CLEANTECH MARKET VIETNAM REPORT
OFFICIAL PROGRAMME
CLEANTECH MARKET VIETNAM REPORT Executive Summary This report was produced under request of the Switzerland Global Enterprise for preparation of the ASEAN Business Forum in September 2013. It is aimed at Swiss exporters and investors based on two sectors of interest: waste management and renewable energy in Vietnam. The report is designed to to fulfil two major objectives: first, to provide a comprehensive overview of the waste management and renewable energy markets in Vietnam in terms of legal framework, institutional system, available technologies, technical issues, market potential and prospects; second, to identify business opportunities for Swiss investors and exporters based on analysis and evaluation of the waste management and renewable energy markets in Vietnam. In terms of structure, the report is divided into two major parts in accordance with two research topics. The first part covers the issue of waste management in Vietnam in which the market overview, institutional mechanism, technical aspects of wastewater and solid waste management, and prospects for business in the country’s waste management sector were clearly described. Meanwhile, in the second part, Vietnam energy market was depicted in details with more focus on renewable energy sector. The legal framework, institutional system, power system, development potential of renewable energy and energy efficiency as well as prospects for business development were presented to provide a full picture of the country’s energy market. Then for each sector, either waste management or renewable energy, specific recommendations for Swiss investors and exporters were provided based on previous analysis of the local market. Overally, the report shows that waste management and renewable energy in Vietnam are both potential business fields for Swiss enterprises. The government of Vietnam has developed legal framework and policies to encourage and facilitate participation of both local and international organizations in these sectors. Along with supporting policies, the increasing demand for waste treatment and energy use in Vietnam is a favourable condition for entry of Swiss investors and exporters to the country. However, it is also significant for Swiss enterprises to take into account possible risks of business investment in these two sectors to ensure their success. Language: English Number of pages: 72
DISCLAIMER The information in this report was gathered and researched from sources believed to be reliable and are written in good faith. Switzerland Global Enterprise and its network partners cannot be held liable for data, which might not be complete, accurate or up-to-date; nor for data which are from internet pages/sources on which Switzerland Global Enterprise or its network partners do not have any influence. The information in this report does not have a legal or juridical character, unless specifically noted.
Author: Vu Thi Kim Thoa, Nguyen Hai Yen, Nguyen Thi Hai Ngoc - Entec ESCO Vietnam Service and Trading Company Limited & Vu Thanh Hai - Institute of Energy, Ministry of Industry and Trade, Vietnam
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Contents
1.
CLEANTECH - WASTE MANAGEMENT IN ___ VIETNAM ______________________________8
1.1.
overview ____________________________ 8
1.2.
Institutional mechanism _________________ 9
1.2.1.
Policies, laws and regulations on waste management _________________________ 9
1.2.2.
State authorities and Institutional organizations 10
1.2.2.1.
Waste management agencies at the central level
10
1.2.2.2. Waste management agencies at the local level ___ 11
1.4.1.
International cooperation policy and governmental priorities ___________________________ 36
1.4.2.
Prospects of the market in 2013 and beyond ___ 37
1.4.3.
List of projects calling for investment ________ 39
1.5.
Recommendations for Swiss industries and services42
1.5.1.
Market potential and opportunities _________ 42
1.5.2.
Market entry ________________________ 42
1.5.3.
Recommendations for Swiss investors/exporters 43
1.5.4.
Directory of useful contacts ______________ 44
2.
CLEANTECH - RENEWABLE ENERGY IN ____
1.2.2.3. Enterprises operating in the environmental sector _____________________________ 12 1.2.2.4. Environmental Protection Association _______ 13 1.3.
Technical aspects of waste management ______ 13
1.3.1.
Wastewater management ________________ 13
1.3.1.1.
Municipal wastewater management _________ 13
1.3.1.2.
Industrial wastewater management _________ 18
1.3.1.3.
Mitigation measures and Technologies available for wastewater treatment __________________ 20
1.3.1.4.
SWOT analysis of wastewater management ____ 22
1.3.2.
Solid waste management ________________ 23
1.3.2.1.
Municipal solid waste management _________ 23
1.3.2.2. Industrial solid waste management _________ 27 1.3.2.3. Hazardous industrial waste management _____ 29 1.3.2.4. Medical waste management ______________ 31 1.3.2.5. Hazardous medical waste management ______ 31 1.3.2.6. Mitigation measures and Technologies available for solid waste treatment __________________ 33
VIETNAM _____________________________ 47 2.1.
Overview ___________________________ 47
2.2.
Institutional mechanism ________________ 47
2.2.1.
Legal framework for renewable energy _______ 47
2.2.2.
Government Agencies Working on RE _______ 49
2.2.3.
Overview about Electrical System from Generation to Distribution _______________________ 50
2.3.
Renewable energy in Vietnam _____________ 54
2.3.1.
Renewable energy potentials _____________ 54
2.3.2.
Renewable energy potentials by types _______ 54
2.4.
Energy efficiency _____________________ 60
2.5.
Prospects of renewable energy ____________ 61
2.5.1.
Prospects___________________________ 61
2.5.2.
List of projects calling for investment on renewable energy _____________________________ 63
2.6.
services ____________________________ 63
1.3.2.7. SWOT analysis of solid waste management ____ 34 1.4.
Prospects ___________________________ 36
Recommendations for Swiss industries and
2.6.1.
Business opportunities _________________ 63
Contents
2.6.2.
Barriers for market entry ________________ 64
2.6.3.
Recommendations for Swiss investors/exporters 64
2.6.4.
Directory of useful contacts ______________ 65
3.
IMPORTANT TRADE FAIRS AND ___________ EXHIBITIONS IN CLEANTECH____________67
4.
CONCLUSIONS / FURTHER STEPS _______68
REFERENCES ________________________________69
List of tables
Table 1: Solid waste generation in 2003 and 2008 (ton/year) ........................................................................................................ 23 Table 2: Composition of household solid waste as inputs of landfills in some localities: Hanoi, Hai Phong, Hue, Da Nang, HCMC in 2009-2010 .......................................................................................................................................................................... 26 Table 3: Common and typical technologies of hazardous waste treatment in Vietnam .................................................................. 31 Table 4: Waste mitigation measures ................................................................................................................................................. 34 Table 5: Targets development of the Power Sector by 2030 ............................................................................................................ 54 Table 6: Solar thermal energy at selected locations in Vietnam ...................................................................................................... 56 Table 7: The potential of wind energy in Vietnam at height of 65 m ................................................................................................57 Table 8: The technical potential of wind energy in Vietnam .............................................................................................................57 Table 9: The technical potential of small hydro power plants in Vietnam ...................................................................................... 58 Table 10: Potential and the ability to exploit biomass ...................................................................................................................... 58 Table 11: Geothermal potential in the regions of Vietnam ............................................................................................................... 60 Table 12: The total capacity of renewable energy sources connected to the power grid in operation (MW) ................................. 63 Table 13: The total capacity of off-grid renewable power in operation (MW) ................................................................................. 63
List of abbreviations
ADB
Asian Development Bank
ASEAN
Association of South East Asian Nations
BOD
Biological Oxygen Demand
CDM
Clean Development Mechanism
COD
Chemical Oxygen Demand
DOC
Department of Construction
DONRE
Department of Natural Resources and Environment
EE
Energy Efficiency
EIA
Environmental Impact Assessment
EP
Environmental Protection
EVN
Vietnam Electricity
FDI
Foreign Direct Investment
GDE
General Directorate of Energy
GNP
Gross National Product
HCMC
Ho Chi Minh City
IE
Institute of Energy
IFC
International Finance Corporation
JICA
Japan International Cooperation Agency
JSC
Joint Stock Company
MARD
Ministry of Agriculture and Rural Development
MBBR
Moving Bed Biofilm Reactor
MBR
Membrane Biological Reactor
MOC
Ministry of Construction
MOF
Ministry of Finance
MOH
Ministry of Health
MOIT
Ministry of Industry and Trade
MONRE
Ministry of Natural Resource and Environment
MOST
Ministry of Science and Technology
MPC
Municipal People’s Committee
List of abbreviations
MPI
Ministry of Planning and Investment
NEDO
New Energy and Industrial Technology Development Organization (Japan)
NREP
Natural resources and environmental protection
ODA
Official Development Aid
Petrovietnam
Petroleum Corporation of Vietnam
PPC
Provincial People’s Committee
PTSC
PetroVietnam Technical Services Corporation
PV
Photovoltaic
RE
Renewable Energy
SPPA
Small Power Purchase Agreement
TOE
Tons of oil equivalent
URENCO
Urban Environment Company
USD
US Dollar
VCCI
Vietnam Chamber of Commerce anh Industry
VINACOMIN
Vietnam National Coal and Minerals Corporation
VNEEP
Vietnam National Energy Efficiency Program
VND
Vietnam Dong
WB
World Bank
1. Cleantech - Waste management in Vietnam 1.1. OVERVIEW Waste management is currently an emerging issue in Vietnam. Each year, about 1.5 billion m 3 of wastewater and about 30 million tons of various types of solid waste are generated in the whole country, and this number is expected to keep increasing in the coming years. Urban areas occupied by about 33% of the whole country’s population annually produce over 21 million tons of waste (approximately 50% of the country’s total waste volume). In terms of density, household waste, industrial waste and hazardous waste account for about 80%, 15-17%, and 1% respectively of the country’s total solid waste volume. Waste is mostly generated from urban areas. Municipal waste occupies up to 50% of the country’s total waste volume. Industrial waste is mainly concentrated in key economic regions, industrial zones and developed urban areas. About 80% of industrial waste is generated from large industrial centers in the North and the South regions. On average, 50% of industrial waste of Vietnam is produced in Ho Chi Minh City (HCMC) and neighboring provinces; 30% is generated from the Red River Delta and the North Central region. The country has about 1,500 trade villages (mostly locating in rural areas of the North region) which generate 774,000 tons of non-hazardous waste each year. The amount of hazardous waste tends to increase over time. The largest sources of hazardous waste are industries (130,000 tons/year), followed by hospitals (21,000 tons/year), and then agricultural production (8,600 tons). Waste management (including waste classification, collection, reuse, recycling, treatment and disposal) is now an emerging issue of interest. However, the majority of solid waste in Vietnam is not safely disposed. Urban Environment Companies (URENCO) are the key entities assuming responsibility for collecting, transporting, restoring and disposing of household waste. Meanwhile, the treatment of hazardous waste despite being the responsibility of medical units and waste generating industries is still very limited. Waste recycling and reuse is an active industrial sector in Vietnam driven by an unofficial network of waste pickers, collectors and buyers. Regarding waste collection, the collection rate at urban areas is about 83-85%. In bigger cities, the collection rate is higher than that in smaller cities. In Hanoi, the collection rate at the city’s inner districts is around 95%, while it is 60-70% in its suburbs. In HCMC, the collection rate is 90 - 97%. In other cities like Hue, Da Nang, Hai Phong, the collection rate in the city area is about 90%. In most urban areas of Grade 2 and Grade 3, the collection rate in the city area is also over 80%. The popular form of waste disposal is waste burning in open dumps. The country has 98 dumping sites among which only 17 sites are hygienic; most of them were constructed by ODA funds. In many areas, waste is often burnt or landfilled or discharged into vacant land areas or rivers, canals or ditches (Ngo, 2010). For hazardous waste, the major treatment is concurrently disposing of various types of municipal waste or storing them at the facility or selling them to recycling units; even in some places, waste is generated unorganizedly. Among large-scale industrial units and industrial zones, currently some have adopted the methods of using a common waste treatment or disposal system of some simple incinerators, industrial steam boilers or specialized waste treatment facilities near their locations. The capability of treating hazardous medical waste has been enhanced. The total capacity of incinerators is sufficient to ensure disposal of about 50% of total hazardous medical waste volume. However, due to the lack of funds to operate and maintain these incinerators, the problem of inappropriate implementation of technical procedures during operation of the incinerators still exists and results in the generation of toxic air like dioxide
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and furan. In some sites, the disposal of hazardous medical waste is implemented similarly as for normal waste. Waste recycling is a relatively popular treatment method in Vietnam. Households make full use of various types of recyclable waste such as metals and paper to sell to scrap-iron dealers or waste collectors in the region. Reusable and recyclable waste types are classified by waste collectors and then sold to recycling units. The waste recycling market in Vietnam is relatively active and mostly managed by the informal sector. In Hanoi, the volume of recyclable waste accounts for about 22% of the generated waste volume. In the industry, some industrial sectors can recycle 80% of their generated waste. In many trade villages, the rate of recycled waste is about 90% of recyclable solid waste generated from their facilities. Waste in Vietnam contains high proportion of organic components which are positively potential for compost processing. However, this activity has not been widely implemented. Although other waste disposal technologies such as waste-to-power, waste-to-fuel, biofuels or building material production, etc. have been applied in some locations, the application rate is very modest. In terms of institution, Vietnam has developed and introduced a relatively complete and comprehensive legal framework on environmental protection and waste management, but the execution of this framework is still limited. The institutional waste management system from the central to the local level has been developed and gradually improved. Responsibilities of the ministries at the central level and departments at the local level have been clearly defined. URENCOs are units which provide services of household waste collection, transport and treatment in urban areas. However, the assignment of functions and obligations of the ministries, sectors and localities is still somehow inappropriate due to the overlap and restriction in coordination among different bodies. The state budget for waste management has remarkably increased in the last few years. From now to the year 2020, the government will spend about 30 to 40 thousand billion VND building sanitary landfills, closing unsafe open dumps and further investing in medical waste treatment. Despite the increasing budget, the expenditure for operation and maintenance of waste collection and disposal systems is still very low (around 0.18% GNP); and there are insufficient resources required for waste disposal activities (US Commercial Services, 2012).
