1

Nguyen Hong Hanh, Steven Von Eije

February 2016

MARKET STUDY

Biomass Advanced Cookstove in Vietnam

2

ADB Asian Development Bank

ALRI Acute Lower Respiratory Infection

CARE Cooperative for American Remittances to Europe Vietnam

COPD Chronic Obstructive Pulmonary Disease

DARD Department of Agriculture and Rural Development

GACC Global Alliance Clean Cookstove

GDP Gross Domestic Product

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit, GmbH (German: German Society for InternationalCooperation)

HHs Households

ICS Improved Cookstove

IE Institute of Energy

LCASP Low Carbon Support Agriculture Project

LEAF Lowering Emission in Asia’s Forest

LIFSAP Livestock Foodstuffs Safety Project

LPG Liquified Petrolium Gas

MARD Ministry of Agriculture and Rural Development

MOIT Ministry of Industry and Trade

NGO Non Governmental Organization

PCIA Partnership for Clean Indoor Air

PED Population, Environment and Development Center

QSEAP Livestock Foodstuffs Safety Project

RBF Result Based Finance

RENMI Renewable Energy and New Materials Institute

SHEER School of Heat Engineering and Refrigeration

SNV SNV The Netherlands Development Organization

VFD Vietnam Forest and Delta project (SNV Vietnam)

VNGO Vietnamese Non Goverment Organization

VWU Vietnamese Women’s Union

WWF World Widelife Fund

Abbreviations

3

I. Introduction ............................................................................................................................................... 4

A. Objective .........................................................................................................................4

B. Methodology ...................................................................................................................4

II. Summary ..................................................................................................................................................... 4

III. Overview ..................................................................................................................................................... 5

IV. Market size and trends........................................................................................................................... 6

V. Market potential and opportunity ..................................................................................................... 7

A. Target customer profile ...................................................................................................7

B. Target market areas .........................................................................................................9

VI. Characteristics by fuel users ................................................................................................................ 9

Firewood user ....................................................................................................................... 10

Agriculture residue user ........................................................................................................ 11

Wood pellet and briquette users ........................................................................................... 11

LPG user ............................................................................................................................... 11

VII. Cookstove market ................................................................................................................................. 11

VIII. Policy relating to cookstove .............................................................................................................. 21

IX. Companies and product in the market .......................................................................................... 21

Stove companies and their products in Vietnam .................................................................... 21

Quality control ..................................................................................................................... 24

Manufacturing capacity ........................................................................................................ 27

Transportation capacity ........................................................................................................ 28

Retailer system ..................................................................................................................... 28

Main barriers to the market .................................................................................................. 29

Willingness to pay versus high quality of cookstoves ................................................................. 29

Behavior change barrier ............................................................................................................... 29

Limited business management capacity and financial constraint .............................................. 30

Willingness to participate in SNV ICS product ........................................................................ 30

X. Conclusion ............................................................................................................................................... 30

Acknowledgements This report would not have been possible without the interview participation of cookstove producers

and researchers. Special thanks to my talented colleagues in renewable energy team for their support.

We also thank Resy Vermeltfoort and Theo Shand for their help in text editing.

Table of Contents

4

I. Introduction A. Objective

SNV is implementing the project: “Acceleration of sustainable market for advanced cookstoves in Mekong Sub-region” in Vietnam. For the Vietnamese market this is the first long-term project (4 years) focused on the industry of Improved Cookstove (referred here after as ICS). The project objective is to sustain the market by incentivizing companies to produce and sell stoves that meet international standards and reduce the emissions from the combustion of solid biomass fuels in order to reduce negative effects on human health. The overarching development objective is contribute to socio-economic development of the local and global environmental protection. This market study was performed to evaluate the current market for cookstoves in Vietnam in order to be able to design a contextualized approach for Vietnam while aligning with the regional project. B. Methodology - Initial desk review of existing reports from Global Alliance for Clean Cookstove (GACC) of

which SNV is a fouding member; GIZ, SNV Vietnam and other reference (specified later). The GACC reports of Vietnam Sector Mapping and Intervention Options were made in 2012 in close cooperation with the renewable energy team of SNV Vietnam. To date, they are the most comprehensive reports on the cookstove industry in Vietnam, therefore they have served as the basis for this report. SNV Vietnam has performed several cookstove projects in which it executed studies related to cookstove usage and build up a considerable network with several cookstove producers. This information has been analyzed and included in this report.

- Phone based interviews:: 32 producers, 2 suppliers and 6 institute of energy were identified and contacted by phone. 34 of them were able to provide information. Others were not available at the time they were contacted. The list used to contact the stove companies and retailers was crated based on an online research. Stove producers with whom SNV previously had contact were also included in this list. A semi-structured questionnaire was designed and used to guide the interview.

II. Summary The study was designed to address key questions listed below:

- What is the potential of the Vietnamese market for using Advanced Clean Cookstoves (ACCS)?

- What are the current cookstoves used in Vietnam and their market penetration?

- What is the available fuel in the market?

- How many stove manufactures are active in the market? Can their products meet customer requirements? Are there barriers to market entry?

- What is the consumer profile? How much will potential clients pay for an ACCS?

General Introduction

5

III. Overview Vietnam is well on its way to becoming a middle-income country by 2020, having made

incredible economic strides across the board in the past decades with GDP increases of 18% per year. In 2012, GACC carried out an assessment of the Vietnamese market that resulted in a report which provided sector mapping and intervention options. According to the report, since 1980, migration to clean cooking has happened naturally as a result of economic growth (accounting for 96%) and purposefully through dissemination by two major players: SNV and Vietnam Women’s Union (accounting for 4% with the combination of other smaller funded programs). Despite these significant gains, 46.4% of people still rely on solid fuel for cooking, causing 10,600 deaths per year. (1)

There have been many programs to promote ICS, however they are all small in scale and not funded end-to-end by either Government or NGOs. Realizing the importance of cookstove components to the renewable energy, deforestation and food security/cropland salinization sectors, many researchers have been involved in biomass energy production, biochar production and sustainable forest initiatives but the challenge of creating a self-sustaining ACCS market in Vietnam remains. (2)

This survey pointed out the positive development that the number of private sector parties involved has been increasing dramatically since 2012. The survey identified that 95% of producers established from late 2011 to present. Though some of them are small in scale, they are all private entrerprises and they provide ACCS models that aim to save fuel, reduce smoke and be affordable for rural households.

The map provided below illustrates the location of producers and their market penetration across the country. The Northern part of Vietnam is covered by company branches providing improved cookstoves (ICS) in 20 provinces, while 8 provinces are reached in the Center and 6 provinces in the South. Two companies exported their stoves to Lao PDR and Cambodia with consideration to transfer technology to local artisans.. . One company exports ICS to Korea which is also the main market for the wood pellets they also produce.

Map 1: Mapping of stove companies’ market penetration in Vietnam (Blue represents producer companies’ main workshop, Green represents companies’ branches areas – source: interview stove companies)

6

This map visually shows the potential market of ICS in Vietnam as private enterprises have presented in 34/63 provinces. However, it also indicates the limitation of stove companies as just provinces around the workshop areas are targeted in order to keep the price low and the products affordable to the target group, while graph of solid fuel use by regions (Which is showed in point B, part V below) points out the potential market is also in the remaining provinces. If SNV Vietnam succeeds with this project, stove companies will have extra financial resources to expand their businessamong other by expanding into more distant markets with high demand of ACCS.

