The Nationally Determined Contribution of Vietnam (NDC) under the UN Framework Convention on Climate Change (UNFCCC) and its Paris Agreement (PA) includes a mitigation component and an adaptation component. The mitigation component includes both unconditional and conditional contributions towards meeting global mitigation actions. The unconditional contribution consists of measures that will be implemented using domestic resources, while the conditional contribution comprises measures that could be implemented if new and additional international financial support, technology transfer, and capacity building are received.

Vietnam ratified the Paris agreement in November 2016 and submitted its first NDC to the UNFCCC, with a target of 8% emissions reduction below BAU in 2030. The second NDC has just been released on 24 July 2020. Accordingly, by 2030 Vietnam will reduce 9% of its total greenhouse gas emissions compared to the Business-As-Usual Scenario (BAU), using its domestic resources. Vietnam’s contribution can be increased up to 27% with international support through bilateral, multilateral cooperation and implementation of mechanisms under the Paris Agreement. Article 6 of the Paris Agreement aims at promoting “integrated, holistic and balanced approaches that will assist governments in implementing their NDCs through voluntary international cooperation”, and is often seen as the market-based mechanism part of the PA.

Internationally, carbon market-based instruments (MBIs) have received much attention as instruments that cost-effectively reduce GHG emissions. Vietnam is also exploring the use of such options, amongst others with support of the World Bank’s Partnership for Market Readiness. This is done in the WB funded VNPMR project. The VNPMR’s objective is to strengthen the Government of Vietnam’s capacity to develop MBIs to reduce GHG emissions, strengthen the capacity to develop, implement and disseminate policies and tools for state management of nationally appropriate mitigation actions (NAMAs); to develop market-based instruments, to pilot credited NAMAs, and to develop a roadmap for participating in domestic and international carbon markets

There are 3 components of the project.

●        Component 1: Strengthening capacity for developing carbon pricing approaches, including through supporting priority building blocks for MBIs;

●        Component 2: Readiness to pilot selected MBIs;

●        Component 3: Program management and stakeholder engagement facilitation.

VNPMR project activities are conducted under the supervision of a project management unit (PMU) hosted in the Ministry of Natural Resources and the Environment, the Department of Climate Change (MONRE/DCC) but also involved the technical expertise and involvement from several other line ministries Energy Efficiency and Sustainable Development – Ministry of Industry and Trade (EESD/MOIT), Department of Science, Technology and Environment – Ministry of Construction (DSTE/MOC), Department of Legal Affairs – Ministry of Finance (DLA/MOF), and Department of Science, Education, Natural Resources and Environment – Ministry of Planning and Investment  (DSENRE/MPI).

Under the framework of the VNPMR project, the joint-venture RCEE-NIRAS (Vietnam) and NIRAS A/S (Denmark) has been awarded a contract to conduct the pilot for a credited NAMA, introduce carbon pricing instruments (CPIs) and develop a roadmap for the application of MBIs in the steel sector. The primary function of MOIT is the state management of industry and trade. As a result, MOIT is the active counterpart for the VNPMR program in the steel sector.

The Consultant team have performed the following tasks:

●        Task 1: Development of the readiness for sectoral crediting program in Vietnam steel sector

●        Task 2: Development of pilot crediting program for steel industry

●        Task 3: Identification of feasible carbon pricing instrument to the steel sector

To enable MOIT to draft a MRV and GHG emission quantification protocol and implement a test on the MRV framework and system at the facility level for coal power generation entities, The Consortium led by NIRAS/ RCEE – NIRAS has been selected to implement the follow-up TA to support MONRE and MOIT in preparing guiding principles of the energy sector MRV system implementation for the use of key stakeholders.