1.2. INSTITUTIONAL MECHANISM 1.2.1. Policies, laws and regulations on waste management Waste management is one of the environmental issues attracting special attention of the government in the last few years, illustrated by a number of major legal documents as follows: 1- The Environmental Protection Law 2005 approved by the National Assembly on 29 November 2005 (replacing the Environmental Protection Law 1993). 2- Decree No. 80/2006/ND-CP dated 9 August 2006 of the Government (replacing the Decree No.175/CP dated 18 October 1994) guiding the execution of the Environmental Protection Law. 3- Decree 59/2007/ND-CP dated 9 April 2007 on solid waste management. 4- The National Strategy of 2009 on Waste Management towards 2025 with a vision to 2050 issued enclosed with the Decision No. 2149/QD-TTg dated 17 December 2009. 5- The National Environmental Protection Strategy towards 2020 with a vision to 2030 issued enclosed with the Decision No. 1216/QD-TTG dated 5 September 2012. 6- The program on solid waste treatment investment in the 2011 – 2020 period approved in the Decision No. 798/QD-TTg dated 25 May 2011 of the Prime Minister.
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7- The orientation of urban drainage and wastewater treatment towards 2025 with a vision to 2050 issued enclosed with the Decision 1930/QD-TTg dated 20 November 2009 8- Decree No. 88/2007/ND-CP of the Government dated 28 May 2007 on water drainage in urban areas and industrial zones. Apart from the above legal documents which govern the waste management in Vietnam, the government has also issued a number of favorable policies or incentives to encourage investment and implementation of local environmental protection programs and projects including those involving waste management. Some of these policies and incentives are follows: - Circular No.121/2008/TT-BTC dated 12 December 2008 of the Ministry of Finance regarding financial support for investment in solid waste management. - Decree No. 04/2009/ND-CP dated 14 January 2009 of the Government on incentives and support for environmental protection activities. - Decree No. 69/2008/ND-CP dated 30 May 2010 of the Government on the policy of encouraging socialization of activities in the education, vocational training, health, culture, sports and environment fields.
1.2.2. State authorities and Institutional organizations The current environmental management system in Vietnam combines sectoral management and territorial management. This system is built based on regulations of the Environmental Protection Law of 1993 and the Government‘s Decree No. 175 CP dated 18 October 1994 guiding the implementation of the Environmental Protection Law. According to these regulations, the government unifies state management on environment protection in the whole country. The Ministry of Natural Resources and Environment is the national management agency in charge of the environmental issue. People’s Committees of cities and provincies take responsibility for waste management in their localities. URENCOs of cities and provinces are the key public utilities in charge of waste collection, transport, and treatment in the localities. 1.2.2.1. Waste management agencies at the central level At the central level, there are 5 ministries directly joining solid waste management task, namely: Ministry of Natural Resources and Environment (MONRE), Ministry of Construction (MOC), Ministry of Industry and Trade (MOIT), Ministry of Health (MOH), and Ministry of Agriculture and Rural Development (MARD). Functions, tasks and responsibilities of the ministries and departments engaging in waste management are regulated as follows: - MONRE is the agency in charge of overall environmental protection and management in the whole country, assuming the key role in hazardous waste management. - MOC is in charge of solid waste management planning at the regional level, inter-provincial level, interurban level, and for major economic areas. - MOIT is in charge of guiding, examining the implementation of legal regulations on environmental protection in the industrial sector, including industrial solid waste. - MOH is in charge of directing, guiding, examining medical waste management, assessing solid waste impact on human health, and monitoring waste treatment in healthcare facilities. - MARD is in charge of directing, guiding, examining the implementation of legal regulations on waste management in the agricultural sector and rural areas. Other ministries including Ministry of Planning and Investment (MPI) and Ministry of Finance (MOF) are responsible for coordinating financial sources for waste-related projects implemented by the above ministries (MONRE, 2011).
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Figure 1 below illustrates the institutional arrangement of solid waste management at the national level. Figure 1: Institutional arrangement of solid waste management at national level
Source: MONRE (2011)
Although functions and responsibilities are assigned to the ministries and departments, there exists dispersion and/or overlaps in solid waste management at the central level. In principle, MONRE is responsible to the government for ensuring consistent implementation of waste management activities. However, the treatment of household solid waste and trade village waste in accordance with regulations of the Environmental Protection Law and relevant documents is responsibility of MOC. Meanwhile, industrial solid waste management has been not clearly defined as responsibility of MOC or MOIT. Similarly, solid waste management in trade villages has neither been clearly defined as responsibility of MOC, MARD or MOIT. The responsibility of household solid waste management in rural areas, however, has been assigned to both MOC and MARD (MONRE, 2011). These facts are illustrated in Figure 1 above. 1.2.2.2. Waste management agencies at the local level In localities, People’s Committees of cities and provices directly under the central goverment fullfil the state management function of local environmental protection. Departments assigned to take direct charge of waste management include: - Department of Construction (DOC): is in charge of household solid waste and landfill management, including monitoring implementation of urban planning of the province or city. - Department of Natural Resources and Environment (DONRE): is in charge of overall waste management, environment monitoring, and implementation of waste management policies and regulations.
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However, the roles of DOC and DONRE in solid waste management depend on characteristics and organizational structure of each province and possible differences between them. These departments not only take charge of expertise of their governing ministries but also are under management of the People’s Commitees of provinces and cities (PPCs and MPCs) (MONRE, 2011). At the local level, the overlap of functions and responsibilities among various department still exists. According to the Decree No.81/ 2007/ND-CP, the state management function of overall environmental management (including waste management) at the local level was assigned to DONRE. However, according to the Decree No.13/2008/ ND-CP, the state mangement function of municipal household solid waste was assigned to DOC. As a result, in each locality, the solid waste management function is assigned to different departments. Typically, in Hanoi, Haiphong, Hue... the solid waste management task is assigned to DOC. Meanwhile, in Da Nang and HCMC, this task is under responsibility of the municipal People’s Committee (previously assigned to DONRE). The current popular management model is distinct for each urban area without connection and cooperation between localities to deal with inter-regional and inter-provincial issues. In each locality, URENCO belongs to different management agencies (DOC, DONRE or PPCs, MPCs), resulting in the lack of a focal unit (MONRE, 2011). 1.2.2.3. Enterprises operating in the environmental sector At present, about 2,270 enterprises in the whole country have registered their business in the environmental protection sector; among these, specific types of enterprises listed below play the most important role in the waste management field: - URENCOs: are public utilities directly in charge of waste collection, transport and treatment in the provinces and cities. Subject to each locality, URENCO may belong to DOC or DONRE. In Hanoi, Hai Phong and Thua Thien - Hue, URENCO is directly under management of DOC while in Da Nang and HCMC, URENCO is directly under management of the MPC while DONRE manages the sector in vertical dimension in terms of expertise (MONRE, 2011). These companies are responsible to the local authorities for waste collection, transport, transhipment, storage, treatment and landfill in identified locations with specific targets and budget line allocated by the government for each year. - Private environmental service enterprises: These enterprises collect, transport and treat waste under contracts with local authorities or manufacturing units. For instance, Thanh Xuan Environment JSC in Hai Phong collects waste in 5 communes of Thuy Nguyen suburban district including Phu Ninh, Minh Tan, Thuy Son, Luu Kiem, and My Don. - Waste recycling enterprises: In Vietnam, many enterprises spealize in production of products made from waste, typically such as traditional waste recycling trade villages like copper casting, aluminium casting villages in Nam Dinh, iron and steel refining and recycling villages in Da Hoi (Bac Ninh), or glass villages in Hanoi. Besides these trade villages, many small and medium-sized enterprises specialize in trading recycled waste from paper, cloth, plastic, oil ... typically like VietStar, Tam Sinh Nghia, Vietnam-Australia Environment Company, etc. - Enterprises operating in areas of consultancy, project design, development of environmental impact assessment reports; - Enterprises operating in areas of consultancy, traning and environmental technology transfer. - Enterprises operating in areas of design, work execution, construction of pollution treatment works, landfills, waste storage stations, transhipment stations; - Enterprises providing waste treatment services: treatment of wastewater, solid waste, hazardous waste; - Enterprises operating in areas of producing energy, fertilizers, building materials, etc. from waste.
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It should be noted that business fields of these enterprises are very wide, possibly covering almost all services like consultancy, design, work execution, installation, waste treatment, among these some fields are their strengths. 1.2.2.4. Environmental Protection Association The Vietnam Association for Conservation of Nature and Environment was established in 1988. Major tasks of the Association include: joining development and implementation of policies, laws and measures related to natural resources and environmental protection (NREP); organizing activities to improve NREP awareness, knowledge and capability of members; paticipating in NREP scientific research and technology development; enhancing community awareness and knowledge about NREP. By end of August 2011, the Association had 150 members, including sub-associations under the ministries, departments, research institutes, universities, and non-government organizations. Many member entities of the Association are providing services of designing and constructing waste treatment technological lines or waste treatment services.