The greatest identified challenge for producers is balancing between the quality of stove and the willingness to pay by the end user. In general, users are willing to pay more for the better quality stove. Many targeted customers however have a low income and use agriculture residue or fuelwood as the main fuel, don’t prefer to switch to a more expensive stove model. Even in the low cost segment, end-users still expect a stove to last for at least 2 years (SNV-VFD, 9-2015).

While the ICS industry in Vietnam is developing there are no regulations related to ICS, and the process for achieving regulations and national standards is lengthy and challenging. While regulation isl critical, it will not ensure people will actually comply with set standards. (2) All ICS manufacturers’ claims that their stoves are highly efficient compared to traditional cooking methods and are continuously re-designing their products to meet the customer’s expectation. In reality, it was found that only a few stove models were assessed by an official testing center. The concept of quality testing is still new to the market and will require significant capacity development.

IV. Market size and trends Current size

The table below shows the method adopted to identify the number of potential target customers.

Potential target customer groups where defined by 8 key distinctions:

Urban or Rural.

Animal Farming Household or Non-Animal Farming Household.

Existing use of Traditional or Modern Fuels.

Above or below the recognised poverty line for Vietnam (under 1.25$/person/day) (5). The following assumptions where taken when breaking up the data:

Animal farmers do not exist in the cities and all animal farmers are above the poverty line; due to research indicating animal farmers are generally richer than their non-animal farming rural neighbours. (SNV Biogas User Survey, 2012)

A minimum of 2 cows or 5 pigs is required to create biogas; the poorest segments of urbanites use traditional fuels.

7

Figure 1: Illustration of target market identification according to GACC, 2012.

In summary, there are four very different markets with very divergent needs: rural animal farmers, inaccessible poor, rural leapfroggers and the lower-income urbanites. The potential market for an ICS intervention in Vietnam is approximately 12.8 million households. (GACC, 2012) Producers with gasification stoves which use agriculture residue and firewood fuel should focus on 4.4 million HHs raising animals and 4.6 million HHs without animals in the rural area. Producers who are developing the gasifier stove to use wood pellet, briquette or charcoal should target the market of 1.1 million HHs in urban area. To 2.8 million HHs using traditional fuel but classified as inaccessible disadvantaged, the approach of a market-based mechanism may be not suitable. Growth rate

There are no supporting figures at present to calculate or forecast the growth rate of demand for ICS in Vietnam but with 12.8 million potential identified HHs the market can be considered as a good opportunity for investors. Trends

Fuel usage is highly correlated to income, with the population moving decidedly to LPG as soon as they can afford it and solid fuel usage concentrated mainly in the bottom 50% of the population. It is critical for ICS programs to reach the last mile and disadvantaged populations, as this is where the biggest persistent need will be when the population continues to get richer. However, the reason for households using cleaner fuels is to increase their cooking options as an addition to rather than a replacement for, solid fuels and traditional stoves. Parallel use of several fuels appears to be a common phenomenon to utilize the abundant fuel resources in terms of wood fuel and agriculture residue in rural areas.

V. Market potential and opportunity A. Target customer profile

Figure 1 shows the market identification. All segments can in principle be targeted but programs will need to address radically different needs across the segments. There are four different groups, 3 rural and 1 urban, as illustrated below:

8

Rural area Urban area

Rural leapfrogger

Rural animal farmer

Inaccessible disadvantaged

Lower-income urbanite

Characteristic Has access to modern fuels such as LPG and electricity. Has sufficient animals to justify bio digester investment.

Has access to modern fuels but might not spend money on them. In favor of portraying wealth through purchase of high cost electronics, etc

Has limited or no access to modern fuels. Is not near roads. Primarily uses biomass (wood and agricultural residue)

Has access to

modern fuels

such as LPG and

electricity.

Increasing costs

has forced a

higher usage of

coal.

Uses LPG for

quick foods and

electricity for rice

cooker.

Size (million) 4.6 4.4 2.8 1.1

Profession Farmers, industry, service & salary workers

Animal husbandry and farming

Subsidence farmers, gatherers, ethnic

Service and industrial workers.

Income Above poverty line

Above poverty line

Below poverty line

Below or near poverty line

Cooking device and fuel

Traditional fixed stove and portable cookstove. Fuel: wood, crop residue.

Traditional fixed stove, gas stove Fuel: wood, LPG, biogas.

Traditional fixed stove, 3-stones fire Fuel: wood, crop residue.

Traditional rocket stove Fuel: beehive coal

Cooking location

Outdoors during summer Indoors during monsoon season

Indoors in a separate building

Mostly indoors for heat in winter, maybe go to a separate building or outdoor in summer

Outdoors during warm season Indoors during winter (not allowed due to toxis SO fumes emitted by coal stove)

Cooking frequency

1-2 meals/day 2-3 meals/day

1-2 meals/day 2-3 meals/day

IAP exposure High Med High Med

9

IAP awareness

Low Med Low High

Environment impact

High High (manure disposal)

High (deforestation)

Med

Barriers to switch

Affordability Access to finance Awareness

Lack of capital Lack of enough animal Lack of construction area

Affordability Access to finance Awareness Access to modern fuel

Affordability (prefer LPG)

Willingness to pay

Low-med Medium – hard to pay out of pocket

Low, due to displacement costs from flooding

Med – can pay if fuel price decreases

Purchase drivers

Ease of use Perception

Fuel saving Ease of use perception

Fuel cost Ease of use

Fuel cost Ease of use

Table 1: Target customers characteristic (GACC, 2012)

The segment most in need of ICS are the highly inaccessible and largely ethnic groups in the North. However, this segment is expensive to reach, relatively small and shrinking every day. The true challenge is to reach the highly demanding 9 million rural households and farmers that are leapfrogging to new living standards. These consumers need stoves to be functional, affordable, and aspirational products that they are as proud to own as their new satellite TV. End-user demand and product preference vary significantly across customer segments. Although most consumer segments can be reached by market-based cooking solutions, affordability remains a major barrier.

B. Target market areas Based on the solid fuel use by region figure, the

area that depends most on solid fuel is North Midland and Mountains with 70% dependency, followed by Mekong River delta and North Central with 55% and 53% respectively. As this fuel is abundant in this area, it will be the main target for ICS. The Central Highland also has high potential with 49% of people relying on solid fuel. According to Map 1 only one of these provinces is actually reached. Compared to Map 1, producers are doing business in the first and the third ranked areas and the second and fourth ranked areas are still under served.

●

Figure 2: Solid fuel use by region (GACC, 2012)

VI. Characteristics by fuel users

38%

70%

53%49%

15%

55%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Solid fuel use by regions

10

Energy consumption and fuel type are strongly influenced by accessibility, affordability and the convenience of the fuel. These criteria are closely related to each other and also depend on household income. The decision making process is complex with economic and technical aspects interlinked with social and cultural issues. Cooking with wood fuel, for instance, is so deeply ingrained in many local cultures that other fuels have little appeal, even when the potential health and environmental threats are recognized by users. Furthermore, the prevalence of fuelwood in many developing countries can be explained by the fact that it is still the most readily available, affordable or even cost-free cooking and heating fuel.

