Introduction to CDM National Authority and CDM potential

projects in Viet Nam

Nguyen Khac HieuDeputy Director General

International Cooperation DepartmentMinistry of Natural Resources and Environment of Viet Nam

Overview

Vietnam ratified UNFCCC on 16 November 1994.

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

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

Submitted first national communication to UNFCCC in November 2003

Overview

• The project: “Capacity Development for the Clean Development Mechanism in Viet Nam”, phase 2 was carried out in Viet Nam in 2003 with 6 main tasks.

• International Cooperation Department, MONRE is a Executing Agency to coordinate and carry out the project.

Overview

Task 1: Public information for raising CDM awarenessTask 2: Capacity development on CDM for policy makersTask 3: Establishment and capacity development for CDM National Authority (CNA)Task 4: Capacity development for stakeholders relevant to CDM projectsTask 5: Capacity building on CDM research and educationTask 6: Creating a pipeline of CDM eligible projects

CNA in Viet Nam

To meet one of three basic requirement: – Ratification of the KP– Establishment of a CDM National Authority

(CNA)– Voluntary participation in the CDM

CNA in Viet Nam (cont.)

Point of view on CNA * Based on existing organizations with neatly arrangement * Process quickly work related to CDM but keep within the existing law * Obtain maximum possible benefit from participation in the CDM market* Accord with Kyoto Protocol and domestic circumstance* Capacity development for the CNA to manage CDM activities plays an important role in CDM implementation in the country

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

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

CNA in Viet Nam (cont.)

CNA in Viet Nam (Cont.)

2. Functions and tasksBuilding national assessment criteria, regulations and guidelines on Clean Development Mechanism (CDM).Assessing CDM projects at the national level.Submitting potential CDM projects to CDM National Executive and Consultative Board (CNECB) for evaluating them.Receiving, assessing and submitting Project Idea Note (PIN) or Project Design Document (PDD) of CDM projects to the Minister of MONRE for issuing a formal letter of endorsement or letter of approval respectively.Providing CDM information to interested investors, related organizations, consultants and public.Managing and co-ordinating CDM activities and investment in Viet Nam.

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

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

regarding identification, development and regarding identification, development and

registration of CDM projectsregistration of CDM projects

b. Document No. 1022/BTNMT-HTQT dated b. Document No. 1022/BTNMT-HTQT dated

8/5/2003 to inform: 1. establishment of CDM 8/5/2003 to inform: 1. establishment of CDM

National Executive and National Executive and Consultative Board Consultative Board

and, 2. prior investment fields and issues for and, 2. prior investment fields and issues for

CDM projects in Viet Nam in the next period CDM projects in Viet Nam in the next period

CNA in Viet Nam (Cont.)

Establishment

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

CNECB in Viet Nam

CNECB in Viet Nam (Cont.)Members of CNECB

MONRE (one chairperson, one permanent representative and one secretary)Ministry of Foreign Affairs (MOFA)Ministry of Finance (MOF)Ministry of Planning and Investment (MPI)Ministry of Trade (MOT)Ministry of Science and Technology (MOST)Ministry of Agriculture and Rural Development (MARD)Ministry of Industry (MOI)Ministry of Education and Training (MOET)Viet Nam Union of Science and Technology Associations (VUSTA)

CNECB in Viet Nam (Cont.)

Functions and tasks– Providing consultation to MONRE on policies

related to development, implementation, management of CDM activities in the country.

– Providing consultation on guidance and assessment for CDM projects in Viet Nam under the Kyoto Protocol and UNFCCC.

Annual meetings of CNECB: 2 times, one in April and the other in September.

Ministry of Natural Resources and EnvironmentMinistry of Natural Resources and Environment

International Cooperation Department - CDM National Authority -

CDM National Executive and Consultative Board

CDM Secretariat(NOCCOP)

Project Developers

Energy TechnicalExpert Group

Non-Enegy TechnicalExpert Group

Consultation

CDM’s Institutional ArrangementCDM’s Institutional Arrangement

EB

Proposed approval procedure for CDM projects in Viet NamProject Document Vietnamese Opinion +

PP OE

YES

Exclusive Criteria

Priority Criteria

NO

REJECTED

YES

APPROVED

CNA

PIN

National CDM criteria

Endorsement letter

PDD

CDM criteria

Letter of Approval

Registration

yes

yes

No

CNA

Project Developer

CNECB

CNA

CDM Executive Board

No

Project Developer

Approval Procedure for CDM ProjectApproval Procedure for CDM Project

OE

CDM project cycle

Project Design and Formulation

Agency Entity

(EB&COP/MOP)Project participants

Executive Board (EB)