1.3. TECHNICAL ASPECTS OF WASTE MANAGEMENT 1.3.1. Wastewater management 1.3.1.1. Municipal wastewater management a. Classification of urban areas: According to statistics of the Ministry of Construction, by end of 2011 there were 753 urban areas in the whole country which are classified as follows: - Two special urban areas: Hanoi and HCMC; - Three cities directly under the Central Government are Grade 1 urban areas, including: Hai Phong, Da Nang, Can Tho, and 8 cities directly under the provinces are Grade 1 urban areas, including: Hue, Vinh, Da Lat, Nha Trang, Quy Nhon, Buon Ma Thuot, Thai Nguyen and Nam Dinh. - 11 cities directly under the provinces are Grade 2 urban areas, including: Bien Hoa, Ha Long, Vung Tau, Viet Tri, Hai Duong, Thanh Hoa, My Tho, Long Xuyen, Pleiku, Phan Thiet and Ca Mau; - 47 urban areas of Grade 3 are towns or cities directly under provinces. - 42 urban areas of Grade 4 are district-level towns or commune-level towns. - 640 urban areas of Grade 5 are commune-level towns. Total population of 753 urban areas from Grade 1 to Grade 5 is 30.4 million people, accounting for 33% of the country’s total population. Note: Urban areas of Grade 1 include those having over 1 million residents for urban areas directly under the Central Government and those having 500,000 residents and above for urban areas directly under provinces. Urban areas of Grade 2 include those having 800,000 residents and above for urban areas directly under the Central Government and those having 300,000 residents and above for urban areas directly under provinces. Urban areas of Grade 3 are those having the population of 150,000 people and above. Urban areas of Grade 4 are district-level towns or commune-level towns having the population of 50,000 people and above. Urban areas of Grade 5 are commune-level towns. (Source: Vietnam Environment Administration, 2012)
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b. Generation and quantity: The total amount of untreated wastewater in the whole country is around 1.5 billion m 3, in which the amount of wastewater in urban areas and industrial zones is about 1 billion m3. A majority of urban areas in Vietnam do not have wastewater treatment factories or stations. The country has about 10 urban wastewater treatment factories built and operating in some provinces and cities such as Hanoi, Da Nang, Buon Ma Thuot, Da Lat and HCMC. Some other cities are implementing drainage and environmental sanitation projects such as Hue city, Ha Long, Viet Tri, Thanh Hoa, Dong Hoi, Nha Trang and Quy Nhon. Small urban areas hardly have any drainage and wastewater treatment projects (Tran, 2012). Hanoi with the population of 2.7 million people on average discharges about 510,000 m3 of wastewater each day (Ngo, 2010). Wastewater is treated at 2 centralized wastewater treatment stations: Truc Bach station and Kim Lien station with the total capacity of about 6,000 m3/ day and night. The city is preparing to build 2 large-scale wastewater treatment plants, namely Phu Do plant in charge of wastewater treatment in Cau Giay and Thanh Xuan districts with the capacity of 71,000 m3/ day and night and Yen Xa plant in charge of waste collection and treatment in Ba Dinh, Dong Da and Thanh Xuan districts, etc. with the capacity of 275,000 m3/ day and night (US Commercial Services, 2011). HCMC with the population of nearly 5 million people on average discharges about 1.2 million m3 of wastewater each day but has only 1 centralized wastewater treatment station in Binh Chanh district which was built in 2004 and completed construction in 2008 (US Commercial Services, 2012). Wastewater is collected through sewer lines of nearly 6,600 m long and pumped to the treatment plant. In the first stage, the plant had the capacity of 141,000 m3 /day and night and the investment cost was over VND 1,500 billion; the plant treated wastewater for the basin of over 1,000 ha of Districts No.1, 3, 5, 6, 8 and Binh Chanh District. In the second stage, the plant upgraded its capacity to 512,000 m3/ day and night to treat wastewater for the basin of over 3,000 ha of 11 districts including Districts No. 1, 3, 4, 5, 6, 8, 10, 11, Tan Binh, Binh Thanh and Binh Chanh. Although household wastewater occupies a larger proportion than the wastewater generated from production areas, the former currently has not been treated. Household wastewater is only included in the stage of collection planning and has been collected at a small rate since the infrastructure for urban drainage and wastewater treatment has not been strongly developed. c. Current status of urban drainage and wastewater treatment: Drainage: The drainage system in most urban areas in Vietnam was formed during French domination period, recovered after 1975 and significantly improved just in the last 1-2 decades. A noticeable feature of this system is the joint drainage, i.e. jointly using the sewers or ditches to drain both rain-water and wastewater. The urban drainage systems are under management of public utilities. Depending on each locality, this system can be managed by drainage companies, water supply companies or urban environment companies. Most wastewater generated from households is preliminarily treated in septic tanks before discharging into the general water drainage system and directly flowing to the receiving places (lakes, ponds, rivers, streams and ocean) without any treatment (Vietnam Environment Administration, 2012). In many places, households have septic tanks, but these tanks are not connected to the general drainage system, so wastewater flows into open sewers, overflows in the surrounding area, or is absorbed into the soil, causing water pollution. Wastewater treatment: Accoding to Asian Development Outlook 2013 report published by the Asian Development Bank (ADB) in Hanoi in early April 2013, at present, only about 10% of municipal wastewater of Vietnam is treated by appropriate methods. Households in urban areas mostly use septic tanks or on-the-spot treatment systems which can only partially treat wastewater. 90% of municipal wastewater including wastewater from households, wastewater from plants, industrial zones, hospitals, trade villages, livestock and poultry farms is discharged directly into sewers and rivers without any treatment (Tran, 2012).
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The suction of waste from cesspool, transport and discharge of sludge from septic tanks of households, offices and factories in urban areas is currently not under management. Depending on the locality, the service of sucking sludge from septic tanks may be implemented by water drainage companies, urban environment companies or private companies under the request of households or offices, and this is a charged service. Currently no city has well managed this activity (Vietnam Environment Administration, 2012). In Hai Phong, the water drainage company provides a free-of-charge service of sludge suction from septic tanks of households on a periodical basis; expenditure for this service is deducted from drainage fees paid by households contributing into the city budget. Currently, there are only several wastewater treatment stations built and operating in 6 cities including Hanoi, HCMC, Da Nang, Da Lat, Buon Me Thuot and Ha Long. Local authorities are the main bodies responsible for providing urban wastewater treatment infrastructure, but due to the lack of funding and limited capacity to manage urban environmental programs, the attraction of funding sources from private sector as well as wastewater treament facilities and technologies imported from foreign countries has become a priority policy and urgent need for local governments. d. Curren status of urban wastewater treatment technologies: Currently, the popular technology of urban wastewater treatment adopted in centralized wastewater treatment stations is the aeroten technology with activated sludge. Some projects adopt low-cost wastewater treatment technologies involving biological reservoirs such as urban drainage projects in central coastal areas, e.g. Dong Hoi, Lang Co projects by WB, Binh Tan wastewater treatment project in HCMC (funded by the Belgium). Other projects apply the new aeroten technology (SBR) involving operation in batches, e.g. Ha Long wastewater treatment station (funded by WB), Yen So wastewater treatment project, or combine an aeroten tank operating in batches and a biological reservoir such as Bai Chay wastewater treatment station (Quang Ninh) (Tran, 2012). The decentralized wastewater treatment technology for service entities, manufaturing units, health care facilities, residential clusters, etc. have been adopted more and more. Advantages of this method include reduction in sewer building cost, flexibility in investment and management, and possible local production of many products. Typical products made in the country include precast ferroconcrete septic tanks with thin walls (Ba Ria-Vung Tau Urban Drainage Company), anaerobic and aerobic treatment combination tank made of composite material (the Environmental Science and Technology Institute – Construction University), decentralized wastewater treatment tanks made of reinforced concrete with activated sludge technology, biotechnology, bioten, etc. In general, urban wastewater treatment still contains many weaknesses. Most urban areas lack wastewater treatment stations due to limited funds. Some areas have wastewater treament stations, but they do not operate at full capacity because of asynchronous investment. Many wastewater treatment factories/stations are built at a large investment cost, but they do not come into operation due to difficulties encountered in operation and management mechanisms. To reduce costs, many stations do not operate appropriately in accordance with their design. Up to now there has been no complete study which comprehensively assesses the current situation of urban wastewater treatment technology application in Vietnam. Many existing issues have not been addressed, e.g. the combination of septic tanks and the general drainage network either in a seperate form or a mixed form, whether wastewater treatment systems should be centralized or decentralized, the issue of wastewater reuse, slurry treatment and reuse, selection of wastewater treatment technologies, etc. (Vietnam Environment Administration, 2012). e. Current status of hospital wastewater treatment: At the end of 2010, there were 13,640 medical facilities of various types in the country. Each hospital bed generates on average about 0.4 – 0.95 m3 of wastewater per day. Total amount of wastewater generated from medical facilities is around 150,000 m3/day and night; it is forecasted that by 2015 this figure would increase to 300,000 m3/day and night.
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Hospital wastewater, apart from usual pollutants like organic substances, vegetable oil and animal fat, bacteria, contains typical mineral and organic impurities such as drug waste products, disinfectants, chemical solvents, residues of antibiotics, radioactive isotopes used in the disease diagnosis and treatment; among these the most concerned component is bacteria causing digestive diseases which can easily spread out through water. Hospital wastewater also contains many pharmaceuticals and chemicals which may adversely affect performance of biological treatment projects. Recent statistics of the MOH show that 67.7% of the central-level hospitals, 56.1% of provincial hospitals and 44.4% of district hospitals perform wastewater collection and treatment according to regulations. However, these systems use outdated methods such as multi-layer biological filtering, traditional aeroten, biological pond, biological filtering in dribs and drabs, etc. which have deteriorated and hence could not ensure compliance with national technical norms or standards on environment (MONRE, 2011). Many medical facilities are still discharging liquid waste into the environment. The popular process of hospital wastewater treatment can be summarized as follows: Hospital wastewater is taken to a colletion pit, then pumped through a regulating tank to reduce its volume and stabilize its composition. Wastewater after flowing through the regulating tank is pumped to a mixing zone to transform or break down undegradable organic matters into degradable ones, creating neccessary conditions for effective operation of the aerobic biological treatment tank. Wastewater after passing through an advanced oxidation zone continues to flow through an aerobic biological treatment tank to treat nitrogen and phosphor. After leaving this tank, COD, BOD is reduced by 70 – 80%; wastewater continues to flow through a sedimetation tank. Wastewater discharged from the sedimentation tank has the COD density reduced by 70-75%. The pure surface water flows from the horizontal sedimentation tank to a sterilization tank. Wastewater after passing through the treatment system could meet discharge standards. The appropriate technology for hospital wastewater treatment is an integrated technology which combines the chemical process including catalysts (strong oxidizing agents) and the biological process to remove residues of antibiotics as well as surfactants (detergents) that are non-biodegradable. f. Wastewater treatment in trade villages: There are 1,450 trade villages in the country, including more than 300 traditional trade villages; most of them alternate with residential areas or gather in clusters without clear boundaries. According to results of a survey by the MOST, 100% wastewater samples, even including surface water and groundwater, in the trade villages all have exceeded the permitted standards. Most villages have not had wastewater treatment systems. Wastewater treatment has been implemented in only a few villages. For instance, Van Phuc textile and dyeing village in Ha Dong is now adopting the technology developed by Department of Chemical Technology (Faculty of Chemistry, University of Natural Sciences). This technology uses flocculation, flocculation aid, absorbers (self-made) to first conduct primary treatment to remove all suspended matters, sediments, dust, etc. to reduce their density to less than 50%. Then the system continues to perform secondary treatment using activated sludge or biological filtration in combination with additives; this process can treat 30% of toxic substances contained in the water. In the next step, wastewater is treated by AOB (enhanced oxidation); this measure allows the treatment for up to 90% of toxic compounds. To enable recycling treatment, it is possible to further perform water absorption to completely remove waste, then the water quality could meet Grade A standard. Multi-purpose wastewater treatment equipments used in the trade villages above can be applied to various types of wastewater such as wastewater generated from weaving, dyeing, paper making, food industry, household wastewater with the treatment capacity of 5 to 1,500 m3/day and night and low treatment cost (1,200 – 3,500 VND/m3 of wastewater). Those equipments can be used in all trade villages in the country (Toan A Environemnt Technology JSC, n.d).