Table 2: Determinants of stove/fuel choice

Social/cultural Economic Technical

Family size Sex of household head Age of household head Education level Taste of food Cooking habits/customs Convenience of fuel Food preferences

Household income Stove price Usage costs Fuel costs Fuel/ICS availability Use as “back-up” stove

Efficiency Safety Emissions Stove quality/durability Functionality/Speed of cooking Convenience/portability Aesthetic features

Source: (GIZ, 2014) (11)

The prospects for switching fuels within households as well as for effective government interventions are markedly different for urban and rural areas. Given the fact that fuelwood will continue to remain the primary practical option for rural households, the promotion of improved stoves should be given greater attention. In urban settings, the availability of LPG, higher education levels and correspondingly higher levels of household income provide the momentum for switching to LPG. However, households do not simply substitute one fuel for another all at once but first begin by using multiple fuels, also known as fuel stacking. Fuel stacking provides a sense of energy security, since compete dependence on a single fuel or technology would leave households vulnerable to price variations and unreliable service. Firewood user

Based on the methodology to analyze potential customers for the ICS, there are around 12.8 million households still using traditional fuel of which firewood is the main source. Those households are living next to mountainous areas where they have an abundance of fuelwood or in remote area where other advanced types of fuel have not yet reached. Firewood is either privately collected by households or is acquired at a firewood market. (On average the price per 20 kg of firewood is between 15,000 VND – 30,000 VND depending on the quality of wood) (SNV, 2011 and field visit experience) (15)

Evidence from reports show that firewood is the dominating source of cooking fuel. There are more poor HHs using firewood as a main source comparing to better off HHs. Almost all ethnic minority HHs use firewood as a main fuel source for cooking as well as for heating. In the winter season in the North (from October to March - 5 months), people keep the fire burning almost all day to warm the house. This is an open fire, generally in house’s center and used for cooking. The fire is often used by elderly and children to stay warm which can lead to serious health issues. Therefore, it is necessary to have a dual function heating and cooking stove for people in this region. The main point that will encourage firewood users to change their behavior of cooking will be the negative effects on the health of women and children. It was found that there is very limited awareness about the harmful effects of smoke to human

11

health such as Acute Lower Respiratory Infection (ALRI) among children under 5 years old, Chronic Obstructive Pulmonary Disease (COPD) and Lung cancer.

Another group which consumes a large amount of fuel wood are HHs who raise animals and have secondary business such as selling wine, tofu or run a small restaurant. Their key concern is looking for another stove that helps them to save wood in order to increase profit margins. Agriculture residue user

Agriculture residue includes rice husk, rice straw, peanut shell, shaving, corn cob, etc. The resource is used either as cooking fuel or supplement to animal feeding. In many village rice mills nowadays, it is seldom to see rice husk strewn everywhere even though this was common practice several years before. People now collect the rice husk because they know it can be burnt or can be used to feed animal or at least they can sell it with the price of 10,000 VND/sack (Field visit). While rice husk is utilised quite efficiently as a bio-supplement for animal raising, cooking and producing briquettes, the rice straw is being left to decay or burned in the field after harvesting. It is estimated that in Thanh Hoa province, about 1.5 million tons of residues, including rice husk, straw, sawdust and shavings generated from agricultural and forestry production are being mainly dumped or burned causing serious environment pollution and wasting a valuable biomass energy sources. In the view of DARD officers, only about 20% of residues from the bamboo processing industry are utilized and the rest is discharged into the environment.

In Northern provinces such as Cao Bang, Ha Giang and Tuyen Quang, corn cobs are used as a main source of fuel for 11 months of the year (Field visit). To utilize this kind of fuel, one stove producer designed a model suitable to the needs of these areas. Most agricultural residue using households have to combine fuel types in order to keep the residues burning. Wood pellet and briquette users

Currently, not many wood pellet or briquette users have been found across the country as the supply chain of these fuel is not fully developed. In the years before 2014, these products were produced for export purpose to Korea at a rate of 120 USD/ton. When the overseas market demand decreased in late 2014 many companies started focusing their efforts on the local market, increasing demand and setting up supply retailers/branches across the country. (Biomass magazine, 2015) (4) LPG users

The number of LPG using households equals the firewood using households though they are predominantly in urban or sub-urban areas. Over recent years Vietnam has seen a reduction in the price of LPG and many lower cost LPG stoves were introduced to the market. As a result, many rural households can now also afford such a stove prompting supply retailers to set up at the village level. This stove is an aspirational stove that makes people feel they are moving towards a modern life. A focus group discussion of 50 women who have LPG stove in Thanh Hoa province (12/2015) provided the following results regarding usage:

It is used only for quick cooking food such as stir-fried meal or boiling vegetable.

Most of the women will use water heated by firewood stove to boil vegetables on LPG stove.

Total estimated time using LPG stove per day is 30 minutes while firewood stove will be from 2-3 hours per day.

VII. Cookstove market Reports from SNV (Cookstove usage in Vietnam 2011 – 3 provinces in the North and

Centre), Biogas user survey (2012 for 17 provinces across the country and 2013 for 13 provinces across the country), a review report of improved cook stove; GACC industry mapping report and

12

information from news on project of WWF shows that the consumers currently use different types of cookstoves, including: Iron bar stove (three legs or four legs):

This is a traditional stove that is widely used in the North and Center of Vietnam. The advantage of this stove is its price, it can be used for cooking in many places with different types of fuelwood (tree branches, straw, etc.). Iron bar stoves lasts for a long time, from 5 years to over 20 years. The price is relatively low ranging from 50,000 VND to 100,000 VND depending on the size and the amount of iron consumed to produce the stove. It is available in local markets and iron-warehouse. Today, most people order them from welding workshops because they can tailor one to any size that fits their needs. Even though many households will build a new stove when their income increases, the iron bar stove will be kept in the house as a backup or to be used for special dishes such as “banh chung” during New Year vacation or special occasions such as weddings in rural areas. The disadvantage of this stove is that just like an open fire it creates a lot of smoke/dust and often has to be tended continuously while cooking and it has a very low efficiency. Dual concrete rice husk stove: This is the most promient stove in the Mekong delta regions (13 provinces: Long An, Tien Giang, Ben Tre, Vinh Long, Tra Vinh, Hau Giang, Soc Trang, Dong Thap, An Giang, Kien Giang, Bac Lieu, Ca Mau, Can Tho). Experts who are working in Agriculture sector from universities in Ho Chi Minh city confirmed that this is the most popular stove in the region due to the abundance of rice husk as it is a by-product of rice production and this is the largest rice producing area of Vietnam. This type of stove can be made by local artisans (it is said that every province has at least one producer). It is made from concrete using a mould. The price of this stove is around 700,000 VND/stove with chimney and 600,000 VND/stove without chimney. 3 ong tao stove This stove is similar to the Lao stove. It is made by fired clay and uses firewood as main fuel. It is widely used in the Mekong delta and provinces near the Lao border. The advantage of this type of stove is that it is compact and can be used with small wood branches and leaves for cooking which is appropriate for cooking the food fast by households. The stove’s price is quite low at around 50,000 VND/stove which is quite suitable for low income households. Cement brick cookstove:

