European Commission Vice President Margaritis Schinas said the EU is ready to support the green transition and made three recommendations for Vietnam.
“We are ready to support Vietnam’s economic transformation for a greener future,” Mr. Margaritis Schinas, Vice President of the European Commission (EC), affirmed at the opening session of the “Forum and Exhibition”. Green Economy Exhibition (GEFE) 2024 organized by the European Business Association in Vietnam (EuroCham) on October 21.
According to Mr. Margaritis Schinas, Vietnam is a typical example of strategic cooperation and green growth as the focus of the relationship. Accordingly, the EU commits to supporting Vietnam towards the Net Zero goal by 2050. “We want to bring quality investment to Vietnam,” he said.
Vice President of the European Commission Margaritis Schina spoke at GEFE 2024 on the morning of October 21. Image: EuroCham
The EC Vice President also stated 3 recommendations for the green transition process in Vietnam. First, promote circular economy. He said that the world is increasingly using unsustainable resources, so it is necessary to change the approach and extend the product life cycle.
Second, a major and immediate change in sustainable engagement with the planet through judicious use of natural resources. Financial resources also need to be secured to support these efforts.
Third, increase forest protection, ensuring products and services on the market come from legal, sustainable raw materials sources. “We do not want the European market to be flooded with illegal products, so we hope that Vietnam will accompany us and not compromise with environmental damage for business purposes,” he said.
At the COP26 Conference taking place in 2021, in addition to participating in the “Global methane emissions reduction” initiative and signing the “Glasgow Declaration on forests and land use”, the Government announced the Net Zero goal by 2021. 2050. To realize the commitment, Vietnam has updated its Nationally Determined Contribution (NDC). Recently, policies related to economic transition to green and sustainable are gradually being improved.
A new decree on the Direct Power Purchase Agreement (DPPA) mechanism was issued in July, with 40% of European businesses hoping to benefit. The carbon credit market pilot is expected to begin next year. At the 8th Session opening on the morning of October 21, the National Assembly will discuss the revised Electricity Law.
Deputy Prime Minister Bui Thanh Son spoke at GEFE 2024 on the morning of October 21. Image: EuroCham
At this forum, Deputy Prime Minister Bui Thanh Son reaffirmed Vietnam’s commitment to balancing economic growth and environmental protection, expecting to tighten bilateral relations with the EU and member countries, Taking green economic development as one of the breakthroughs.
He proposed that the EU research and implement a number of public-private and multi-stakeholder cooperation projects on green transition. “EU member countries are requested to share experiences in developing carbon markets connected to the world and implementing hydrogen projects,” the Deputy Prime Minister added.
EuroCham assesses that trade relations between Vietnam and the EU are developing strongly thanks to the EU – Vietnam Free Trade Agreement (EVFTA). This agreement has made the EU one of Vietnam’s leading trading partners, creating conditions to promote green investments.
With the Investment Protection Agreement (EVIPA) being negotiated, the two sides have great potential to attract more sustainable development projects. Member countries and many businesses are also interested in cooperation prospects.
“As we face global challenges such as climate change, delta countries like Vietnam and the Netherlands are at greatest risk. Therefore, promoting effective dialogue and cooperation becomes should be more important than ever,” said Consul General of the Netherlands in Ho Chi Minh City Daniël Stork.
The Chairman of the Dutch Business Association in Vietnam (DBAV) also said that member businesses are interested in developing sustainable and green business with the Vietnamese community and businesses.
However, to unlock more potential, experts at the Forum pointed out a series of challenges for Vietnam. EuroCham President Bruno Jaspaert said that the legal system is still not completely complete and compatible with the ambition to transform the economy to sustainability, towards Net Zero by 2050.
Ms. Ngoc Nguyen, Senior Lawyer at Hogan Lovells law firm, expects new laws issued in the next 5-10 years to have greater stability so that investors can easily make decisions and minimize risks. “The legal system needs to serve as a support platform for all stakeholders, because we cannot delay any more in the energy transition process,” Ms. Ngoc said.
Vietnam will also have to consider the issue of energy pricing. EuroCham President said energy costs are very cheap, which is one of the attractions for FDI. But transitioning to clean energy is often expensive. “How to be cleaner while still keeping prices cheap to maintain competitive advantage is a problem for Vietnam,” he said. He cited that when switching to renewable energy, electricity prices in China are 30% more expensive than in Vietnam and in Europe they are 3 times more expensive.
In addition, Mr. Ron Slangen, Deputy Country Director for Vietnam of the Asian Development Bank (ADB) recommended training human resources for the renewable energy industry and developing energy storage solutions. “We have special capital support programs for building renewable electricity storage capacity,” he said.