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g. Wastewater treatment in slaughter-houses The popular wastewater treatment process currently applied in slaughter-houses can be briefly described as follows: Wastewater from generating sources flows through the wastewater collection network into pits. Here, a raw trash rack is installed to remove large impurities from wastewater. Then wastewater oveflows the regulating tank where it is stirred to avoid sedimentation in the tank. The regulating tank has the function of regulating the flow and concentration of input wastewater of treatment stations, neutralizing and stabilizing the wastewater pH level. Wastewater after passing through the regulating tank will automatically flow into the UASB tank for anaerobic biological treatment. Wastewater having high pollutant concentration will be exposed to the anaerobic mud layer, and all the biochemical processes will take place in this layer, including hydrolysis, acidification, acetate forming and creation of methane and other end products. However, after passing through the anaerobic tank, the concentration of organic matters and other substances is still higher than regulated standards, so wastewater will continue to be treated biologically at higher levels in an anoxic tank. Effluent from the anoxic tank will pass through an aerobic tank where the air is blown into the tank by air distribution plates to enhance dirt disturbance and provide oxygen for aerobic microorganisms while keeping the mud in a suspended state. Aerobic microorganisms will consume colloidal and dissolved organic matters contained in the water to grow. The amount of aerobic microorganisms will be supplemented by circulating sludge from the sedimentation tank. Wastewater after passing through the aerotank will automatically flow into the biological sedimentation tank. Sludge is retained in the tank bottom; a part of it is circulated again into the aerotank while the other part is delivered to a mud tank. Wastewater then passes through an intermediary – sterilization tank to remove the remaining bacteria and suspended substances in the water before the water is pumped to the receiving source. Sludge in the sludge tank is stored in a certain time period, then the authorities will collect and treat it according to regulations. h. Wastewater treatment in manufacturing units which have the risk for causing pollution Currently, many local enterprises provide wastewater treatment equipments, technological lines for manufacturing units which have the risk for causing pollution, e.g. markets, plating factories, dyeing factories, food processing factories, agricultural product processing factories, breeding farms, etc. However, these technologies have only been applied in a few entities. Currently, there are no adequate data on the number of entities applying the treatment technologies and their quality. i. Garbage water treatment technologies: At present, all over the country there are very few landfills having garbage water treatment stations. Garbage water treatment stations have been constructed only in sanitary landfills such as Nam Son garbage water treatment station (Hanoi); Deo Sen, Ha Khau, Quang Hanh garbage water treatment stations (Quang Ninh), Trang Cat garbage water treatment station (Hai Phong), Loc Hoa wastewater treatment station (Nam Dinh) or areas which are environmental hotspots due to garbage water such as Dong Thanh, Go Cat, Da Phuoc, Phuoc Hiep garbage water treatment stations (all in HCMC). According to experts‘ evaluation, among the garbage water treatment stations above, those invested for modern construction, providing high treatment performance and satisfying the Vietnamese Standard TCVN 5945-1995 include Nam Son garbage water treatment plant (Hanoi) and Go Cat garbage water treatment plant (HCMC). The fresh garbage water treatment technology: The current popular treatment technology for garbage water containing high pollutant concentration is the one in which garbage water after being gathered into a tank or a reservoir is treated by adopting physicochemical methods (flocculation, absorption, membrane filtration), chemical methods (oxidation, ion exchange) and microbiological methods (anaerobic biological treatment, anaerobic and aerobic treatment). - Nam Son garbage water treatment station (Hanoi): This station is managed by SEEN Technology Corporation in terms of design, equipment supply, construction, installation and operation from October 2005 to present; its designed capacity is 500 m3/day. At that station, garbage water is treated through many steps: natural treatment, preliminary treatment, special treatment (physiochemical treatment to remove heavy metals and undegradable organic substances), biological treatment. Among applied technologies, the CLEANTECH MARKET VIETNAM REPORT
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biotechnology of 1 treatment step of nitrogen over 2 parallel tanks results in high performance: the efficiency of COD and N-NH3 treatment is (>95%) and (>96%) respectively; the compacting technique and closed oxidation process ensure the removal of >90% of substances which are difficult to biologically decompose under the fully automatic operation mode. The garbage water quality after treatment satisfies the environmental standard TCVN 5945-1995. - The garbage water treatment technology in Go Cat solid waste Landfill (HCMC): In this landfill, garbage water is processed in 4 levels: (1) Level 1: preliminary treatment to remove calcium combined with anaerobic biological treatment by using an anaerobic treatment tank and reversing the flow to the sludge base (UASB reactive tank). The mixing zone receives raw water and circulating water from the UASB tank. From this location, wastewater is delivered to the calcium elimination tower; (2) Level 2: aerobic biological treatment using activated sludge (ASP) in combination with nitrification and nitrate elimination to minimize BOD and COD and total nitrogen; (3) Level 3: physicochemical treatment by coagulation - flocculation - precipitation – sedimentation and sand filtration, (4) Level 4; treated by microfiltration and nanofiltration. Post-treatment garbage water fully satisfies the environmental standard TCVN 5945-1995. - Methods of leachate treatment at old landfills by using plants: The method of leachate treatment at old landfills by using plants such as sesame oil, vetiver grass, elephant grass and signal grass was successfully studied and applied in pilot scale by Dr. Ngo Hoang Van (Water and Water Environment Association - Ho Chi Minh City Union of Science & Technical Associations) to treat garbage water at Dong Thanh landfill in HCMC. This is a biological treatment method which is implemented in the natural environment and does not pollute the environment. Research results show that for concentrated leachate sources with high concentration of pollutants, after being diluted at the rate of 10%, roots of some plants such as jatropha, vetiver grass, elephant grass and signal grass are capable of assimilating and absorbing pollutants while developing in natural conditions. As assessed by experts, it is possible to apply this study’s results to replicate the model in garbage water treatment at the old landfills. - Biotechnology: Aerobic treatment of circulating garbage water: Leachate comprises BOD, COD, NH3-N and heavy metals. Thus, it is possible to use the new technology, namely "Biotechnology: Aerobic treatment of circulating garbage water" for garbage water treatment at the old and new landfills in Vietnam. The efficiency of this technology is remarkably high. In the composition of treated garbage water, the amount of pollutants such as BOD, volatile organic compounds (VOC) can be reduced by 70%, and there is hardly any unpleasant odor generated. Currently, this technology has been studied and applied in the United States since 2002 and then adopted in many other countries (Cu, 2010). 1.3.1.2. Industrial wastewater management a. Current status of industrial wastewater generation and treatment: By December 2011, 283 industrial zones were established in the whole country; among these 180 zones came into operation with 6,800 manufacturing or business projects [20]. The total volume of wastewater in industrial zones was about 1,000,000m3/ day and night (accounting for 35% of the total wastewater volume nationwide). Currently, the country has about 60-70 wastewater treatment plants concentrated in industrial zones/export processing zones, approximately 80% of which are invested by ODA sources. Thus, wastewater treatment technologies and equipments are quite diversified due to their origins from various countries. The popular wastewater treatment technologies include activated sludge and biological filtration. Among active industrial zones, only about 10% have centralized wastewater treatment plants while the remaining 90% and most industrial clusters, factories, manufacturing units, trade villages do not have wastewater treatment stations. Meanwhile, many industrial zones have centralized wastewater treatment systems, but they actually do not operate because of the lack of funds for operation or the zones do not have connection pipelines to direct wastewater to the centralized wastewater collection systems. Many wastewater treatment systems are constructed for the purpose of dealing with the authorities; they operate only during
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examination of the authorities, and then illegally discharge wastewater under favorable conditions. Besides, some industrial zones invested in centralized wastewater treatment systems, but these systems have deteriorated, resulted in low performance, generated wastewater in excess of required standards or have not operated. Some wastewater treatment plants were designed, installed in an impractical manner, so their treatment is not satisfactory. A typical case is Phong Phu Textile and Dyeing Company which has a wastewater treatment system with the capacity of 4,800 m3/day. The system after completed construction could not be checked and taken over as it is impossible to treat the water color. As evaluated, approximately 80% of wastewater treatment systems (excluding those of foreign production units) have not met the regulated emission standards (Cu, 2010). Hanoi has 5 centralized industrial zones and 13 small and medium-sized industrial clusters, but only North Thang Long Industrial Park and Sai Dong Industrial Park have wastewater treatment stations. In the other industrial zones, wastewater flows through the network of sewers, ditches in urban areas into 4 consecutive rivers: To Lich river, Lu river, Set river, Kim Nguu river and follows the Chau Giang River to enter Nhue-Day river, Yen So lake and then flows to neighboring provinces. In HCMC, the volume of industrial wastewater discharged into the environment is more than 400,000 m3/day. Among 12 industrial zones in the city, only Le Minh Xuan and Tan Tao Industrial Zones have wastewater treatment systems while the remaining zones each day discharge to the environment over 30,000m3/day through rivers, canals without any treatment. At Viet Tri City, most industrial wastewater is directly discharged into the Red River without treatment. The Red River receives nearly 100,000 m3/ day of wastewater from Viet Tri city, 30% of which is industrial wastewater. b. Current status of wastewater treatment technologies in industrial zones Major methods to treat industrial wastewater are: - Mechanical methods: are used in the case wastewater contains insoluble pollutants, components having different weight from the water weight, or large-sized particles. - Physicochemical methods: are applicable to the treatment of certain types of wastewater such as wastewater generated from plants containing chemicals: Use chemicals to neutralize chemicals, create suspension, precipitation, facilitate absorption exchange, etc. - Biological method: is one of the simplest methods enabling high efficiency and cost savings. This is still one of the most popular methods used for treatment of water polluted by organic substances: organic decomposition process enabled by anaerobic bacteria, aerobic, seaweed, algae, and fungi, etc. The aerobic biological method by oxygen bubbling has an advantage of being able to fully decompose wastewater into clean water, but it has a major disadvantage of high cost, large construction area and water loss during the microorganism aeration that must be run continuously without interruption, and the aerobic decomposition may not work well if the calculation of the amount of air needed to supply to the system is inaccurate. Currently the major industrial wastewater treatment technologies in Vietnam are activated sludge and biological filtration, in which aerobic treatment and anaerobic treatment are the most common forms. For wastewater having high pollution level, people often combine both anaerobic and aerobic treatment methods. In general, wastewater treatment systems in centralized industrial zones are designed in the same way, including the following stages: - Mechanical treatment: removing trash, sediment, etc., regulating the flow and concentration of wastewater. - Aerobic biological treatment (activated sludge) combined with denitrification (Nitrification and Denitrification): removing organic pollutants in wastewater. - Sludge treatment: reducing moisture of sludge before disposal in accordance with regulations.