Depending on the design of this stove, you can cook with 1-3 pots at the same time. It has iron bars on the bottom of the pot holder and fuel, such as firewood, agricultural residue or coal, will be placed underneath. The fixed stove for one pot is widely used by households for making animal feed or local wine while the multiple pot designs are used for household cooking. Over the years this cook stove has been promoted by a number of development projects (ActionAid in Thanh Hoa 2011, SNV in Nghe An 2007 and Forest Science Institute). However, this stove normally lasts for only 1-3 years, because it cracks over time. The cost of this fixed stove falls in the broad range of 300,000 VND to 800,000 VND, depending on the size and quality of the stove and can be made in situ by local masons or even by the households themselves. LPG cookstove:

The LPG stove is an aspirational stove, especially in rural areas. In 2015, the price of gas decreased (From more than 500,000 VND/12kg in 2012 to 310,000 VND/12kg in 2015) (12), as compared to previous years, allowing more and more people to financially access this type of stove. However, as previously mentioned, people use it mainly for quick cooking, as many rural households state that one 12kg bottle of LPG can last for 4 months (Field visit). In urban areas there is a growing trend to replace LPG with electromagnetic stoves, because of a number of gas explosion that have happened. Biogas cook-stove:

13

It is a cooking system which consists of a gas generation tank, a pipe connecting the tank and one or more cookstoves with valves to control gas emission and thus heat. Biogas is particularly used by households raising a large number of pigs and/or cattle. There are several biogas projects of which SNV/BP is the biggest with over 145,000 constructed digesters so far (16); others including QSEAP from ADB with around 22,383 constructed digesters (18); LCASP from MARD with 20,000 constructed digesters by now (19); LIFSAP of World Bank with 25,000 constructed digesters and others are under other programs or constructed purely commercial. In total, about 220,000 household biogas plants have been constructed in Vietnam. (20) Electric rice cooker:

This is a very popular stove for households and it is only used for cooking rice. It is accessible to the poor with a price that ranges from 288,000 VND to a few million. (17) Improved cookstove:

An Improved Cookstove is a device that is designed to consume less fuel and reduce cooking time. The stove is convenient in the cooking process and creates a smokeless environment in the kitchen or reduction in the volume of smoke produced during cooking, as compared to the traditional stove. There are several projects from governmental agencies, NGOs and the private sector that promote the ICS. Many types of ICS were researched and developed in terms of fixed brick built, portable stove for direct burning and for gasification. The price of ICS varies from 150,000 VND to >2,000,000 VND per stove. And as a result of the different ICS projects more than 44,500 different types of stove were promoted to households across the country. It is believed that, to date, the same number of ICS was sold by the private sector. Table 3 below shows the classification of the different types of ICS that are available on the current market.

Table 3: The current number of improved cookstoves on the market:

Type Photo Main points Technology

Fixed brick built stove

- Promoted by SNV (2010), World Vision (2011), Helvetas (2011), VNEEP, Science Forest Institute (2007)

- Price: 300,000 -800,000 VND/stove

- Lasts for 1-3 years.

- Developed by Population Environment and Development center (PED)

- Helvitas and World Vision models.

14

Portable direct combustion using biomass

- Brand name: TK90

- Continuous cooking

- Generally uses firewood and biomass

- For 23 years on the market.

- Efficiency test in 1990

- Price: 140,000 VND/stove

Mr Hong in Phu Tho

- Brand name: GF2

- Using firewood, corncob, woodchip, bamboo waste, etc.

- Technology was transferred to a local workshop, but then the quality of the stove was not controlled

- Price: 80,000 VND/stove.

CRD/GRET project

Portable iron cookstove

- For 10 years on the market

- Design is a combination of metal and clay to make a cone-shaped stove

- Uses biomass fuel

- Price: 140,000 VND/stove.

- Many counterfeit products available on the market.

Designed by

Truong Giang

Company

15

Gasification stove

- Brand name: THX stove - 3 years on the market - Uses woodfuel, biomass and corn cob- Can produce biochar - Price: 150,000 -450,000VND/stove.

-Designed and

developed by

GreenGen

company

- Brand name: Tien Manh stove

- Fuel: rice husk

- 3 years on the market

- Price: 240,000 – 290,000 VND/stove. 30,000 VND/fan.

- Lasts for 1.5 years.

Produced by

Tien Manh

company

Many

producers

produce

similar types

of this stove

such as:

VINASILIC

stove, Rua

stove, Spin

Stove, Viet

Stove

- Brand name: TNM-Sieubep 304

- Innovative stove which has a surrounding chamber working as a kettle

- 1 year on the market

- Price: 350,000 – 430,000 VND/stove

Produced by

TNM company

16

- Brand name: Tre Xanh Stove

- 4 years on the market.

- Price: 450,000 – 550,000 VND/stove

Produced by

CCBM

company

- Brand name: Agrines stove, Lam An stove and other names with the same design

- 1 year on the market

- Price: 400,000 VND/stove

- Model is used for collective kitchens and has a price of 980,000 VND/stove.

Produced by

Agrines

company

- Brand name: Infrared gasifier Thao Nguyen stove

- Fuel: utilizes all types of available agriculture and forestry waste

- Works continuously for 2-3 hours

- Price: 2.2-2.9 million/stove

Produced by

Thao Nguyen

company, Duc

Nhan

company,

Thuan Phat,

Vinafat, hitech

company with

the same

technology.

17

- Brand name: Infrared gasifier Duc Nhan stove.

Semi-gasifier stove

- Brand name: PED

- Fuel use: Biomass and fuel wood

- Price: 400,000 VND/stove.

PED

Rocket stove (continuously cooking)

- Solar serve stove

- Fuel: firewood and biomass

- Continuous cooking

- Price: 450,000 VND/stove

- Warranty of 3 years.

Solar serve

company

- Brand name: R14, R18, C22

- Fuel: firewood, corn cob and biomass

- Warranty: 6 months

- Price: 150,000 VND for R14 and R18, 180,000 VND for C22.

GreenGen

company

18

The biggest implemented ICS project in Vietnam was the Government program to

encourage households to use Improved Cook Stoves named: “Widespread implementation

programs of ICS using Agricultural and Forestry products at rural households”. This project was

implemented in some chosen provinces from 2007 to 2010 by MOIT. The Government

organizations that directly worked on the program, the Institute of Energy and the Vietnam

Women’s Union, provided approximately 29,300 improved cookstoves to households over the

three-year period. The Forest Science & Technology Application Centre and an Vietnamese NGO

named Population Environment and Development center also contributed long term; working

hard on other ICS projects. Through these activities many new models of ICS were established

and introduced to the market, though many were quite similar in design. The fixed stoves were

built of clay, cement and bricks, with/without a chimney, and the surfaces were designed to fit a

fixed sized pot. The portable stoves were also usually made of clay, cement and some other

additives and had a cylinder or truncated cone shape. Fixed stoves are built in many projects,

while portable stoves only recently appeared in new projects. Most results of ICS projects are

successful, but not sustainable on the long term. As can be seen with all subsidized projects,

households stopped buying stoves immediately after the project was finished and the funding

mechanism stopped.

