Vice President of the European Commission, Margaritis Schinas, stated that the EU is ready to support Vietnam’s green transition and offered three recommendations for the country.

Vice President of the European Commission Margaritis Schinas.

"We are ready to support Vietnam in transitioning to a greener future," affirmed Margaritis Schinas, Vice President of the European Commission (EC), during the opening session of the "Green Economy Forum and Exhibition (GEFE) 2024," organized by the European Chamber of Commerce in Vietnam (EuroCham) on October 21.

According to Schinas, Vietnam serves as an exemplary case of strategic cooperation, with green growth at the heart of the relationship. The EU is committed to helping Vietnam achieve its Net Zero goal by 2050. "We want to bring quality investments to Vietnam," he said, while also outlining three key recommendations for Vietnam's green transition. First, he emphasized the importance of promoting a circular economy, noting that the world is increasingly consuming resources unsustainably and must shift to extending product lifecycles.

Second, Schinas called for immediate and substantial changes in how humanity interacts with the planet, especially through sustainable natural resource use. He also highlighted the need for financial resources to support these efforts.

Third, he stressed the need to enhance forest protection, ensuring that products and services in the market come from legal and sustainable sources. "We do not want the European market flooded with illegal products, and we expect Vietnam to join us in ensuring environmental sustainability is not compromised for business goals," he added.

At the COP26 conference in 2021, alongside joining the "Global Methane Pledge" and signing the "Glasgow Leaders' Declaration on Forests and Land Use," the Vietnamese government declared its goal to achieve Net Zero by 2050. To fulfill this commitment, Vietnam has updated its Nationally Determined Contributions (NDC). Recently, policies related to the green and sustainable economic transition are gradually being finalized.

A new decree on the Direct Power Purchase Agreement (DPPA) mechanism was issued in July, with 40% of European businesses expecting to benefit. A pilot carbon credit market is set to launch next year. Additionally, during the 8th session of the National Assembly, which began on October 21, lawmakers are expected to discuss amendments to the Electricity Law. At the forum, Deputy Prime Minister Bui Thanh Son reaffirmed Vietnam's commitment to balancing economic growth with environmental protection and expressed hope for stronger bilateral ties with the EU and its member states, with green economic development seen as a key breakthrough.

He urged the EU to explore and implement several public-private partnership projects focused on the green transition. "We also encourage EU member states to share their experiences in developing carbon markets connected with the global economy and to implement hydrogen projects," added the Deputy Prime Minister.

Deputy Minister and Minister of Foreign Affairs Bui Thanh Son.

EuroCham assessed that trade relations between Vietnam and the EU are flourishing, thanks to the EU-Vietnam Free Trade Agreement (EVFTA). This agreement has positioned the EU as one of Vietnam's top trading partners, creating opportunities to drive green investments.

With the Investment Protection Agreement (EVIPA) still under negotiation, there is significant potential for both sides to attract more sustainable development projects. Many EU member states and businesses are also eager to explore these cooperation opportunities.

"When facing global challenges like climate change, low-lying countries such as Vietnam and the Netherlands are at the greatest risk. Hence, fostering dialogue and effective cooperation has become more crucial than ever," said Daniël Stork, Consul General of the Netherlands in Ho Chi Minh City.

The Chairman of the Dutch Business Association Vietnam (DBAV) noted that its members are particularly interested in developing sustainable, green businesses alongside Vietnamese communities and companies.

However, to unlock its full potential, experts at the forum pointed out several challenges for Vietnam. EuroCham Chairman Bruno Jaspaert noted that the legal system still lacks full alignment with Vietnam's ambitions to transition to a sustainable economy and achieve Net Zero by 2050.

Ngoc Nguyen, Senior Lawyer at Hogan Lovells, expressed hopes that laws enacted over the next 5-10 years will provide greater stability, allowing investors to make informed decisions and minimize risks. "The legal framework must serve as the foundation for all stakeholders because we cannot afford any further delays in the energy transition," she remarked.

Vietnam will also need to consider energy pricing. The EuroCham Chairman pointed out that Vietnam's low energy costs are a key factor in attracting foreign direct investment (FDI), but transitioning to clean energy is often expensive. "The challenge for Vietnam is to maintain competitiveness while transitioning to cleaner energy," he said, noting that electricity costs in China are 30% higher than in Vietnam, and in Europe, three times higher.

In addition, Ron Slangen, Deputy Country Director of the Asian Development Bank (ADB) in Vietnam, recommended workforce training for the renewable energy sector and the development of energy storage solutions. "We have special funding programs to support capacity building for renewable energy storage," he said.

Ngoc Mai

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