Project participants

Designated Operational Entity (DOE)

Executive Board (EB)

Certified Emission Reduction

Approval/Registration

Monitoring

Validation/ Certification

Issuance of Certified Emission Reductions (CERs)

Designated Operational Entity (DOE)

Designated Operational Entity (DOE)

CDM National Authority (CNA)

1. Exclusive criteriaFirst criteria for screening, selecting possible CDM were developed including:

a/ Sustainabilityb/ Additionalityc/ Feasibility

CDM Project Criteria

2. Priority Criteria Category Criterion content

National Income Generation

-Growth national income -CER revenues

Economic Sustainability

Economic Externalities

-Technology transfer -Import Substitution

Green House Effect

-GHG emission reduction

Non GHG Air Pollution

-Non GHG Air Pollution emission -Non GHG water pollution

Waste -Waste generation rate

Environmental Sustainability

Ecosystem -% change in forest cover -Soil erosion -Likely effect on biodiversity

Poverty eradication

-Creation of rural employment -Reduction of poor household

Social and Institutional Sustainability

Quality of life -People income -Improving of living conditions

A-Sustainability

Readiness of Implementing Agencies

- Public sector - Private sector

2. Priority Criteria

Category Criterion content

International demand B- Commercial Viability

Attractiveness to investors

Get strong support of the central and local authorities and be more attractive for investors

C- Feasibility

Having adequate infrastructure and manpower.

Potential CDM projects under consideration

No Name of Project Project

Site

Emission reductionpotential

(Gg CO2) Status

1RangDong oil field associated gas recovery utilization

VungTau City 6,740 Approval letter

2Thuong Ly landfill closure and

gas recovery and utilization Hai Phong

City 64Endorsement

letter

3HoChiMinh /Hanoi Cities landfill gas for electricity generation

HCM/Hanoi Cities

3,100Endorsement

letter

4Reforestation of newly allocated land in A Luoi- North Central Vietnam

Thua Thien Hue Province

192

5Increasing the efficient use of energy in brewery

Thanh Hoa province 11

Under consideration

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

HCM City 664Under

consideration

7Wind+Diesel hybrid electricity supply system

Binh Thuan City 106

Under consideration

Under consideration

Preliminary portfolio of CDM projectPreliminary portfolio of CDM project

No Name of project Developer CapacityExpected GHG

reduction (KT CO2)

1Upgrading existing coal fired thermal of Pha Lai power plant

Electricity of Vietnam (EVN)

440 MW 378/y

2Wind power plant in Quang Tri Province

QuangTri Electricity Company

20 MW 129/y

3Geothermal power plant in QuangNgai Province

ORMAT private 50 MW 310/y

4 Dak Pone hydro power RCEE 14 MW 40/y

5Cogeneration for PhongKhe paper village

RCEE 6.4 MW 74/y

6Rice husk power plant in Tien Giang Area

Institute of Energy 3 MW 56/y

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

No

Name of projectDeveloper Capacity

Expected GHG reduction (KT CO2)

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

DongNai paper factory

25,000 t paper/y

4.3/y

8Improvement of energy efficiency in SongDa cement factory

SongDa cement factory

85,000t/y

18.2/y

9Efficiency of public lighting system in big city

Institute of Material Science

100,000 units 190/y

10Advanced sedimentary brick kiln in BacNinh province

Institute of Thermal

Engineering

400 mill.pieces/y

49/y

11Reforestation of newly allocated land in ALuoi district

SNVFarmer Union

of ALuoi3,000 ha 28/y

Experiences from CNA

Strengthening cooperation between CNA and related ministries to facilitate CDM activities.

Process quickly work related to CDM but keep within the existing law

Obtain maximum possible benefit from participation in the CDM market

Accord with Kyoto Protocol and domestic circumstance

Next CDM activities in Viet Nam

Enhance CDM project development skills (project design, documentation, negotiation) for project developers, stakeholders.Improve capacity and skills for CNA (DNA) staffs and CNECB members.Develop and implement CDM projects.Integrate CDM issues into local and national development strategies, plans.Participate in the international and regional conferences, workshops to learn and share experiences from other countries.

CD4CDM Project Office57 Nguyen Du, Ha Noi, Viet Nam

Tel: 844 8228974 - Fax: 844 8263847 Email: vnccoffice@fpt.vn

Thank you very muchfor your attention