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Through a survey on wastewater treatment lines currently operating in industrial zones, we can see some existing issues as follows: - Most contractors often design regulating tanks with a minimum capacity to reduce costs for the investors and increase more chances for the contractors to win the bid. Because of small capacity, these tanks could not regulate the flow and concentration of pollutants flowing to the wastewater treatment station. - Many wastewater treatment stations were designed and constructed with the spirit of reducing costs to the lowest level, so they lacked many important items such as laboratory; measuring, monitoring, controlling equipments; pumps, sludge press and backup generator. - In many places, the investor and the unit managing and operating the wastewater treatment station try to minimize operating costs, such as reducing energy costs, chemical use in operation, reducing the number of analyzed samples, avoiding operation of pumps and air blowers in rush hours, not adding chemicals (N, P, polymers, chlorine ...) in accordance with the required process. - Some wastewater treatment stations do not operate continuously 24/24 hours to save costs. Operation and maintenance of equipments in many places do not follow the right procedures. These activities lead to equipment breakdown, system malfunction, failure to meet performance of wastewater treatment, etc. - Many treatment stations have medium and large capacity, but they only have one sludge drying machine. There is no standby sludge drying ground. In fact, the sludge drying system is one of the stages most likely to experience problems, malfunctions at the wastewater treatment stations. Many sludge drying systems do not work. The issue of sludge transport and disposal in many stations has not drawn much attention. Many stations just sign a contract with units responsible for transporting and treating waste and hazardous waste to fulfill their obligation. - The management of sludge containing toxic substances such as heavy metals, oil and grease, organic matters which are undegradable... in combination with biological sludge is still common (Cu, 2010). 1.3.1.3. Mitigation measures and Technologies available for wastewater treatment a. Mitigation measures: According to the Orientation of Urban Drainage and Industrial Zones Development in Vietnam until 2025 with a vision to 2050 (enclosed with Decision No.1930/QD-TTg dated 20 November 2009), drainage systems must be built synchronously to ensure drainage of rain-water and wastewater from collection, transport and treatment for each area; a general drainage system must be built in combination with the separate sewer system, drainage system for industrial zones, high-tech zones, export processing zones and economic zones in basic urban areas (US Commercial Services, 2012). For urban areas, the Government has set specific targets until 2025 in which urban areas of Grade IV and above will have centralized household waster water collection systems and treatment stations; the rate of household wastewater collected and treated will reach 70-80%; post-treatment wastewater satisfies required standards; trade villages will have centralized or decentralized wastewater treatment stations which operate frequently and ensure quality of wastewater discharged to the environment in compliance with required standards. For industrial zones, the targets include: by 2015 and by 2020 respectively 75% and 95% of industrial zones, industrial clusters, export processing zones have qualified centralized wastewater treatment systems; 30% (2015) and 70% (2020) of urban areas of Grade IV and above have qualified centralized wastewater treatment systems (WHO, Health Ministry, and UNICEF, 2012). Proposed measures to realize the above targets are: - To finalize legal documents on water drainage; manage industrial wastewater pollution; address overlaps and gaps. To develop specific and clear procedures on responsibility and authority of environmental police, their
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cooperation with other agencies such as: inspectorate, local departments of environmental protection; and sanctions of violation treatment. - Cities directly under the central government develop and approve the master plan on the drainage system, define the system map, drainage basin, rain-water and wastewater receiving sources, and identify investment projects and investment periods. - ODA sources are given priority to use for investment, development of urban drainage systems; funds are mobilized from international and local organizations and individuals to invest in construction of drainage systems, especially wastewater treatment plants in various forms. - To develop programs, projects to enhance capacity of environment management staffs in the long term and systematically in combination with provision of facilities and equipments appropriate for monitoring industrial wastewater pollution. - To frequently examine enterprises‘ compliance with regulations. Besides, to provide enterprises with technical assistance to control pollution with the motto “prevention is better than cure„. - To formulate a set of indicators and norms specialized for various forms of production, industrial zones, high-tech zones in order to achieve accurate information about regulation complicance and violation cases, within the shortest time and at the least cost. To use biological instructions (especially for wastewater receiving sources), quick assessment methods, in combination with traditional monitoring methods. Apart from wastewater targets, it is neccessary to pay attention to examination and treatment of a wide range of smells, noises, sludge and solid waste from wastewater treatment stations. b. Technologies available for wastewater treatment There are many technologies for industrial wastewater treatment which have been applied and introduced by many firms for sale in Vietnam. Currently, there is no available summary report on the quantity, types, application places and efficiency of each technology, so it can be generalized that some technologies were or are being applied to treat industrial wastewater in Vietnam as follows: - Wastewater treatment technology using Biofor biological filtering tank (provided by Huy Hoang Environmental Technology Limited Company): Biofor filtering tank is a reactive tank for aerobic or anoxic biological processes which uses adhesive growth technology, applicable for urban and industrial wastewater treatment. - MBBR Technology (Moving Bed Biofilm Reactor) of Green Environment Technology Joint Stock Company is an artificial treatment process which uses objects as carriers for microorganisms to adhere to them for growing and developing, and is the combination of a traditional Aerotank and an aerobic biological filter. The advantage of MBBR technology is space saving and high effectiveness of treatment. - MBR Technology (Membrane Bio-Reactor) of PERSO Joint Stock Company: is a tank or biological equipment to treat wastewater which applies decentralized activated sludge technology in combination with microorganism-separating membrane filtration. This technology has been widely adopted in recent time in the world and for the last 5 years in Vietnam. - AAO & MBR Technology (provided by Viettronics MEDDA One Member Limited Company): This is a wastewater treatment technology using biological methods combined with membrane filtration to separate biomass and suspended matters. In this technology, AAO is the combination of many processes of organic pollution treatment by microorganisms in anaerobic, anoxic and aerobic conditions, resulting in more comprehensive treatment of organic pollutants in the water. MBR (Membrane Biological Reactor) is a technique of separating microbial biomass by membrane microfiltration with the dimension ranging between 0.1 and 0.4 µm. The combination of AAO and MBR technologies is a new way to treat wastewater to achieve high efficiency and environmentally friendliness; it can be used to treat industrial wastewater generated from beer, wine production, brickmaking units, hospital wastewater, domestic wastewater in urban areas, restaurants, hotels... CLEANTECH MARKET VIETNAM REPORT
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- Unitank Technology (provided by Green Environmental Technology Joint Stock Company): This is a process of artificial aerobic biological treatment in which biologically degradable organic matters are comsumed by aerobic microorganisms as nutrients for their growth and development. As a result, the microbial biomass increases while the pollution concentration of wastewater reduces. Air in the Aerotank tank is enhanced by air supplying equipments, e.g. surface aeration machines, air blowers... In this process, an anoxic tank is added to completely treat nitrogen in the wastewater to ensure that treated water could satisfy discharge standards. This technology integrates anoxic, aerobic and sedimentation processes into one treatment work, which helps save construction area and concrete volume, save energy, reduce operating costs, generate aerobic/ anoxic/ anaerobic conditions in the same cycle to enable best treatment of nitrogen compounds in wastewater. This technology can be applied to handle most types of wastewater having organic pollution in the industries of aquaculture, food processing and manufacturing, canned beverage, industrial wastewater, textile and dyeing... - Ozone Technology (provided by Clean Technology JSC or Lino Technology JSC): The industrial wastewater treatment method by using ozone machine has many advantages as ozone can decolorize, deodorize, kill bacteria and mold in a very effective way. Furthermore, wastewater discharged from the ozone machine does not generate secondary toxic products, so it could ensure standards of water discharge into the environment. If the secondary ozone treatment is added, wastewater will be ensured to tranform into clean water qualified for production and household activities. The application of the ozone technology also allows the system to operate stably at any temperature in Vietnamese climate conditions. The cost for ozone machines is also cheaper than that of other industrial wastewater treatment measures. 1.3.1.4. SWOT analysis of wastewater management Strengths: Large market, big demand. Lots of experience accumulated in selecting technologies to build drainage and wastewater treatment works in industrial zones. The increasing number of technical staffs and skillful workers to acquire technology transfer from foreign countries. Large labor market, high demand for jobs, cheap labor. Weaknesses: Limited capital sources Lack of well-trained employees, even including managers in state enterprises Low level of technological background Lack of enterprises which are capable of supplying high-quality wastewater treatment equipments and technologies Opportunities: Wastewater treatment is a priority issue of the Government and local authorities. The demand for high-quality wastewater treatment services has been increasing more and more. The legal framework has been improved more and more. The Government has clear orientation and specific targets on wastewater treatment for the period from now to the year 2050 The state budget for environmental protection has been increasing. Due to growing decentralization, local authorities have more jurisdiction and independence to make investment decisions. Threats: The legal framework in Vietnam is not close, unstable, and likely to change; low transparency, accountability, consistency, and incapability to make forecast.
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Execution effectiveness of legal documents is still weak; Examination and monitoring of the implementation of legal documents and violation treatment is not strict enough. Responsibilities of state agencies are not clearly defined, still overlapped or left open. The state administration system is quite complicated, slow-working, inconvenient and time-consuming. The issues of red tape and corruption still exist. Investment incentives are not attractive enough; The working performance of the public sector is low without high competitiveness. 1.3.2. Solid waste management Currently, data on solid waste generation are mainly collected for urban areas and industrial zones, while in rural areas, the amount of solid waste has not been fully counted. The amount of solid waste in Vietnam increased from 15 million tons (2005) to 28 million tons (2010), and 30 million tons (2011). This figure is forecasted to reach 36 million tons (2015) and 54 million tons in 2020 (MONRE, 2010). According to statistics in recent years, municipal solid waste covers the highest proportion, about 42-46% of the annual total solid waste while the second largest source is industrial manufacturing activity (about 17%). The remaining is solid waste from rural areas, trade villages and healthcare systems (about 37%). It is forecasted that by 2025, the proportion of municipal and industrial solid waste will continue to increase to 51% and 22% respectively. Regarding toxicity, hazardous waste accounts for 18-25% of the solid waste generated from each area (MONRE, 2011). Table 1: Solid waste generation in 2003 and 2008 (ton/year)
TYPE OF SOLID WASTE
2003
2008
Municipal solid waste
6‘400‘000
12‘802‘000
Industrial solid waste
2‘638‘400
4‘786‘000
21‘500
179‘000
6‘400‘000
9‘078‘000
Medical solid waste Rural solid waste Source: MONRE (2011)
1.3.2.1. Municipal solid waste management a. Generation and quantity: Generally, in urban areas, household solid waste, construction solid waste, and industrial solid waste account for about 60-70%, 10-15%, and 15-20% respectively, and the rest is medical solid waste... The amount of household solid waste generated in urban areas in the whole country increases by an average of 10% per year (MONRE, 2011). Municipal solid waste generated over the years is estimated as follows: 6.4 million tons (2003), 12.8 million tons (2008), 21 million tons (2010) (MONRE, 2011). The amount of municipal solid waste rapidly increases in big urban areas like Hanoi, HCMC, Da Nang City where the rate of urbanization and industrialization is high. In other urban areas, the amount of municipal solid waste do not increase much since the urbanization rate is not high. The amount of municipal solid waste in the two largest cities of the country is: Hanoi with 6,500 tons/ day and HCMC with 7,000 tons/ day. These two cities account for 45% of the total solid waste in the country. b. Municipal solid waste classification, collection and transportation: The classification at source has been applied in pilot scale in some cities such as Hanoi, HCMC, Da Nang. In Hanoi, the classification at source has only been applied in the last 3 years in 4 pilot wards, but so far this
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classification has not been widely implemented due to insufficient financial resources for equipment procurement, infrastructure investment and human resource mobilization for implementation, and especially because of habits of citizens. In most urban areas in Vietnam, waste from households is collected daily by Urban Environment Companies (URENCO) via small-sized rickshaws or trolleys and then transferred to transhipment dumps (Vo, 2006). From these dumps, waste is compacted by specialized waste compactors or put into containers and then transferred to centralized waste treatment sites (Figure 2). The waste collection rate in urban areas is about 83-85%. The collection rate in larger cities is higher than that in smaller cities. In Hanoi, the collection rate of the city’s districts is about 95% while it is only 60% for suburban districts. In HCMC, the collection rate is 9097%. In other cities like Hue, Da Nang, Hai Phong, the collection rate is approximately 90%. In most cities of Grade 2 and Grade 3, the collection rate in the city’s area reachs over 80%. Figure 2. Diagram of the waste collection, transport and treatment process
Source: Thanh and Matsui (2011)
The major component of municipal solid waste is organic matter, occupying 60-75% of the total waste volume. In the composition of waste transported to the landfills, the proportion of waste which can be used as raw materials for fertilizer production is 54 to 77.1%; followed by plastic with 8-16%; metal with about 2%; and the rate of hazardous waste included in household waste accounts for less than 1% (Vo, 2006). Currently, household hazadous waste is not collected and treated separately but mixed into household solid waste to transport to the landfills (Table 2).