19

Table 4: Results from ICS projects (Nguyen Thu Ha, 2014) (13)

No. Project/Plan Implementer Cooperation Time Technology Result

1 DANIDA – Xuan

Son National

Park

Xuan Son

Committee

Denmark

Embassy 2007 PED’s design >200 ICS

2

Green Village

(Bac Giang)

Centre of

Science and

Technology

Application of

Bac Giang

DED –

German 2003

1000 ICS

1000 ICS –

no help

3 Phu Tho

IE and villages

committee World Bank 2006 1500

4 Natural

Reservation by

community of

Quang Tri

CRES

Mac Arthur

2006 -

2008

5 Economic Eco-

Village (Lao

Cai)

Institute of

Ecology World Bread

Since

2006 63

6 GEF project at

Binh Son,

Quang Ngai

GEF 2001 -

2003 N/A

7 Tam Dao

National Park

and Buffer

Zone

Management

Project (TDMP)

MARD, Tam

Dao NP… DED, CIM

2003 -

2006

1387

1st phase

8

VWU in ten

provinces

VWU and

IE

(technology)

Govern

ment

progra

mme

since

2007

29550

20

9 Nghe An FSTAC Fixed ICS 1000

10 Thanh Hoa

Project PED

EASE project 2006 -

2007

1000

11 Thai Nguyen

Project PED 1400

12 Nghe An PED 500

13

Reservation

Area Hang Kia

– Pà Cò

Pan Nature

(People and

Nature

Reconciliation

)

2009 Wood, core

of corn 32

14 Studying and

choosing ICS

for households

in different

zones

Forest science

and

technology

application

centre

FAO 1994 -

2004 4000

15

Cao Bang

Government

forestry

agencies

Fauna and

Flora

International

2007 Wood 500

16 Quan Hoa,

Thanh Hoa CRD GRET 2008

Wood and

agri-

products

> 1000

17 Cao Bang Helvetas

2009-

2010

Fixed cook

stove -

18 Ba thuoc,

Thanh Hoa

Local

authority World Vision

2007-

2012

Fixed cook

stove 264

19 Ba thuoc,

Thanh Hoa PED

CARE 2011-

2012

DK-T3M;

DK-T2M

(PED’s

design)

450 20 Dinh Hoa, Thai

Nguyen PED

21

Phu Tho

EPRO and

local

authorities

ADB pilot

project

2013-

2014

3 portable

ICSs types 560

21

22 Nghe An SNV/local WU LEAF

2012-

2013 Fixed stove 100

Total number of ICS promoted via projects > 44,506

VIII. Policy relating to cookstoves

On 25 November 2015, the Prime Minister has approved the Decision on Vietnam’s Renewable Energy Development Strategy up to 2030 with an outlook to 2050. In the strategy objectives, the cookstove industry is standing out for the first time: “replace biomass-based conventional stoves and low-performing devices with advanced/high-performing items while utilizing traditional biomass for residential and industrial cooking purposes. Increase the percentage of households using advanced/high-performing stoves from a negligible level at present to approx. 30% in 2020; about 60% in 2025; and from 2030, high-performing/sanitary stoves shall be used by most of rural households”.

Since 2014, a total of 22 policies related to renewable energy were developed, as illustrated in the graph below:

Figure 3: Renewable Energy Development in Vietnam (14)

Besides these policies, the ICS programs could strongly contribute to policies of mitigating the

emission of GHG to the atmosphere; diminishing the pressure on natural resources; energy

security and improving health and livelihood for people living in rural areas.

IX. Companies and products on the market Stove companies and their products in Vietnam

22

From intensive searching on

online resources as well as from the acquainted stove companies a total of 40 agencies were contacted for sourcing market information. The reason to contact 6 institutes (from the provinces in the South) is the limited available information on producers in the Mekong provinces. Their information shows that there are in fact no stove companies operating in these provinces. Only the Center of Applied Science and Technology, in An Giang province, implemented a project on gasifier stoves in 2011. The project was a pilot and had not been scaled up after the end date. In Ca Mau province, there is currently an

ongoing project by GreenID (VNGO) to support a model of the brick built fixed stove made by local woman.

Out of 32 identified producers, 11 did not provide all the information on the questionnaire, because they ceased conducting business in this sector. The main reason these producers stopped their businesses was the declining market demand for gasifier stoves as compared to previous years. Those producers were all small workshops. They mentioned that the period when demand was highest was in 2011 and 2012. By then, realizing the promising market, many producers got involved and started producing competitive products with cheaper prices and cheaper quality, which was not durable. This led to the market destruction by destroying the trust of customers. The cheap products were called “counterfeit stoves” made by artisans. Many of these artisans are from villages where they still supply metal materials to and process parts of stoves for other producers for final assembly in their own workshop. Producers that stopped their business did not foresee the potential market in this sector for at least five years, because of the market destruction and the fact that people didn’t believe in the quality of gasification stoves and didn’t want to pay for that. Another reason is the current cheaper price of LPG (Half of the market price as compared to 2012).

Table 5: classification from the list of identification

Type of identified factors

Identified Of which got information

Institute 6 6

Stove producer 32 27

Supplier 2 1

Total 40 34

Labels of reason with no information

No of reason

Don’t want to cooperate (provide industrial level gasifier stove) 2

Not available 4

Grand Total 6

23

In the final list, there was a total of 13 gasifier stove producers, 2 direct burning stove producers, 2 Vietnamese NGOs and 1 retailer that provided full information in response to the questionnaire. Of these producers, only 38% focused completely on disseminating gasifier stoves, while 62% combined it with other businesses, such as selling fuel (wood pellet, husk firewood), selling drying technologies for agriculture or promoting solar technology. Within the 38%, half of them produce both micro and large

gasifiers for households as well as for industrial purposes, the other half focuses only on micro gasifier stoves for household use.

As illustrated in Map 1, section 3 (visual of head office and branch locations of producers), the region that has the highest number of producers is the North, while in the Center and the South, there is only one producer in each region. Provinces around the head workshop are targeted to keep the price affordable. In total, 34 of the 63 provinces are targeted areas. Half of the companies is planning to reach the other 29 provinces in the next year.

All producers are providing different types of stoves, which can be classified by fuel use, application purpose, size or just the shape of the stove, as described in the following table:

Table 6: Different models of gasifier stoves

Models of gasifier stoves on the market

Fuel use Using purpose Type of gasifier

Characteristic Air draft

Wood pellet

Rice husk

Husk firewood

Cob corn

Biomass in

general

Small size for 2-3

persons

Medium size for

>4 persons

Bigger size for a

collective

kitchen or

commercial

purpose

Semi-gasifier

Micro-gasifier

Large gasifier

Batch cooking

Continuous

cooking

Natural draft

ICS

Forced draft

ICS

One stove company in particular, has a market presence in more than 20 provinces of

the North with 12 different models to meet the needs of each area, allowing easier product marketing and generating sales quickly.

