Solutions for enterprises in reducing greenhouse gas emissions

Dr Nguyễn Phương Nam, United Nations' expert on climate change

Energy transition and greenhouse gas emission reduction play a crucial role in achieving Việt Nam’s goal of net-zero.

According to regulations from the Ministry of Natural Resources and Environment, from the beginning of 2023, about 1,920 businesses will start having periodic inventories of greenhouse gas emissions. This is a new requirement being applied in Việt Nam for the first time, so businesses face many difficulties in implementing it.

Dr Nguyễn Phương Nam, a United Nations' expert on climate change, speaks to the Vietnam News Agency about challenges and solutions relating to this issue.

From the start of 2023, thousands of businesses have had to conduct greenhouse emissions inventories. How have the businesses implemented this requirement?

According to the Law on Environmental Protection, effective from January 1, 2022, Vietnamese businesses will be obliged to conduct inventories of greenhouse gases and assess the current status of their greenhouse gas emissions under the guidance of this law and Decree 06 on elaborating some articles of the Law on Environmental Protection.

The Government understands that this is a new regulation for businesses. So, if enterprises cannot undertake the greenhouse gas emission inventory, they can send the data to the relevant ministries for assistance in conducting the inventory in the initial years. From 2025, businesses will be required to undertake the inventory work themselves.

Thus, this year, businesses are very interested in this matter and hope to receive more detailed instructions on the implementation of the greenhouse gas inventory from the State.

Enterprises also view the greenhouse gas inventory as an opportunity to begin their green transition.

How do you assess the role of the enterprise sector in energy transition and the reduction of greenhouse emissions?

Like all countries worldwide, no nation can reduce greenhouse gas emissions without the contribution of businesses. Enterprises produce goods and services for society, which emit greenhouse gases.

Việt Nam's ambition is to achieve net-zero carbon emissions by 2050.

Therefore, businesses play a vital role in helping the country achieve this ambitious commitment. It is also a task that businesses must undertake as part of the green transition, using low-carbon technologies and renewable energy sources instead of traditional energy sources such as coal, oil, and gas.

However, this is a long-term transition process. Every enterprise has established production processes and technologies, so it requires time and a roadmap for transition. The initial step in this transition is the greenhouse gas inventory, the most fundamental step that allows businesses to determine their position on the national map of greenhouse gas emissions. Subsequently, they can develop appropriate plans and strategies to reduce their emissions.

Based on the greenhouse gas inventory, state management agencies will allocate emission quotas to businesses. Meanwhile, businesses will seek green financial resources and support from international organisations, enabling them to undergo a green transition without disrupting their production plans or the developmental needs of the enterprise.

What difficulties are the businesses facing in the process of implementing energy transition and reducing greenhouse emissions?

The biggest difficulty for businesses now is that greenhouse gas emissions inventory is requested for the first time in Việt Nam. Other countries also face the same problem. 

Việt Nam has been doing the greenhouse gas emissions inventory at the national level for 20 years. 

However, at the business level, the biggest difficulty for the businesses is not yet having the technical instructions for sectors to comply with the regulations on the greenhouse gas emissions inventory. 

According to the provisions of Decree 06 and the Law on Environmental Protection 2020, the State management agencies will have to develop circulars providing technical guidance, processes and steps to conduct inventory of greenhouse gas emissions.

However, up to now, only the Ministry of Natural Resources and Environment has issued a circular guiding the inventory of greenhouse gas emissions in the waste treatment sector.

Meanwhile, for other important fields such as the energy field of the industry and trade sector, there are currently no technical guidelines. 

For businesses, they need to improve their capacity to access these technical instructions. 

In Việt Nam, development projects now only provide support in conducting the greenhouse gas emissions inventory for the State management agencies or non-profit organisations. 

Meanwhile, profitable businesses have negligible support from international development assistance agencies in Việt Nam. So, the State management agencies as well as the development organisations should have support for the businesses in improving their capacity to make their own emissions inventory reports. 

What should Việt Nam do to develop a legal framework relating to climate change and reduction of greenhouse gas emissions, especially mechanisms and policies to help the businesses in green transition?

At present, Việt Nam has strict regulations in legal documents at the highest level such as laws or decrees. However, implementation of the regulations is still limit ed.

Besides documents guiding to implementation of those regulations, the State needs to promote propaganda activities for the businesses, helping them be aware that the greenhouse gas inventory does not impact business profits and business production.

The State must also have policies to encourage the implementation of this greenhouse gas inventory. In the short term, it is the business's obligation and responsibility. However, in the long-term, this is beneficial to businesses because they will have the opportunity to access green capital and green investment for the implementation of green transformation. They will have sustainable production, improve the value of products in the global market and make Vietnamese goods more competitive.

Especially, besides the Ministry of Natural Resources and Environment, it needs the participation of all other ministries and branches. For example, the Ministry of Education and Training must also develop a curriculum on greenhouse gas emission inventory, while the Ministry of Agriculture and Rural Development will have guidelines on emissions inventory for forests or the agricultural sector such as rice production. They are very important things to not only affect Việt Nam's economic development, also improve the value of made-in-Vietnam products.

What can businesses do to accelerate the process of reducing emissions?

While waiting for detailed instructions from the State management agencies on greenhouse gas inventory techniques, and procedures for appraisal of greenhouse gas emission results, the businesses also need to learn measures to reduce greenhouse gas emissions that are easy to implement, such as saving energy, and use of renewable energy or green energy instead of using traditional energy.

In addition, corporate data in Việt Nam is very limit ed. Therefore, it is important that businesses should have the habit of collecting statistics relating to production and business activities.

This is the data preparation step for the implementation of greenhouse gas emission inventory in the coming time. Because if they don't have good enough data, the report does not have much value and does not help the businesses have suitable solutions to reduce greenhouse gas emissions.

Based on the data, experts can propose appropriate solutions for the businesses.