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Table 2: Composition of household solid waste as inputs of landfills in some localities: Hanoi, Hai Phong, Hue, Da Nang, HCMC in 2009-2010
No. City type of waste
1
Organic waste
2
Hanoi (Nam Son)
Hai Phong Hue (Dinh Vu) (Thuy Phuong)
Da Nang HCMC (Hoa Khanh) (Phuoc Hiep)
53.81
57.56
77.1
68.47
62.83
Paper
6.53
5.42
1.92
5.07
6.05
3
Cloth
5.82
5.12
2.89
1.55
2.09
4
Timber
2.51
3.70
0.59
2.79
4.18
5
Plastic
13.57
11.28
12.47
11.36
15.96
6
Leather & Rubber
0.15
1.90
0.28
0.23
0.93
7
Metal
0.87
0.25
0.40
1.45
0.59
8
Glass
1.87
1.35
0.39
0.14
0.86
9
Porcelain
0.39
0.44
0.79
0.79
1.27
10
Soil – sand
6.29
2.96
1.70
6.75
2.28
11
Coal residue
3.10
6.06
-
0.00
0.39
12
Hazardous waste
0.17
0.05
-
0.02
0.05
13
Sludge
4.34
2.75
1.46
1.35
1.89
14
Others
0.58
1.14
-
0.03
0.04
15
Total
100
100
100
100
100
Source: MONRE (2011)
c. Reuse and recycling: Recyclable municipal solid waste such as paper, plastic, metals accounts for about 8-15%. These types of waste are first separated by households to sell to scrap dealers; the remaining is collected by waste pickers on the streets and also in the landfills. The recycling of waste products such as waste paper, waste plastic, waste metals in Vietnam is mostly handled by private sector and trade villages, and is a spontaneous activity. Approximately 90% of waste such as paper, plastic, metals are collected and recycled into products while only about 10% is disposed as waste. According to JICA estimates, the amount of recyclable solid waste such as paper, metal, plastic, etc. covers about 8.2% of the collected waste volume. In 2009, the specific figures for Hanoi, HCMC, Hai Phong, Da Nang, and Hue were 348 tons/ day, 554 tons/ day, 86.5 tons/ day, 56.7 tons/ day, and 16.9 tons/ day respectively (JICA, 2011). Construction waste accounts for about 10-15% of the municipal solid waste. Construction waste is often fully utilized to fill the hollows, pave the roads ... but in fact, in most provinces and cities construction solid waste is often collected and then discharged to vacant land by private entities under contracts. d. Treatment and disposal of municipal solid waste: Two solid waste treatment methods mainly applied in urban areas in Vietnam are landfill and combustion. Landfill Landfilled solid waste covers about 76-82% of collected solid waste. Currently, on average each urban area has 1-2 landfills, but over 85% of the landfills are not sanitary. Among 98 operating centralized landfills in large cities, only 17 sites are sanitary (WHO, Health Ministry, and UNICEF, 2011). In a majority of the other CLEANTECH MARKET VIETNAM REPORT
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landfills, waste is buried without sufficient care, often deodorized by spraying EM, periodically sterilized by spraying powdered lime and burnt when the waste is dry. It is estimated that about 50% of the waste taken to insanitary landfills is burnt in open air, causing serious pollution. The current popular waste treatment process in the dumps is that: every day URENCO garbage trucks dispose of waste into pits at the dumps. Then waste compactors spread evenly and compact waste tightly, and trucks sprinkle powdered lime on the surface of the dumping site for disinfection. After that two tankers spray EM to limit unpleasant smell. Finally, trucks are used to roll a thin layer of soil of 3-4 cm on the surface of the ground. Hanoi generates nearly 3,000 tons of waste per day, in which 60 tons of unrecyclable inorganic waste must be landfilled. Hanoi currently has 5 centralized waste treatment areas in operation, namely Nam Son, Tay Mo, Kieu Ky and Nguyen Khe (Dong Anh) ... but the landfills were not constructed in complicance with technical standards and three of them are nearly full and going to stop receiving waste. In HCMC, at present there are two landfills in operation and the third landfill is under construction in Phuoc Hiep solid waste treatment complex in Cu Chi District and will come into operation at the end of 2013. This new landfill can handle almost 6.5 million tons of waste in 9 years with an average capacity of receiving and treating 2,000-2,500 tons of waste/day. The third landfill is built and operated using KBEC Korea technology. In the whole country, there are only 25 landfills which no longer cause serious environmental pollution and 27 landfills which are under comprehensive pollution treatment. Currently, many provinces have neither sanitary landfills nor waste treatment plants. The waste treatment and disposal in these places is mostly in the form of landfill and combustion right at the insanitary landfills. Many landfills in urban areas are now overloaded. According to the waste management orientation, in the near future, solid waste treatment technologies in Vietnam will develop towards minimization of landfilled waste volume and increase in waste recycling and reuse. Waste combustion The waste combustion technology requires that waste to be burnt must have high calorific value and low moisture while typical characteristics of household waste in Vietnam are low calorific value and high moisture, so this results in high initial investment. However, the advantage of this technology is the use of very small land area and less pollution. Municipal waste combustion is mainly applied in insanitary landfills. After collection, waste is dumped in the landfills, sprayed EM to deodorize and sprayed lime periodically to disinfect and then burnt by oil when it is dry. However, during rainy season, wet waste can not be burnt or not completely burnt. It is estimated that about 40 รท 50% of waste taken to insanitary landfills is burnt in open air. The household waste combustion technology developed by the Center for Research and Application of New Technology and Environment (ENVIC) is currently applied in Xuan Son waste treatment plant in Hanoi with the capacity of 300 tons/day. A noticable advantage of this technology is its ability to reduce up to 90% of waste volume to be landfilled and the heat generated can be fully utilized for power generation with lower investment costs than imported technologies and equipments. The household solid waste combustion technology researched, designed and manufactured by Thang Long Environmental Services JSC is being applied in a waste combustion plant in Son Tay (Hanoi). This technology has been used since early 2012, and so far has treated more than 90,000 tons of waste, achieving nearly 85% of its designed capacity. Indicators of air emissions, odor, wastewater ... as well as the waste treatment process and system of this technological line has met environmental standards. Production of organic fertilizers or fuels The organic fertilizer production method is now being applied at Cau Dien Organic Fertilizer Factory in Hanoi and Nam Dinh. This is a Spanish technology which can receive and process 140 tons of waste per day. All
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procedures including selection, classification, refining and packaging are fully motorized and equipped with computerized machines to control the operation of equipments. According to the plant design, it can annually process 50,000 tons of household waste and produce 13,260 tons of organic fertilizers. However, as the waste in Hanoi has not been classified at source and the input waste contains high proportion of inorganic waste, the proportion of organic waste recovered has not met the project design. Currently, on average the plant processes about over 37,000 tons/year, and the collected amount of organic dust is approximately 8,000 tons/year. With this technology, waste is classified at the treatment facility; organic waste components are recycled into organic fertilizers by using aerobic or anaerobic composting technology. The technological line to produce combustion oil from plastic waste sources which was researched and constructed by the Institute of Building Materials has the capacity of 2.5 tons of oil/day. Post-treatment products include 15-25% treated gas to be used for combustion to provide heat for the pyrolysis furnace; 6065% liquid fuels composed of hydrocarbons similar as composition of gasoline, oil from petroleum; 5-10% coal ash. Combustion oil products with high calorific value (from 10,000 to 11,000 kcal / kg) will be a good fuel source to replace partially or 100% of DO and FO currently used in oil burning incinerators. The technology of producing fuel coal from waste which is researched and developed by Duc Minh Company has the capacity of solid waste combustion from 250 to 500kg/hour and the capacity of producing carbon coal from 250 to 300kg/hour. Fuels after treatment can be compacted into balls to transport over long distances. Coal has a high calorific value of over 4,000 kcal/kg. Those coal balls can be used well for boilers, industrial boilers, households... Other technologies on solid waste treatment An Sinh technology: this technology was developed by the ASC Engineering Joint Stock Company and is being applied in Thuy Phuong Waste Treatment Plant (Hue City). The technology enables regeneration of organic dust and recycling of plastic waste to avoid landfilling, hence reducing the landfilled waste volume to below 10%; recycled waste products are accepted by the market (Tran, 2012). SERAPHIN technology: The technology was developed by the Green Environment Development JSC; it can treat a majority of waste components: transforming organic matters into organic fertilizers and microbial organic fertilizers; transforming plastic waste into SERAPHIN plastic grains to produce some useful products such as formworks, drainage pipes, construction buckets, rubber bowls, bricks, stones, debris, sand, porcelain. The other contaminants are solidified under high pressure to create block bricks, traffic separators. This technology has won many medals and prizes at exhibitions in Vietnam, and was granted the exclusive patent right by the National Office of Intellectual Property of Vietnam. BETID Technology: The technology was researched by Binh Phuoc Environment Technology Investment and Development JSC and is now being applied in Dong Xoai waste treatment plant to separate, classify waste and produce organic fertilizers, block bricks. Advantages of this technology include local production of equipments, low cost, and simple operation. The technology is effective since organic fertilizers as output products could meet the demand of the rubber plantation area in the locality and neighboring areas. 1.3.2.2. Industrial solid waste management a. Generation and quantity: Industrial solid waste generated from industrial zones, high-tech zones, export processing zones, plants and factories includes two major types, i.e. normal solid waste and hazardous waste. According to the National Environment report, in 2010, the generated amount of industrial solid waste was 4,680 million tons (accounting for 17% of total solid waste); it was considered the second major source of waste generation followed by household waste. Industrial waste is mainly gathered in the key economic areas, industrial zones and developed urban areas. Approximately 80% of 4,680 million tons of industrial waste above came from large industrial centers in the North and the South. Approximately 64% of the country's industrial solid waste is generated from HCMC and neighboring provinces while 30% comes from areas in the Red River Delta and
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the North Central region. In addition, nearly 1,500 trade villages mainly locate in Northern rural areas and annually generate about 774, 000 tons of non-hazardous industrial waste. Currently, the three major economic regions account for 80% of total industrial solid waste, in which the largest source of waste is the South economic region. According to the forecast, the total solid waste generated from industrial zones in 2015 would be about 6 to 7.5 million tons/ year, and could reach 9.0 to 13.5 million tons in 2020. b. Collection: In industrial zones: most enterprises in industrial zones hire Urban Environment Company (URENCO) to collect household solid waste and non-hazardous industrial solid waste. Meanwhile, for hazardous solid waste, they often hire, hand over or sell waste to enterprises which have licence on hazardous waste transportation. According to a survey by the Industrial Policy and Strategy Institute, the collection rate of solid waste in industrial zones is over 90%. According to results of a survey by JICA (2011) on selection of waste collection forms, for non-hazardous industrial waste, most enterprises (74.2%) sign contracts on waste collection and treatment. The number of enterprises selling waste accounts for 18%; some enterprises crush solid waste into materials for heating. Solid waste of the thermal power industry: Most coal thermal power plants have dust collection systems (dry or wet). Coal residues remaining in the bottom of the furnace are collected together with fine dust and then transported to and stored in the dumps. Currently, some enterprises are using this solid waste as building materials, but the usage rate is still low. For instance, Pha Lai Thermal Power Plant has a solid waste dump of up to 5 million tons, accumulated over years. Solid waste of the oil industry: the majority of solid waste from offshore rigs is collected by PetroVietnam Technical Services Corporation (PTSC) by specialized ships (stored in specialized containers); the waste is collected weekly and brought to the shore. Solid waste in bauxite exploitation: Red mud is the biggest source of waste in bauxite exploitation and processing. Some countries treat the red mud by discharging into the sea or building a storage dam; one study shows that red mud can be used to make construction bricks. At present, plants in Tay Nguyen are applying the method of landfilling red mud in the reservoirs. c. Reuse and recycling: Currently, the majority of solid waste from industrial zones is classified, cleaned and processed into materials for recycling. Recycled products from industrial soild waste are mainly inputs of industrial production such as paper, plastic grains, metals (e.g. lead, copper, gold, silver, ...). Some other forms are processing of organic components in solid waste into microbial fertilizers, fuel production and combustion for power generation ... In the paper industry, enterprises mostly apply the water circulation technology to recover pulp, reduce wastewater, and reuse circulating water. In the metallurgical industry, the majority of solid waste in the form of residues is fully used, recycled to recover metals as building materials. Solid waste in bauxite exploitation: With 2 project clusters on bauxite exploitation for aluminum production in the Central Highlands, from 2015 each project cluster is estimated to generate 10 million tons of red mud and at the end of the project lifetime the amount of red mud will be 1.5 billion tons. Currently, Vietnam is applying the method of landfilling red mud in the reservoirs, while at the same time conducting studies on various options to treat red mud. The iron content in the dried red mud is relatively high, which is considered equivalent to the content in poor iron ore, with large quantities and can be used to produce cast-iron and steel. In 2012, Vietnam has piloted recovery of iron from red mud in industrial scale of 1-10 tons/ batch. As a result, the average efficiency of iron recovery is over 70%; furnace slags are qualified to produce clinker and non-fired building materials.