38%

62%

Companies main business

Gasifier stove only With other business

24

As a result of customer preferences all producers are often improving or designing new stoves to keep up with market demands and applications; This creates difficulties with ensuring consistent high quality control for finished products. Quality control Thermal efficiency and emitted emission quality control

All producers claim their stoves are the best ones on the current market in terms of fuel

efficiency, however there is no strict internal quality control process implemented and regulated to verify this. Generally, it was found that when a producer tests a prototype for efficiency it is measured by the time it takes to boil a set quantity of water (Liters). This is then compared to competitor stoves on the market or even with their own previous officially tested stoves. If the observed flame was blue or orange and the time to boil the water was similar or shorter, the design was accepted by the company owners and moved into mass production. The reason for this approach are the high costs of testing in the Lab Centre. From the moment of mass production the quality of the stove is usually not checked. Stove companies provide a warranty policy of changing to a new product if one is found faulty (within 3-6 months). This is fine in the current situation where there is no requirement from any government agency nor from the customers’ perspective. This is also stated in the GACC report: “though there is a strong recognized need for standards, Vietnam does currently not have regulated IAP standards and testing facilities have been dismantled due to lack of use”.

SNV Vietnam, with a background in successfully implementing impact-oriented, large scale, multi-stakeholder renewable energy technology, has invested in the ICS sector to promote fixed stove models since 2007 and was actively involved in the international process to recognise the standard of stoves. In 2012, GACC/PCIA financed a testing training with the Water Boiling Test in Hanoi and a field Controlled Cooking Test in Thai Nguyen province for SNV staff and local lab staff. In 2014, GACC funded a project on enhancing capacity for Regional Knowledge and Testing Center, which took place in three countries: Vietnam, Laos and Cambodia. After these actitivies, SNV supported a local lab, the Back Khoa Biomass Energy Lab (now better known as SHEER), to build up the capacity of testing stove performance regarding the thermal efficiency and emission. Related staff of SNV and testing operators were equipped with knowledge and skills to conduct a stove testing protocol.

Internationally, the innovation on the technological front, and therefore the quality standard, will be mainly guided by the recent developments in ICS standardisation, namely the “Lima Consensus” and the International Workshop Agreement on ISO standards for ICS. This global initiative is leading to an international standardisation of ICS, with specific parameters and performance indicatiors with 5 Tiers:

Parameters Explanation Indicative Performance Indicator

Fuel Use Is the stove efficient? Tiers being defined in terms of

Thermal efficiency as 0≤15%; 1≤25%; 2≤35%; 3≤45% and 4≤55%

25

And specific fuel wood consumption

Emissions How much pollution is emitted by the stove?

Tiers being defined in terms of specific emission generation measured in:

Carbon monoxide

Particulate Matter

Indoor Air Quality

Does the stove reduce indoor pollutant concentrations with a chimney or are the emissions so low that IAQ goals are achieved without a chimney?

Tiers being defined in terms of specific emission generation measured in:

Carbon monoxide

Particulate Matter

Safety

Does the stove reduce the risk of burns, poisoning, and other injuries?

Tiers being defined in terms of a number of accidents and other risks.

Table 7: Perfomance Parameters of ISO standards for ICS The 5 Tiers are defined in the table as follows:

Tiers Explanation Remarks

Tier 0 No improvement over Open Fire/Baseline

Tier 1 Measureable improvement over Baseline

Vietnam’s existing portable and fixed ICS falls under Tier 1

Tier 2 Substantial improvement over Baseline The programme targets Tier 2 for the standard criteria

Tier 3 Currently achievable technology for Biomass Stoves

The programme targets Tier 3 for premium criteria

Tier 4 Goals for targeting ambitious health and environmental outcomes

This is an aspirational goal and existing technology does not meet it

Table 8: Tier Definitions of ISO Standards for ICS

Out of 15 producers, identified for both gasifier and direct burning stoves, 7 have had their stoves tested in SHEER – Ha Noi University of Science and Technology testing lab supported by SNV projects. The other producers are willing to send their stoves to be tested, as long as the price is more affordable (currently it costs 800 USD per test). The SNV ICS team had a meeting with the lab director in December 2015 to discuss reducing the costs and it is believed that the potential testing in the new ICS project of SNV will be the motivation for them to make a decision. Beside the SHEER lab, there was a testing facility in the Institute of Energy. However, it ceased being operational a few years ago. In practice,

26

just one company and two VNGOs follow the water boiling test protocol by their own initiative to see the thermal efficiency of their stoves, but they do not have the facilities to carry out an accurate emissions and efficiency test. The remaining companies, whether they are aware of the testing protocol or not, do not practice or follow the protocol, as it is not necessary for them. Below is the stove testing result from the lab center (both in Laos and Vietnam).

Table 9: Stove testing results

IWA PERFORMANCE METRICS

units

Tested in RENMI 17 Dec 2014

Tested in SHEER on Jan 2015

Tested in SHEER on 13 Sep 2015 Tested in SHEER 20 May 2015

Center of Creativity and Sustainability

THX - GreenGen company

Solar Serve company Direct burning

stove - Mr Hong (Phu Tho)

SPIN THX (Large)

THX - R14

3G (Medium)

3G (Small)

TK90 (Small)

TK90 (Medium)

High Power Thermal Efficiency % 3 2 1 1 2 1 1

Low Power Specific Fuel Consumption

MJ/(min∙L) 1 0 1 0 0 0 0

High Power CO g/MJ 4 4 2 1 1 1 2

Low Power CO

g/(min∙L) 4 1 4 1 1 1 0

High Power PM mg/MJ 4 3 2 1 1 0 0

Low Power

PM

mg/(mi

n∙L) 3 3 3 0 0 0 0

Indoor CO Emissions g/min 4 1 2 N/A N/A N/A N/A

Indoor PM Emissions mg/min 3 3 2 N/A N/A N/A N/A

N/A was the missing data from the tests that could not be assessed.

The table shows the testing results of stoves from Vietnamese companies. In general, stoves that are available on the market, which belong to THX, Solar Serve and Mr. Hong companies, have a lower tier level. While the stove of CCS (SPIN stove)as high tier level, it is just in the R&D process. The CCS Centre (SPIN stove) has announced another successful prototype that they are aiming to have in mass production of 100,000 stoves, with an estimated shelf price of 9 USD/stove. However, there is a long way to go, because so far no investor has taken an interest to bear the risk. This might bring us to the conclusion that the ability and willingness to pay from customers will decide the quality of the stove.

The project of accelerating a sustainable market of advanced cookstoves in the Mekong sub-region is seeing “gasifier” stoves, either natural fan or forced-air, defined by GACC as: "Gasifier stoves force the gases and smoke that result from incomplete combustion of biomass fuels back into the cookstove's flame, until almost complete combustion has

27

occurred, resulting in very few if any emissions. Gasifier stoves are also known as Top Lit Updraft (TLUD) stoves, because some fuel is lit from the top of the stove, which forces combustible gases to pass through the flame. Gasifier stoves can also include a fan, to improve mixing of flame, gas, and smoke and to reduce emissions." The process for producers to get their stove models eligible for the project is two stage. The first stage requires them to submit independent lab reports, according to the WBT version 4.2.3 with IWA Tier classification with safety rating. Expected result of the stove testing is tier 2 or higher for thermal efficiency, tier 2 or higher for total emission and tier 3 or higher for safety. To meet these criteria, producers need to send their stoves for official testing, but due to the current high cost many producers are unwilling to do this. The solution provided by the project is sending a technical advisor to work with the company to assess the quality of the stove primarily and conduct the safety test. In addition, by analyzing the existing results it can be identified if further improvements are required for the stove to meet the criteria. Therefore, all producers were asked to work with the technical advisor in this project. Those who are interested in this project like the idea of working with a technical advisor as they can use the results to further promote their products. Material of stove quality control

