Currently, sustainable development and global security are facing a serious threat from the greenhouse gas effect. In the face of this situation, the reduction of greenhouse gas emissions has been incorporated into the legal framework by governments around the world, in order to protect the common interests of the community. For Vietnamese enterprises, especially those exporting to major markets such as the US and EU, the story of "voluntary" greenhouse gas emission reduction will no longer exist.

Content:

1. What are greenhouse gases?

Greenhouse gases are gases that have the ability to absorb long-wave (infrared) radiation reflected from the Earth's surface after being illuminated by the Sun, with the heat then being re-radiated back to the Earth. A moderate level of greenhouse gases will not cause the greenhouse effect, but when the amount of these gases exceeds the maximum allowable threshold, the excessive heat dissipation back to the Earth will cause global warming, leading to the greenhouse effect.

The main greenhouse gases include carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O). The gases with low concentrations but high potential for the greenhouse effect are hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3).

2. Impacts of the greenhouse effect

The following are alarming consequences occurring due to the increasing greenhouse gas emissions.

• Global temperature rise

The increase in greenhouse gas concentrations is leading to global warming, causing the Earth's average temperature to rise. At the 2015 Paris Climate Conference (COP 21), countries committed to limiting the global temperature increase to a maximum of 2°C and striving to achieve the 1.5°C target by the end of the 21st century. However, according to the latest report by the United Nations Environment Programme (UNEP), the Earth's temperature is likely to rise up to 2.9°C this century. In July 2023, the United Nations Secretary-General made a significant statement, emphasizing that the "global warming" phase has ended, and the world is now entering a new era of "global boiling". In 2023, Europe recorded a record-breaking heatwave of up to 46°C that lasted 10 days, while in Vietnam, the average temperature has increased by about 0.5°C over the past 50 years and is expected to continue rising by 1.5°C - 2.5°C by the end of the 21st century.

• Melting ice and Rising sea levels

The high temperatures are causing glaciers and ice sheets to melt rapidly, leading to a rise in sea levels and threatening coastal communities and ecosystems. In Vietnam, many coastal areas are facing the risk of severe erosion due to the rise in sea levels, with projections of an increase from 30cm to 1 meter by the end of this century.

• Extreme weather events

Climate change is increasing the intensity of extreme weather events such as heatwaves, wildfires, floods, storms, and droughts. These events not only cause significant damage to infrastructure and agriculture but also have negative impacts on natural ecosystems. In 2023, Europe witnessed the largest recorded forest fires and one of the most severe flood events in recent history.

• Biodiversity loss

Changing climates are altering ecosystems and habitats, threatening the survival of thousands of plant and animal species. The loss of biodiversity not only disrupts food chains and ecological balance but can also have severe consequences for the natural resources that humans depend on.

• Health impacts

The rise in temperature and extreme weather conditions can lead to serious health problems, including heat-related illnesses and the spread of vector-borne diseases. Additionally, air pollution is contributing to an increase in respiratory-related health issues.

• Economic consequences

Climate change is not only an environmental issue but also poses serious economic challenges. Damage to infrastructure, increased healthcare costs, and reduced agricultural productivity are direct consequences of climate change, and these economic burdens will have widespread impacts on communities and global economies.

3. Why is it necessary to reduce greenhouse gas emissions?

In the face of the serious impacts of the greenhouse effect on all of humanity and the global economy, measures and initiatives to reduce emissions are rapidly transforming from voluntary decisions to mandatory requirements.

3.1. Preventing the negative impacts of the greenhouse effect

In the context of record-high atmospheric CO2 concentrations, the greenhouse effect is creating an interconnected cycle of problems with widespread and comprehensive impacts on the environment, health, society, and the global economy, as mentioned. The greenhouse effect and its negative impacts on all aspects of life have posed an urgent task of reducing greenhouse gas emissions.

3.2. Aligning with markets that regulate greenhouse gas emissions

Major markets like the US and EU are tightening environmental regulations, demanding that all imported products strictly comply with carbon emission standards. Failure to meet these standards will not only result in carbon taxes, but also risk completely losing market access. This is a measure to protect the rights and competitive advantages of domestic producers in these markets.

This means that Vietnamese companies, if they wish to access, penetrate, and expand their business activities in these markets, have no choice but to "green" their production models and management through emission reduction initiatives.

4. Global trends in greenhouse gas emission reduction

The following are the common global trends in emission reduction at the moment.

• Carbon Border Adjustment Mechanism (CBAM)

This is an important legal framework of the European Union to address climate change and ensure a level playing field for industries. CBAM imposes a carbon price on imported goods with high emissions, including cement, aluminum, iron and steel, fertilizers, hydrogen, and electricity. This regulation aims to prevent carbon leakage and protect the competitiveness of EU industries that have already been subject to carbon pricing under the Emissions Trading System (ETS). Accordingly, importers of goods into the EU will have to buy carbon certificates to offset the carbon emissions above the allowed threshold during the production of those goods. This directly increases the production costs for Vietnamese enterprises, forcing them to adopt emission reduction measures to minimize the carbon tax burden.

• Green standards in the US

The US is increasingly tightening green standards for imported goods. Many states in the country have passed laws requiring government agencies to only procure products from sustainable sources, in order to drive the transition towards environmentally-friendly choices.

• Trend of sustainable consumption

Global consumers are increasingly prioritizing products from sustainable and environmentally-friendly sources. This trend puts significant pressure on enterprises, forcing them to adjust their production strategies and product offerings to meet the growing market demand for sustainability.

