Companies stumped by GHG emission obligations

Luong Quang Huy, head of the Division of Greenhouse Gas Emission Reduction and Ozone Layer Protection at the Ministry of Natural Resources and Environment’s (MoNRE) Department of Climate Change, said the MoNRE is completing a circular on technical regulations for measuring, reporting, and appraising greenhouse gas (GHG) emission reductions and related inventory in the waste management sector.

“Waste treatment facilities can implement missions relating to emission reduction following the instructions from the circular. In addition, the Department of Climate Change will mobilise a team of experts and consulting firms to support businesses, ensuring that the results of the inventory will be recognised at both national and international levels,” Huy said. “The circulars for many other sectors will also be promulgated this year.”

Companies stumped by GHG emission obligations, Illustrative image. (Photo: VNA)

The circular would be useful for the business community, especially groups that cause major amounts of GHG emissions, as many remain confused over works relating to GHG inventories and emission reduction.

Reducing such emissions has become a mandatory requirement for businesses around the globe and in Vietnam to minimise negative impacts on the environment and towards sustainable development.

According to statistics from the Ministry of Planning and Investment, Vietnam needs to mobilise $360 billion for implementing its green and sustainable development goals by 2030, half of which will come from the private sector.

However, statistics from the Ministry of Industry and Trade showed that in 43 facilities with major GHG emissions as based on Decision No.01/2022/QD-TTg on the list of sectors, GHG-emitting establishments subject to greenhouse gas inventory, only 19 facilities report inventories based on the regulations of parent groups and supply chain. Inventory-taking methods are not always accurate, and some businesses only use the criteria provided by the parent company to estimate.

Regarding content related to corporate responsibility to the environment and society, the Vietnam Listed Company Awards 2021 reported that up to one-quarter of all enterprises had yet to publish sustainable development goals in their short- and medium-term development strategies. Over 40 per cent of firms have made threadbare announcements, and only one-third have issued specific claims with detailed explanations.

Dang Hong Hanh, co-founder and managing director of Energy and Environment Consultancy JSC (VNEEC), said, “Implementing and reporting GHG emissions inventory is a new obligation and goes beyond normal business operations. Previously, they just had to make a report about energy usage, which is much simpler compared to emission inventory – which requires a certain level of technical understanding. Therefore, enterprises will certainly face many difficulties in the first few years of implementing this work, in terms of technical capacity and lack of trained personnel.”

Large-scale businesses around the globe also face similar problems. A June report on related commitments in the public and private sectors by Net Zero Tracker – operated by the UK-based Energy and Climate Intelligence Unit (ECIU) and the University of Oxford – showed that approximately half of the world’s largest companies have yet to announce net-zero emission plans. In addition, two-thirds of over 700 companies issuing net-zero emission commitments do not have specific solutions to achieve the goal. ECIU expert John Lang noted in the report that governments will need to impose standards and regulations to ensure the process of net-zero emissions reduction. Currently, many firms are confused about what requirements they need to meet and what information they need to disclose.

According to information from VNEEC, the MoNRE and the Vietnam Chamber of Commerce and Industry are working together to integrate criteria for reducing GHGs and classifying and evaluating sustainable enterprises.

“These actions will promote identification and distinction for businesses that have good strategies and practices in general environmental issues and activities to reduce GHG emissions,” Hanh of VNEEC said.

Implications for Vietnam in the bold transition to net-zero More than 130 countries, including Vietnam, China, Indonesia, Japan, Malaysia, and Thailand, have made (or are considering) net-zero pledges. By this, we are referring to the goal of eliminating or offsetting all greenhouse gas emissions, to limit the rise in the earth’s temperature to no more than 1.5 degrees Celsius by 2050.

Can Vietnam achieve its goals on net-zero emissions? Vietnam’s economic achievements have been impressive over recent decades but greenhouse gas emissions have risen alongside them. Patrick Lenain, former assistant director at the Organisation for Economic Co-operation and Development, looks at the carbon market for this country moving forward as it tries to meet major emission-reducing targets.

Organisations lend hand for sustainable forestry in Vietnam The government has recently approved a project worth $3.55 billion to develop the forestry sector in a sustainable manner in the 2021-2025 period. This legal framework aims to reduce greenhouse gas emissions and contribute to the implementation of Vietnam’s net-zero commitments.