Gas emitting factories in four provinces will have to pay up

Thursday, Aug 08, 2019 09:00

A mangrove forests along Tam Giang lagoon in Quang Loi commune in Thua Thien- Hue Province’s Quang Dien District. Thua Thien-Hue is one of four provinces chosen for a pilot payment plan if they release too much gas into the environment.— VNA/VNS Photo Ho Cau

Factories which omit too much carbon dioxide waste will have to pay fees under a new pilot scheme in four provinces.

The plan was passed during a conference held in Ha Noi on Wednesday.

The idea is for the next two years, 20 factories in Quang Ninh, Thanh Hoa, Quang Nam and Thua Thien- Hue will be under close watch and if they omit too much gas into the atmosphere they will be charged.

After approval from Prime Minister Nguyen Xuan Phuc, the Ministry of Agriculture and Rural Development detail plans to put the programme into play.

Twenty production facilities that have large greenhouse gas emissions, including nine thermo-power facilities and 11 cement production businesses.

It also stipulates the level of payment for production units engaged in thermal power trading with VND4 per 1 kWh (equivalent to US$2 per 1 tonne of carbon dioxide) and VND2,100 per 1 tonne of clinker (equivalent to $1.35 per 1 tonne of carbon dioxide) for those engaged in cement production and trading.

According to Nguyen Van Vu, head of Finance and Planning Department under Vietnam Administration of Forestry (VAF), the payment is lower than the World Bank’s Forest Carbon Partnership Facility pledge to pay for emission reduction efforts in North Central Region which equals to $5 per tonne of carbon dioxide.

This level of payment would increase the electricity’s production cost as well as the factories’ cement production cost by 0.29 per cent, he said, adding the price hike is still within the predicted rise of actual cost of the cement manufacturing sector – between 0.3-1 per cent per year, he said.

It was expected the four provinces would collect about VND172 billion ($7.4 million) a year. Of these, Quang Ninh gained VND123 billion while Thanh Hoa, Thua Thien- Hue and Quang Nam obtained VND41 billion, VND6 billion and VND2 billion, respectively, Vu said.

These were significant sources of income for forest planting and protection at localities, especially for Quang Ninh Province where the collection of forest environmental service fee was very low - only about VND4 billion per year.

The pilot implementation will take place from beginning of next year and finish by the end of 2021.

Nguyen Duc Son, deputy director of Dong Trieu Thermal Power Company said the company supported the trial because thermal power emitted large greenhouse gas emissions. However, in the context of increasingly fierce competition, this cost must be included in the electricity price and a plan is needed for enterprises to implement, he said.

Son’s opinion was shared by Le Tri Thanh, deputy chairman of Quang Nam Province’s People Committee.

Thanh said priority should be given to owners of forests which were close to the factories.

He also said the implementation should not affect the production plan of enterprises next year.

Addressing the conference, Ha Cong Tuan, deputy Minister of Agriculture and Rural Development, said as Viet Nam has been adopting measures to reduce greenhouse gas emissions and develop green economy, the payment of forest environment fee for absorption and retaining of forest carbon, gradually forming the carbon dioxide emission market was an evitable trend.

Tuan asked the VAF to collect comments from enterprises and localities so that the ministry would complete the document and submit to the Prime Minister in October this year.

The draft decision should clarify the scope of the application of the decision and the reason why it applied only to the two sectors – thermal power and cement production, he said.

The foundation for determining service prices, payment to service providers should also be made clear to ensure legitimate interests of participating enterprises, Tuan said. — VNS

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