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Solid waste in mineral mining and processing is fully utilized to recover precious metals to use as building materials. The major solution to treat post-processing tails is dam construction. For solid waste of the oil and gas industry: Household waste is given to the Urban Environment Company while the industrial solid waste and hazardous solid waste is given to functional units for treatment. For solid waste of the shipbuilding industry: The collection and treatment of solid waste generated from the activity of cleaning the metal surface of the ship hull (sand, nix grains used to clean the metal surface), is implemented by adopting the method of spraying in closed chambers to make solid waste and sand fall to the floor of the chambers so it can be collected and landfilled. Solid waste of the beverage production sector: In these production units, fresh vinasse is sold for cattle breeding; broken bottles and plastic packages are sold to recycling facilities; household waste is collected and treated by the Urban Environment Company. d. Treatment and disposal of industrial solid waste: Currently, most URENCOs are incapable of treating industrial solid waste, especially hazardous industrial waste. These companies collect industrial solid waste mixed with household waste, transport waste to treatment facilities and general landfills of the urban area. The major treatment of municipal waste is currently landfill. Each urban area has 1-2 landfills. In particular, in Hanoi and HCMC, each city has 4-5 landfills or treatment facilities. The whole country has 98 centralized landfills; but only 17 landfills are sanitary, the remaining are primitive (MONRE, 2011). The method of industrial solid waste combustion has been recently applied in some areas. In Hanoi, there are 3 solid waste incinerators (for both industrial solid waste and hazardous waste). The incinerator in Nam Son (Soc Son) specializing in industrial solid waste treatment has the capacity of 200Kg/hr while the similar incinerator in Hung Yen has the capacity of 1000Kg/hr. The power production from industrial solid waste has also been implemented. Hanoi has a sample project named „Industrial waste treatment system for power generation in Nam Son Waste Treatment Complex, Soc Son, Hanoi“. The project is funded by NEDO – Japan with the total investment of $22.5 million. The expected capacity of the incinerator is 75 tons/ day. The incinerator can process many different types of waste such as rubber, leather, plastic, cloth, paper pulp, paint sludge, medical waste, and classified household waste... in conformity with Vietnam conditions. The project is expected to complete in 2014. When coming into operation, the project is expected to recover energy and generate power with the capacity of 1,930KW, which is enough for usage by about 1,500 households. This is the first waste-to-energy project in the Southeast Asia. 1.3.2.3. Hazardous industrial waste management a. Generation and quantity: Hazardous industrial waste accounts for about 15-20% of the total industrial solid waste [1]. The amount of hazardous waste from industrial zones in the South region is about 82,000 – 134,000 tons/year, 3 times higher than the North region and 20 times higher than the Central region. The Southern major economic region generates 64% of the total industrial hazardous waste of the whole country while the rest is generated from the Northern major economic region (31%) and the Central region. The light industry is the biggest source of hazardous industrial waste (47%), followed by the chemical industry (24%) and the metallurgical industry (20%) (MONRE, 2011). b. Collection and transport of hazardous industrial waste: The collection of hazardous industrial waste in industrial zones is implemented mainly by provincial URENCOs. The remaining amount of hazardous waste is collected and transported by licensed private companies. In Hanoi, the total amount of hazardous waste is about 97-112 tons/day; the collection rate is 60-70%. For hazardous solid waste, most enterprises (58.4%) chose the solution of “contracting for the waste collection or CLEANTECH MARKET VIETNAM REPORT
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treatment service�; no enterprises chose the solution of combusting, composting and landfilling waste by themselves; 37% of enterprises chose the solution of temporarily storing waste at their facilities. c. Treatment and disposal of hazardous industrial waste: By June 2011, the MONRE had issued 80 hazardous waste transport licenses and 43 hazardous waste treatment licenses to registered individuals and organizations. Most industrial hazardous waste collection and treatment enterprises gather in the South region. The amount of treated hazardous industrial waste has increased from 85,264 tons in 2008 to 129,688 tons/year at present, (increasing by 34%). According to the plan, by 2020, all the 4 major economic regions will build industrial solid waste and hazardous waste treatment zones. d. Hazardous waste treatment technologies: At present, all hazardous waste treatment technologies popularly applied in Vietnam are listed in Table 3 below; among them the most common technology is the static two-staged incinerator which accounts for more than 50% of the cases, and the rest includes solidification (betonization), landfill‌ (Table 3) Table 3: Common and typical technologies of hazardous waste treatment in Vietnam
No. Technology
1
Static two-staged incinerator
2
No. of applied facilities
No. of system modules
Capacity
23
28
50-1,000 kg/hr
Co-treatment in cement incinerator
2
2
30 tons/hr
3
Landfill
2
3
15,000 m
4
Solidification (Betonization)
19
19
1-5 m /hr
5
Treatment and recycling of waste oil
20
20
3-20 tons/day
6
Treatment of waste light bulbs
10
`10
0.2 ton/day
7
Treatment of e-waste
6
6
0.3-5 tons/day
8
Demolition, recycling of waste lead batteries
9
9
0.5-200 tons/day
9
Recycling of solvents
13
13
0.25-1.2 tons/day
10
Scouring of casks
15
15
600-1000 casks/day
11
Wastewater treatment
20
23
6-25 m /hr
12
Recovery of metals (Treatment of zinc slag, collection of metal salts)
4
10
0.1-1 ton/hr
3
3
3
Source: MONRE (2010)
Most licensed hazardous waste treatment technologies could ensure compliance with existing regulations, committed treatment efficiency when registering, and satisfaction of emission levels in accordance with the national technical standards on environment. However, the existing technologies in Vietnam are not modern ones; they are used as multi-purpose technologies to treat many types of hazardous waste and are applied in a small scale, but they do meet the demand for hazardous waste treatment. However, to effectively ensure the performance of hazardous waste management, it is necessary to develop technologies for hazardous waste treatment in Vietnam in terms of both quantity and quality.
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1.3.2.4. Medical waste management a. Generation and quantity: At the end of 2009, Vietnam had 13,640 hospitals of all scales with 21,980 beds. The amount of medical waste in 2008 was 490 tons/day, including about 60-70 tons of hazardous waste. The average growth rate of medical solid waste is 7.6%/year. It is forecasted that by 2015 and 2020 the amount of medical solid waste will be about 600 tons/day and 800 tons/day respectively (MONRE, 2010). (Meanwhile, in the National Environment Report 2011 the total amount of medical solid waste was 100-140 tons/day, including 16-30 tons of hazardous waste; on average the amount of medical solid waste is 0.86 kg/bed, including 0.14-0.2kg of hazardous waste/bed) b. Classification, collection and transportation: Health care is the first and the only sector which up to now has implemented the classification of solid waste at source. Most medical waste generated in the health care facilities directly under the MOH is collected and transported to storage zones and then treated at incinerators located in the facility or is transported to and treated in licensed waste treatment units operating in the area of the health care facility under service contracts. In local health care facilities managed by the Departments of Health, the collection, storage and transport of solid waste has not been emphasized, especially the classification and storage of waste at source. At present, 95.6% of the hospitals have realized waste classification, among which 91.1% have used tools to separate sharp pieces. 63.6% of the hospitals have used PE, PP bags. Only 29.3% have used appropriate thickwalled bags according to the regulations. In the transport of medical solid waste, only 53% of the hospitals have used covered vehicles to transport hazardous medical waste; 53.4% have shaded storage for solid waste‌ These are significant factors to ensure safety of patients and the environment. According to JICA (2011), among health care facilities of 5 typical cities including Haiphong, Hanoi, Hue, Da Nang and HCMC, most hospitals used plastic cans with wheels, rickshaws and other transport vehicles operated by hands. In some areas where the solid waste is stored before treatment at the site or in the outside treatment areas, air-conditioners and ventilation systems are equipped according to the Regulations (MONRE, 2011). c. Recycling and treatment of medical waste: At present, there is no agency specializing in procurement and recycling of waste generated from health care activities. Most localities do not have any recycling unit; therefore, the recycling of medical solid waste still encounters many obstacles. In most provinces and cities, non-hazardous medical solid waste is collected and transported by URENCO together with various types of household waste and is treated and landfilled in centralized solid waste treatment zones of the locality. Only the hazardous waste must be treated separately by combustion (MONRE, 2011). (See next section for further details). The MOH has developed an environmental protection plan for the period 2009 – 2015 with the goal of 100% of Central-level and private hospitals, 70% of provincial and sectoral hospitals, and 50% of district hospitals performing medical waste treatment in compliance with environment standards by 2015. 1.3.2.5. Hazardous medical waste management a. Generation and quantity: The amount of hazardous medical waste generated each day had increased from 40 tons/day in 2005 to 60-70 tons/day in 2008, 100 tons/day in 2009 and 140 tons/day in 2010.
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Hazardous medical waste is not generated equally in terms of quantity in each locality, but mainly concentrates in big provinces and cities. Provinces with the hazardous medical waste quantity of more than 500 tons/year are listed in the following order: Ho Chi Minh City, Hanoi, Thanh Hoa, Dong Nai, Vinh Phuc, Da Nang, Khanh Hoa, Thua Thien Hue, An Giang, Can Tho, Nghe An, Phu Tho, Hai Phong, Long An. If hazardous medical waste is classified in terms of location, then 35% of hazardous medical waste is generated in Hanoi and HCMC while the remaining 65% is from other provinces and cities. In the other hand, if hazardous medical waste is classified in terms of areas in provinces and cities, then 70% of hazardous medical waste concentrates in provinces, cities, towns which belong to urban areas while 30% is generated from rural and mountainous districts and communes. b. Treatment of hazardous medical waste: Among 36 hospitals under the MOH, the total amount of hazardous medical waste that needs to be treated in a day is 5,122 kg, accounting for 16.2% of the total amount of hazardous medical waste. Among this, the average amount of hazardous medical waste per bed is 0.25 kg/bed/day. Four hospitals having radioactive waste are Bach Mai Hospital, Hue Central General Hospital, Thai Nguyen Central General Hospital and K Hospital. The hazardous medical solid waste accounts for 22.5%, among which the majority is contagious solid waste. The rate of treated hazardous medical solid waste satisfying standards is 68% of the total hazardous medical solid waste generated nationwide while the remaining 32% does not meet the standards, causing environmental pollution and negative impacts on the community health. Big cities like HCMC and Hanoi have already had treatment plants for hazardous medical solid waste which are in good operation and perform the collection, treatment and disposal of hazardous medical solid waste for all health care facilities in the area. Hazardous medical solid waste generated in other provinces and cities is currently treated and disposed at various levels. Some localities like Thai Nguyen, Ha Phong, Can Tho have well utilized incinerators in hospital clusters, actively transferred the incinerators to URENCOs to operate, collect and treat hazardous medical solid waste for the whole province or city. Some big cities have arranged a centralized incinerator for hazardous medical solid waste in the general waste treatment zone of the city. The rate of decentralized incinerators for hazardous medical solid waste in good operation is only approximately 50% of the incinerators constructed, even only 20% in some regions (MONRE, 2011). Different types of incinerators for hazardous medical solid waste used in some big cities are as follows: In Hanoi, the DEL-MONEGO medical waste incinerator with the capacity of 200 kg/hr in Cau Dien is operated by the URENCO to treat medical waste generated in the area of Hanoi. In Da Nang, the HOVAL incinerator with the capacity of 200 kg/hr in Khanh Son Solid Waste Treatment Plant is operated by the URENCO to treat medical waste generated in the city’s area. In HCMC, two HOVAL incinerators with the capacity of 150 kg/hr and 300 kg/hr located at the Medical and Industrial Solid Waste Treatment Factory are operated by the URENCO to treat hazardous medical waste from health care facilities inside and outside the city. Health care facilities directly under the MOH have a significantly higher level of investment in hazardous medical solid waste treatment than those in the localities. For health care facilities at the provincial level, medical solid waste is mainly treated under service contracts. For health care facilities at the district level, the treatment of medical waste is conducted in various forms and is difficult to control. Most the district hospitals and a part of the provincial hospitals still adopt the method of landfilling hazardous waste inside their locations or together with the common waste dump of the locality. Among 80 health care facilities in the list of facilities which have to perform
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comprehensive pollution treatment, many still contract for hazardous waste treatment or treat the waste by using a one-chamber incinerator (MONRE, 2011). Hazardous medical waste combustion technology: At present, the whole country has about 200 incinerators in operation; among them the modern ones meeting environmental standards gather in the central-level hospitals. These incinerators use a specialized combustion technology with the temperature of 800 to 1,200 degrees Celsius to burn medical solid waste. The rest are small and medium-capacity incinerators, which serve for waste treatment at the site or for hospital clusters. The general trend of the world currently is to eliminate the combustion technology as it can generate non-degradable substances like dioxin, furan, or others, so the pollution risk is very high. Thus, in Vietnam, many hospitals have stopped using these medical waste incinerators. Two main types of environmentally friendly technologies chosen to replace medical waste incinerators are autoclave technology (sterilization by moisture heat) and microwave technology. Among them, the technology using microwave in combination with saturated water vapor is the most advanced technology up to now thanks to its high efficiency of sterilization and fast treatment; it is now being used in the Vietsopetro Vung Tau Health Center. Recently, the MOH has invested in 6 pilot incinerators using the technology of “Microwave combined with saturated water vapor” in a number of hospitals having high rate of hazardous medical waste such as: Central Lung Hospital, Central Tropical Hospital. The advantage of this technology is to produce heat inside microorganisms, so it can kill a large number of bacteria in a short period of time, save energy and reuse common waste as well as some hazardous sharp waste by steaming and grinding… This technology is included in an investment scheme developed by the MOH for some big hospitals like Bach Mai Hospital, Viet Duc Hospital… The initial investment for a non-smoke incinerator using the “microwave combined with saturated water vapor” technology is about 5 billion VND. 1.3.2.6. Mitigation measures and Technologies available for solid waste treatment In order to mitigate solid waste, Vietnam is now applying the following solutions: Table 4: Waste mitigation measures
1.
