Green growth: a delicate balance

Mr Vu Huy Hoang

Minister of Industry and Trade Vu Huy Hoang talks about possible solutions to this challenge.

A green economic development model is becoming fashionable not only in Vietnam, but in other economies worldwide. Is the Ministry of Insdustry and Trade (MoIT) ready to develop a low carbon and sustainable industrial growth strategy?

As everyone may know, the green economy is a fast growing new economic development model in contrast to the existing economic one based on fossil fuels. In the midst of the global economic crisis, the United Nations Environment Programme called for a global green new deal in which governments were encouraged to support the economic transformation to a greener economy.

To reach this goal, governments should update their policies to facilitate the efficient use of the natural resources, the development of clean technology, new energy, green transport, waste management, green buildings, green agriculture and forestry sectors while reducing greenhouse gas emissions and environmental pollutants.

As a platform for the development of Vietnam’s green industrial sector, since 2008, the MoIT has focused on the issuance and introduction of across-the-board environmental protection regulations in the industrial sector to better manage the adverse environmental impacts on the sector.

On the basis of these strict rules, the MoIT has gradually conducted investigations into manufacturing bases nationwide and ordered relevant parties to regularly report environmental assessments.

The MoIT has also coordinated and supported its member groups and companies to issue their own environmental protection rules such as those in the textile and garment, coal mining, steel, power and chemical sectors.

In addition, the MoIT has played a leading role in implementing medium and long-term sustainable development programmes such as the Vietnam National Energy Efficiency Programme, the biofuel development strategy, the action plan to respond to climate change, the cleaner industrial production strategy and the environment industry development plan, all of which are designed to develop Vietnam’s industrial sector in a sustainable manner while reducing emissions until 2020.

The “Vietnam Cleaner Production in Industry Strategy towards 2020”, which was approved by the Vietnamese government in September 2009, seems to offer little market incentives to motivate firms to invest and produce green products and services. In this context, do you have confidence in the feasibility of this plan?

I have to say that, to a certain extent, although cleaner production is not a new concept on a global scale, there are few Vietnamese firms that are fully aware of this. Cleaner production is a smart technological and management solution that maximises effective use of the natural resources and minimises carbon dioxide emissions in the environment.

Therefore, it is agreed that cleaner production helps manufacturers to reduce production costs through improved productivity by using less industrial feedstocks and spending less on environmental treatment. This has been already proved by many cleaner production demonstration projects which the MoIT implements in line with the cleaner production in industry strategy. Basically, cleaner production does not mean the manufacturing of cleaner products.

With an aim to successfully implementing the “Vietnam Cleaner Production in Industry Strategy towards 2020”, the MoIT is actively working on strategy components such as public awareness enhancement, design of a cleaner production website and database, technical assistance, development of cleaner production models and issuance of legal and financial incentives to whom cleaner production applies. Based on these across-the-board action plans, I am absolutely confident that the strategy will be a success.

Many of Vietnam’s industrial parks still lack proper treatment systems, leading to the problem of untreated waste being dumped in the environment. What solutions are needed to stop this and promote cleaner production in industrial parks nationwide?

It is true that environmental protection has increasingly become a critical issue in many industrial parks in Vietnam despite the relevant regulations in force. Many industrial parks nationwide lack good waste treatment and management systems. Such problems are the result of businesses’ poor planning and ability to protect the environment. Secondly, the enforcement of the environmental protection regulations is questionable.

It is a certain that such issues cannot be addressed overnight. This can only be dealt with if the Vietnamese government makes greater efforts to raise public and businesses’ awareness and capacity building of environmental protection. The government and relevant agencies should also introduce a wide range of cleaner production models and technologies to businesses inside and outside industrial parks while the environmental protection regulations must be better respected.

What’s more, management authorities of industrial parks nationwide should be increasingly aware of their responsibilities and duties in regard to environmental protection within their boundaries and they should be given incentives for good performances.

Currently, Vietnam’s industrial production remains largely dependent on fossil fuels such as coal and oil. How can Vietnam balance the need of industrial feedstocks for its fast industrial growth and savings of non-renewable energy?

Vietnam’s energy demand is forecasted to reach 47.63 million tonnes of oil equivalent (TOE) in 2010, 83.99 million TOE in 2020 and 97.3 million TOE in 2025. Meanwhile, the country’s energy consumption demand during 2010-2025 is estimated to grow an average 8.6-9.7 per cent, per year. Therefore, it is argued that Vietnam’s fossil fuels such as coal and crude oil may be exhausted by the end of the 21st century.

In this context, the Vietnam National Energy Efficiency Program (VNEEP), approved by the Prime Minister on April 14, 2006, is a set of activities to encourage, promote and disseminate energy efficiency and conservation in the public sphere, in science and technology research activities and in management measures needed to carry out synchronous activities on energy efficiency and conservation throughout society.

The VNEEP is the first-ever long-term comprehensive plan to institute measures for improving energy efficiency and conservation in all Vietnam’s economic sectors. The programme’s energy savings goal is 3-5 per cent of total energy consumption during 2006-2010 and 5-8 per cent of the total energy consumption during 2011-2015. The programme contains a comprehensive set of measures that cover six government sectors (institutions, education and information), industry, equipment and appliances (for the residential and commercial sectors), buildings and transport.

In line with the VNEEP, the MoIT also completed the drafting of the Energy Efficiency Law to be submitted to the 12th National Assembly’s seventh session in May. Once effective, the new law will act an important legislative framework on energy efficiency and consumption in industrial production, construction site management, domestic activities and energy consumed equipment, and will also ensure the targets of national energy security and environmental protection will be met.

Reports reveal that power loss during the transmission and distribution stages is still huge in Vietnam. What are you doing to prevent such losses?

According to our statistics, during 1990-2010, Vietnam’s power demand is expected to grow at an average 13-14 per cent, per year. Hydro power is the dominant source of generation in Vietnam so that the country is highly exposed to hydrological risks and power shortages during the dry season. As a result, power cuts often cause pain to domestic end-users and businesses.

To address this problem, the MoIT has actively taken actions to accelerate the progress of new power plant construction, review power tariffs, restructure the power sector in line with market mechanism and ensure stable power supplies. We are playing the leading role in power saving campaigns in manufacturing, trading and services sectors.

We have also encouraged individual and corporate consumers to use power saving appliances, applying effective power control measures and strengthening investigations over power saving and efficiency use activities at administration agencies and businesses. In relation to power producers and traders, the MoIT has regularly conducted checks-up for operation and maintenance of their power generation and distribution systems so as to prevent power losses and power cuts.

In parallel with technical and management tools, the MoIT is also cooperating with other relevant government agencies to promote public awareness raising and education programmes of energy efficiency and the need to use power saving appliances. These programmes are very important to ensure the targets of the VNEEP will be met.