5. The state of greenhouse gas emission reduction efforts in Vietnam

5.1. Greenhouse gas emission situation in Vietnam

As of 2022, Vietnam's greenhouse gas emissions are around 429 million tons of CO2 equivalent (CO2e). This places Vietnam among the group of major emitting countries in the Asia-Pacific region. It is estimated that in 2024, the greenhouse gas emissions can fluctuate at a similar level or slightly higher, reflecting the continued increase in industrial and energy demand, although Vietnam is making efforts to implement emission reduction strategies to achieve the goal of carbon neutrality by 2050. The impressive emissions growth rate of Vietnam over the past decade is as follows:

• 2014: 278 million tons CO2e
• 2016: 317 million tons CO2e
• 2018: 355 million tons CO2e
• 2020: 421 million tons CO2e
• 2022: 429 million tons CO2e

The main emitting sectors include: energy, industrial processes, agriculture, land use, forestry and waste. According to the Business As Usual (BAU) Scenario, Vietnam's total greenhouse gas emissions will reach 927.9 million tons of CO2 equivalent by 2030, around 1 billion tons of CO2 equivalent by 2035, and approximately 1.5 billion tons of CO2 equivalent by 2050, 2.5 times higher than 2020 and 1.6 times higher than 2030.

5.2. The process of reducing greenhouse gas emissions in Vietnam

Vietnam has proactively developed and issued many standards and technical regulations to control emissions, environmental quality, and energy efficiency, and has amended and supplemented existing laws to align with international commitments to reduce greenhouse gas emissions.

The Law on Environmental Protection 72/2020/QH14, effective from January 1, 2022, stipulates that enterprises having the greenhouse gas emission reduction obligations must fulfill the following responsibilities:

• Organize greenhouse gas inventories, build and maintain a database of greenhouse gas emissions, and submit the results of the greenhouse gas inventory periodically every 2 years to the Ministry of Natural Resources and Environment before December 1 of the reporting period for compilation and reporting to the Prime Minister.
• Develop and implement annual greenhouse gas emission reduction plans; integrate greenhouse gas emission reduction activities into quality management programs, cleaner production programs, and environmental protection programs of the establishment.
• Prepare annual report on the level of greenhouse gas emission reduction to implement the greenhouse gas emission reduction plan of the establishment according to the measurement, reporting, and verification system, and send it to the Ministry of Natural Resources and Environment and the relevant ministries, ministerial-level agencies, and provincial-level People's Committees before December 31 of the reporting period.

Decree 06/2022/ND-CP: Stipulates that establishments in the list of sectors and greenhouse gas emitting establishments required to conduct greenhouse gas inventories, as promulgated by the Prime Minister, are the subjects that need to implement greenhouse gas emission reduction. The above establishments shall implement greenhouse gas emission reduction according to the greenhouse gas emission reduction plan at the establishment level and the following roadmap:

• Provide information and activity data for greenhouse gas inventories at the establishment level, develop and implement appropriate greenhouse gas emission reduction measures based on the specific conditions of the establishment.
• From 2026 to the end of 2030, conduct greenhouse gas inventories, develop and implement greenhouse gas emission reduction plans according to the emission quotas allocated by the Ministry of Natural Resources and Environment in line with the greenhouse gas emission reduction targets; be allowed to exchange, buy and sell greenhouse gas emission quotas and carbon credits on the carbon credit exchange.

Decision 13/2024/QD-TTg: Stipulates 2,166 enterprises in 6 key sectors: energy, transportation, construction, industrial processes, agriculture-forestry, and waste, have the obligation to conduct greenhouse gas inventories and propose emission reduction initiatives.

Circular 17/2022/TT-BTNMT: Provides technical regulations on measurement, reporting, and verification of greenhouse gas emission reduction and greenhouse gas inventories in the waste management sector.

→ Read more: What is the carbon credit market? 6 content you may not know

6. Trusted organization providing greenhouse gas inventory and emissions reduction consulting services

To achieve carbon neutrality and Net zero, the Vietnamese government and businesses need to take several important steps such as technology transformation and energy transition. However, the first and ongoing step in this process is to calculate the starting point of the enterprise in the usage and management of greenhouse gases. Therefore, a comprehensive and complete greenhouse gas inventory not only helps the enterprise understand its current situation, but also builds an accurate and sustainable emissions reduction roadmap.

Vinacontrol is the leading conformity assessment organization in Vietnam that provides a package of greenhouse gas inventory consulting services - Guidance on quantification and preparation of greenhouse gas emissions reports in accordance with ISO 14064-1, including the following activities:

• Determine the boundaries and scope of the facility's operations
• Collect greenhouse gas inventory data of the facility
• Calculate the greenhouse gas emissions of the facility
• Calculate and assess the uncertainty of the facility-level greenhouse gas inventory
• Implement quality control of the facility-level greenhouse gas inventory
• Develop a report on the results of the facility-level greenhouse gas inventory
• Technology transfer - Guide enterprises to actively prepare greenhouse gas inventory reports

→ For more detailed information on the Greenhouse gas inventory service, read here

Based on the most accurate greenhouse gas inventory report and in-depth understanding of the industry characteristics of each enterprise, Vinacontrol's leading experts will propose specific measures and initiatives to reduce emissions and enhance greenhouse gas absorption capacity for each case. We pay special attention to developing effective emission reduction roadmaps and commit to accompanying enterprises in the process of "greening" their business operations to achieve sustainable development goals.

Benefits for enterprises when cooperating with Vinacontrol:

• Receive technology transfer on greenhouse gas inventory, guidance on reporting preparation, and emission reduction consulting
• Accompany enterprises throughout the verification process of the greenhouse gas inventory report
• Receive in-depth advice from a team of leading experts in the field
• Nationwide branch network, ready to meet the needs of enterprises
• Optimize time and costs, with long-term after-sales service

For any service requests, please contact the Hotline at 0243.943.3840 or chat directly with a specialist to receive the best advice and support from Vinacontrol!