting with Vietnam. Enterprise Rent-A-Car is among the largest transportation solutions providers in the U.S.

In 2019, U.S. car rental business Hertz returned to Vietnam with initial operation in HCMC, after first-time operation in 2012. The Vietnamese franchisee, named New City Rent A Car, aims to serve foreigners in Vietnam and businesses with long-term demand to hire cars for staff.

Source: The Investor


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