For a producer to register their brand and protect it with a Copy Right, the names of the stoves must be sent to the Quality Assurance and Testing Center under the Directorate for Standard Metrology and Quality. From the date of testing, it can take anywhere from 6 months to 1 year to obtain this certificate. There are three types of stainless steel material that are commonly used for production: INOX 201, INOX 430 and INOX 304. Of which, INOX 304 is the highest quality material. However, if one stove is totally made of INOX 304 it will make the stove unaffordable for the desired target market (from 600,000 VND/stove or higher depending on size). Also, if the stove is entirely made of INOX 304 it would be too heavy for transportation or use. All producers stated they can easily manufacture with higher quality material as long as the customer is prepared to pay for it. The compromise adopted is to produce the inner chamber with the higher quality material and the outer with lower quality material, as the inner chamber is the area subjected to the highest temperatures it deteriorates the quickest. If designed correctly it can also be replaced easily, if it is damaged over time, but some still claim this solution surpasses the end-users’ willingness to pay. Manufacturing capacity

Producing ICS requires many types of machinery: rolling, welding, stamping etc. Many producers tend to be artisanal or semi-industrial and opt not to buy these machines and instead order parts from the Rua village. The Rua village is located in the Hanoi suburb Thanh Thuy, Thanh Oai and has an established reputation for manufacturing everything from nuts and bolts to automotive parts.

Outsourcing of parts helps to reduce the bottom line of the stove and raises the output capacity for workshops, as only final assembly and small/simple components are done in house. The maximum output with this method by one identified producer is 7,000 stoves/month.

28

The maximum number of workers in one workshop is 10 full time operatives, while the minimum is three. It is said that the production and assembly of an ICS requires many human tasks, therefore 1 or 2 people would struggle greatly to effectively operate a workshop. Workshops visited also double as the storage warehouse with areas ranging from 100 to 500m2.

By keeping the final assembly in-house, it also assists the producers to limit the ease of copycat products going to market, which is especially damaging if they are of an inferior quality.

Table 10: Capacity of companies’ workshops

Transportation capacity

There are a number of adopted methods for transport and distribution of stoves by companies. Generally, it is found that for orders of 50 stoves or more a personal or rented car is used with the producer bearing the costs. For orders of 50 or less, or orders from a 20km radius outside the workshop, an agreement is reached between the producer and retailer to share the costs (information sourced from existing producers that were contacted).

Besides in-house transport services, the post office is quite a convenient alternative for both producers and retailers. Contracts with the post office to pick up stoves at the workshop for transfer to remote areas and highland provinces can be easily put in place with costs of around 30,000 VND/stove.

Another popular method of transport in Vietnam is sending the product by bus, which is quicker, but costs more than other services (prices generally start at 40,000 VND per unit, but can be higher depending on the distance). When using the service of the bus, products must be personally delivered to the station, along with the contact details of the recipients for collection on arrival. End-users of this method will usually, depending on the producer-retailer agreement, transfer the payment for the stoves via a bank account before shipping and pay the shipping costs on arrival. Retailer system

100% of the producers in this survey have had to set up their own distribution network of retailers. For producers of ICS products only, the common approach for sales teams was to travel by truck along the national roads to access the Northern provinces to find suitable retailers. Once established then they would consign a quantity of stoves to each retailer for initial product promotion.

Capacity of the workshop

Human resources (person)

Size of the workshop (m2)

Capacity per month (stoves)

Min 3 100 300

Max 10 500 7000

Average 5.5 330 3300

29

Some stove companies that have other businesses, typically selling fuel, adopted the above approach and also promoted the stoves via their existing retailers as they are usually complimentary to each other. Retailers are bound to one producer product line.

All interviewed producers work with private retailers, with the producer with the highest number of retailers of 250 and the lowest of 30. It is the policy of nearly all producers not to allow retailers to pay after selling, except in the case of consigned stoves.

Only one stove producer, who has previous experience of working with SNV, has realized and acted upon the potential of having The Women’s Union as one of its retailers. They are a “catalog retailer” of the producer and the producer helps them to collect the order via distributed catalogues and sends the requested order to them. Women’s Union members in this case benefit from this, as the price they pay to the producer can be up to 20% less than the fixed price of the end-user.

The Motorbike Seller was an approach tried by some companies. However, it was not effective. The problems arose as they could not control the price given to the end-users and risked damaging the image of the brand. By adopting to use only fixed private retailers, and in one case a “catalog retailer’, producers are able to control the costs and also offer a warranty policy to customers, generally of 3-6months for faulty products. Main barriers to the market Willingness to pay versus high quality of cookstoves

The end-user wants more versatility in the fuel usage, less time for cooking, greater fuel economy, less smoke and affordable prices. Results from the report of the clean stove user’s survey of the VFD project in September 2015, show that the price users are willing to pay for ICS is one third of the actual price. Even if the producer improves the stove according to customer preferences, the price that they are willing to pay is just two third of the actual price. This shows the necessity of this project to narrow the gap between willingness to pay and the actual price.

Feedback from the interviewed companies shows that the main barrier for them to overcome the stove quality issue is willingness to pay. They claim that they can produce a very high quality stove that lasts for more than 5 years if needed as long as they can sell it. The lowest price of a gasifier stove presently on the market is 150,000 VND (small) and the highest is 980,000 VND (large) and 2 million for infrared gasifier stoves. Interviews with companies who were selling infrared gasifier stoves, and stopped their business in this product, mentioned the reason that they did not sell because of the high retail cost. This is very understandable, because, when compared to the price of an LGP stove, households could buy an imported product for that price, which can make them as proud as having a new satellite TV. Behaviour change barrier

The rural people are not really concerned about cooking with fuels and deforestation, mainly because of the abundance of fuel resources in their areas and/or lack of awareness of the negative impact on personal health and the environment. There are three dimensions affecting the adoption of new products or services to the low income bracket that should be taken into account, namely motivation, affordability and engagement with producers. The

30

engagement with the product is showed by their preference of rocket or continuous cooking stoves over gasification products. However, these stoves are unlikely to meet the strict project criteria on efficiency and emissions.

Regarding the question “how can SNV support the company to increase stove efficiency”, all of them showed interest in changing support to marketing of the stove and/or conduct a communication campaign on the negative impact of smoke to the health of women and children, which is a good entrance for them to sell the stove. Limited business management capacity and financial constraint

Limitation on business management and financial constraints have been identified by producers and is seen as another barrier. As they are all new into this sector, 90% of them were established after late 2012, they share the concern of capacity of business management, and 50% of them established the companies as start-ups by highly skilled workers. They also lack financial resources to promote their stove to a broader range of customers or investigate other potential regions. The main channels they are using to promote their stove is their website, YouTube channel or social network, which are all free of charge. Some of them were introduced on national television or in the newspaper, which is said to be a very useful channel for them. In the field, they need to conduct road shows or participate in village fairs. Willingness to participate in SNV’s ICS product

To meet project criteria, 13 gasifier stove producers were contacted and asked about their views on the intended mechanism with the approach of Result Based Finance (RBF). 12 of them set up appointments to visit for further discussion about the possibility of cooperation, of which 8 companies are very interested in the project and willing to join. One of the reasons for not joining the project is that the infrared gasifier stove is a product with no sales in 2015, others perceived that RBF is too risky for them.

X. Conclusion

Nearly half of the population of Vietnam still relies on solid fuel for cooking. Therefore, the ICS programs promise to bring great benefits to local people, particularly to women and children. It will contribute to protect the global environment by reducing the burden on forests, which will reduce environmental degradation and deforestation.

This market study has helped to provide an overview of the sector and answered critical questions on factors that effect the market. This is a very good time for advanced cookstove intervention because the market is prepared in terms of demand and manufacture capacity. But the lessons from previous projects should be taken into account, for example regarding the time for people to change their awareness and the market sustainability when users pay fully for their stoves.

The Vietnam cookstove market has many potential stove manufacturers, R&D and development centers that currently work in the sector. Meeting the project criteria in terms of thermal efficiency and emitted emission is very promising with the support of this SNV ICS project. The project came at the time when all the cheaper quality products broke down and those available on the market have been affected by the negative impact of these cheap stoves on the reputation of ICS in general. The Government has announced a renewable energy development strategy with the outlook towards 2050, in which the number of households that use a more advanced cookstove is specified.

31

To encourage producers involved in this project, the analysis of their main barriers to the market should be taken into consideration. The project implementer may consider to work with a local lab to reduce the costs and/or compare the most effective way to test stove quality with other labs in the region. Moreover, the project implementer may consider to implement a campaign to raise awareness on the negative impact of smoke on human health, which helps people to become aware and understand the danger associated with this and how to protect their families’ health. At the same time it will provide a good entrance for stove companies. The project may link with the Inclusive Business Accelerator, a project of SNV that helps start-up companies to access potential investors. And the most important point is finalizing the RBF incentive and working mechanisms to prepare stove companies.

32

1. Global Alliance for Clean Cookstove: Vietnam Market Assessment Sector mapping – 04/2012. http://cleancookstoves.org/resources/180.html

2. Global Alliance for Clean Cookstove: Vietnam Market Assessment Intervention Option – 04/2012 http://cleancookstoves.org/resources/179.html

3. SNV – VFD, 2015: Clean cookstove users’ survey report – Nguyen Thanh Quang. 4. http://www.biomassmagazine.com/articles/12542/southeast-asiaundefineds-low-cost-

pellet-player 5. micro-gasification manual from GIZ 6. http://tietkiemnangluong.com.vn/tin-tuc/meo-tknl/t11583/an-giang-che-tao-thanh-cong-

bep-dun-khi-hoa-trau.html 7. http://www.worldbank.org/content/dam/Worldbank/document/vn_PA2012Executive_sum

mary_EN.pdf 8. http://apps.who.int/iris/bitstream/10665/200009/1/9789241565110_eng.pdf?ua=1 9. http://www.renewableenergy.org.vn/index.php?page=library 10. SNV – A review report of improved cookstoves in Vietnam 11. https://www.giz.de/fachexpertise/downloads/giz2015-en-report-wood-energy.pdf 12. http://vietbao.vn/vn/gia-ca-thi-truong/mat-hang-Gas-petrolimex-binh-12kg-van-ngang/ 13. Nguyễn Thu Hà, 2014: A review report of improved cookstove in Vietnam 14. Phan Thanh Tung, 2015 http://www.renewableenergy.org.vn/index.php?page=library 15. SNV, Cookstove usage survey in Northern region 2011 16. http://biogas.org.vn/english/Home.aspx 17. http://mediamart.vn/noi-com-dien/ 18. http://www.iob-evaluatie.nl/sites/iob-evaluatie.nl/files/In-

depth%20report%20on%20SNV's%20biogas%20programme%20in%20Vietnam.pdf 19. http://www.lcasp.org.vn/Tin-tuc/Su-kien-Hoi-thao/detail-740.html 20. http://www.slideshare.net/HaiAnhTran2/20150922household-biogas-digesters-53140848

33

Questionnaire to ICS Producer/company

Introduction

Hello. I am Hanh from the Netherlands Development Organization (SNV). I am calling you in the framework of SNV's improved cook stove project, which aims to accelerate the sustainable market of ICS in the Mekong sub-region. This project gives us a consideration to offer an incentive for the stove producer and retailer. I would like to know more about your company and your stove product, as this knowledge will help us a lot in the design phase of the project - Would you mind to spend about 15 minutes for me?

Basic information

Name of the company:

Address:

Field of business:

Production location:

Product

Product in detail

What type of ICS are you producing (gasification or semi-gasification stove)? How many stove sizes?

What is the material of the stove ?

What kind of fuels does the stove use?

Do you sell fuel for cookstoves?

Do you produce other products?

Qualification control

Do you have an internal quality control procedure, if so, please explain.

Have your stoves undergone external testing regarding:

- Quality

- Efficiency

- Emissions

- Etc.

Which organisation performed the tests?

Can you share the testing result?

Ambitions

Are you aware of any available ICS standards? If yes, what are they?

Do you know the efficiency of your stove? What is that?

Do you consider to improve the efficiency of your stove? If so, why, if not, why not?

What barriers do you foresee in developing a ICS market?

What support do you need from SNV to increase your efficiency?

Manufacturing capacity

How many people do you employ to produce the cookstove?

How large is your company workshop?

What is your maximum capacity? (specific per month/year)

Is your input material source stable?

Business

Business information

When did you start selling/producing ICS?

Where is your ICS market? (area/region)

How many stoves have you sold up to now?

34

How many stoves did you sell in 2015?

Which distribution channel did you use to sell your product?

How many % of ale in market based and % of sale under project/program?

Retail capacity

Do you have your own distribution network?

Do you sell your products to external retailers?

How do you transport the stoves to households/retail locations?

Do you use mobile selling? If so, are these your own retailers, arms-length contracts or third parties?

Do the retailers directly pay the full amount of the stove before or can they pay after selling?

Do you provide discounts if people purchase the stoves in bulk, if so, how much?

Guidance to user?

Warranty service?

Marketing

What difficulties are you facing when selling ICS products?

Do you conduct any marketing activities?

If you have marketing activities, what is your promotion channel?

What is your customer segment?

Why do you focus on this segment?

What do you think about the opportunity for a cookstove market?

What are the barriers for a cookstove market?

What are the most important aspects of a cookstove for your customers?

Plan

Do you plan scaling up your business?

What is your plan for the next year?

What is your plan for the next 5 years?

Have you received any support from a NGO or national support programme in the past?

Do you currently receive any support from a NGO or national support programme? if yes, which program and kind of support?

Define your competitors

Who are your main competitors

What are your competitors' strengths?

What are your competitors' weaknesses?

Willingness to be involved

SNV RBF design

SNV is considering to offer an incentive to producers per produced stove , would that encourage you to increase

the efficiency of your cookstove?

SNV is considering to offer an incentive to retailers per stove that is sold to an end-user, would that encourage you to increase the efficiency of your cookstove?

If SNV organised a stove auction and the incentive would be provided to the retailer, would you consider to produce ICS and offer them on this auction?

35

SNV Vietnam Office

Address: 3rd floor, Building D, La Thanh hotel,

218 Doi Can street, Ba Dinh, Ha Noi, Vietnam

Tel. 84 - 4 -8463 791, Fax. 84 - 4 -8463 794

Email: vietnam@snvworld.org

Website: www.snv.org