Preventing and minimizing solid waste generation Reducing the government’s subsidies in solid waste collection, transportation and treatment; applying various fees accordingly to the amount of the solid waste generated. Minimizing municipal solid waste generation by encouraging sustainable and Environmentally friendly consumption and behavior, promoting programs to encourage using recycled products. Reducing industrial waste by implementing “Clean and Environmentally Friendly Production Program”, namely applying ISO environmental standards at industrial facilities. Minimizing solid waste in trade and services areas Closely monitoring scrap importation
2.
Waste separation at source of generation Encouraging community participation in implementing waste separation at the source of generation Developing collection and treatment facilities for different types of waste after Separation
3.
Increase waste reuse and recycling Encouraging reuse of solid waste
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Developing solid waste market Developing recycling industry Encouraging to buy and use recycled products Developing incentives measures related to financing, tax and land policy for recycling activities as provided in the Article 68 of the Law on Environment Establishing recycling funds with contribution from the Government, community and enterprises to facilitate R&D activities and recycling 4.
Increase waste collection and transportation Increasing capability in solid waste collection and transportation Developing waste collection network Strongly encouraging private sector participation in solid waste collection and Transportation
5.
Waste Treatment Developing a legal framework for waste treatment Applying appropriate advanced technologies at waste treatment facilities
6.
Recover the environment of waste treatment facilities Formulating legal documents, guidelines for implementing this task Raising finance for environment recovery
Source: Ngo (2008)
1.3.2.7. SWOT analysis of solid waste management Strengths: The legal framework for waste management is built in a relatively modern way and the important components involving waste management are all clearly defined. The regulations on waste management include all solid waste standards similar to the regulatory systems applied in developed countries. Solid waste management covers major and sensitive subjects in waste management, e.g. municipal solid waste, industrial solid waste, medical solid waste, hazardous solid waste. Solid waste management involves participation of international donors. The Government has developed target programs and measures to orient priority activities at both central and local levels. The function of solid waste management has been transferred to the only one managing body which is the Ministry of Natural Resources and Environment (MONRE) while the role of Vietnam Environment Administration in this task is relatively clear. The bodies performing the environment management function at the national, ministerial/sectoral, and local levels have good awareness of waste treatment. The development of a waste collection and recycling market favorably facilitates the full utilization of waste materials as the secondary material source. Some project activities related to waste mitigation and pollution prevention such as classification at source, collection, recycling, and application of waste treatment technologies have been successful and can be widely replicated. CLEANTECH MARKET VIETNAM REPORT
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Weaknesses: The assignment of responsibilities among the ministries at the central level and the departments and divisions at the local level is still inappropriate, containing overlaps, and may be inconsistent among different localities. The execution of legal environmental documents, practical enforceability of legal regulations, inspection and supervision of solid waste management is still weak. The capacity and responsibilities of solid waste management have been neither clearly defined, nor centralized nor fully promoted at all administration levels. The technical infrastructure for waste collection, transport, classification, recycling and treatment is still incomplete and has not worked in an optimal way. There is a lack of high-skilled experts, experienced technicians and specialists in solid waste management. There are many existing problems in the collection, storage and processing of data and information serving for solid waste management among administration levels and localities. The consciousness and awareness about solid waste management among the community is not high; there are many shortcomings in environmental education and communication. There is a lack of efficient tools in hazardous solid waste management and solid waste mitigation and prevention. Municipal solid waste management is not comprehensive (mainly concentrating on landfills). Opportunities: The environmental awareness has been improved from the leaders of different levels to the citizens; Waste management has attracted more and more interest from the international community; foreign investment sources have become more and more comprehensive, diversified and focused on urgent needs of Vietnam; The Government has issued many policies, measures, national programs with clear targets on waste management, with many policy tools to support waste management, from waste mitigation to waste classification, collection, reuse, recycling, treatment and disposal. The development in terms of quantity and quality of enterprises in the waste management field, in both public and private sectors. The development prospect of trade and service sectors related to solid waste management (collection, classification, transport, processing, treatment, technical assistance, technology transfer…) helps create a business market for local and international environmental enterprises; The remarkably increasing demand for using waste as material sources for the waste recycling industry, organic fertilizer production, power generation, construction materials… Threats: There is a lack of investment capital sources, either from the state budget or environmental protection funds or the private sector; FDI, ODA sources tend to decrease, partially due to the world economic crisis or the unattractive investment environment. Low-quality technical infrastructure which is inconvenient for waste collection, transport and treatment; Many waste treatment systems were built but did not work well due to insufficient research of the market context in advance, resulting in lower confidence of local customers.
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 The rapid population growth and the high rate of industrialization and economic growth lead to an increase in solid waste generation and cause a high pressure on the present waste collection, classification, transport, and treatment systems.
1.4. PROSPECTS 1.4.1. International cooperation policy and governmental priorities a. International cooperation Vietnam has an open policy for international cooperation in the environmental sector. Since the establishment of MONRE, international cooperation has been always emphasized and facilitated by the ministry in activities related to natural resources and environment. These efforts have remarkably contributed into the increasing investment and support from international donors and partners in the environmental sector of Vietnam. As affirmed in the National Environment Report 2011 by MONRE, ODA is a significant capital source for environmental projects in Vietnam in general and for solid waste management projects in particular. Japan International Cooperation Agency (JICA), World Bank (WB) and Asia Development Bank (ADB) are the key donors for solid waste management projects in Vietnam. The country has also received bilateral financial support from other countries to implement local projects and programs on solid waste management such as Sweden, Switzerland, Spain, Canada, the United States, South Korea, etc. These sponsored projects and programs cover a wide range of aspects, e.g. urban environment improvement and planning, formulation of solid waste management strategies, plans, pollution control and municipal solid waste management. However, among the existing international cooperation activities, there is a gap for investment in hazardous waste management and treatment in Vietnam that international technological and service providers should take into account while developing new business in the country (MONRE, 2011). Some examples of projects sponsored by international organizations in the waste management sector are: - The JICA funded project on construction of a wastewater treatment system to serve for seven districts in Hanoi (USD 740 million, to be implemented in Thanh Tri district, Hanoi from 2013 to 2020) (Vietnamnews, 2013); - The Urban Water Supply and Wastewater Project for Vietnam funded by World Bank (USD 236.2 million, implemented in Vietnam from 2011 to 2016) (World Bank, 2011); - The Hospital Waste Management Support Project funded by the International Development Association (USD 150 million, implemented in Vietnam from 2011 to 2017) (World Bank, 2011); - Projects in industrial waste management and in municipal separated drainage in Vietnam funded by the Global Infrastructure Basel (USD 250 million, to be implemented in Danang city from 2013 to 2018) (Global Infrastructure Basel, 2013) - Project on Wastewater and Solid Waste Management for Provincial Centers funded by KfW Entwicklungsbank (implemented in 9 cities in Vietnam from 2005 to 2014) (GIZ, n.d). b. Governmental priorities In the last few years, the government of Vietnam always shows interest in the socio-economic development integrated with environmental protection and improvement to ensure the country’s sustainable development target. However, as a result of the socio-economic development, there are a number of emerging environmental issues as follows: (1) The development of industrial zones and clusters is not synchronous with the current environmental technical infrastructure conditions. Many industrial zones and clusters do not have centralized wastewater treatment systems, resulting in serious environmental pollution. (2) Mineral exploitation activities in many localities are not strictly managed, causing environmental pollution CLEANTECH MARKET VIETNAM REPORT
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hotspots. (3) The collection and treatment rate of solid waste, medical waste, household wastewater and industrial wastewater is still low. Waste generated from agricultural production and household activities of people living in rural areas is not appropriately and hygienically collected and treated. (4) Pollution in trade villages is difficult to control, address and overcome, and some places have experienced serious pollution. (5) The situation of backward technologies and waste materials imported into Vietnam is really complicated. These issues were raised in the recent Resolution of the Government No.35/NQ-CP dated 18 March 2013. To address the issues, the government has requested the ministries, line ministries, governmental agencies and PCs of provinces and cities directly under the central government to direct and implement a number of priority tasks and measures. Among these, waste management related activities are also emphasized as priorities for implementation in the coming period. Below is summary of the major measures proposed in the Resolution. (1) Enhancing environmental protection in industrial zones and clusters and improving appraisal quality of environmental protection in development strategies, planning, and projects: It is regulated that the plants and projects in the industrial zones and clusters are constructed only after these zones, clusters have centralized wastewater treatment plants to ensure full treatment of total wastewater generation in compliance with the existing environmental technical specifications. (2) Focusing on environmental protection in mineral exploitation activities. (3) Concentrating on pollution mitigation, environmental improvement of rural areas and trade villages: It is required to have specific measures to effectively deal with environmental pollution caused by solid waste in rural areas and breeding activities; give priority to arrangement of land areas for construction of waste and wastewater treatment facilities, environmental infrastructure. (4) Strongly directing the implementation of environmental pollution mitigation in large cities and river basins: It is required to research and develop the national program on wastewater investment and treatment, first focusing on big urban areas and river basins, following an appropriate roadmap; direct the effective implementation of the approved investment program on solid waste treatment and the master plan on medical waste treatment. (5) Strictly controlling the importation of waste materials in the country. (6) Enhancing efficiency and effectiveness of state management in environmental protection (EP): This task is realized through improving the legal and institutional system on EP, increasing the state budget allocated from development investment for EP activities, developing policies to encourage socialization and attract resources for EP, enhancing EP communication and education, encouraging science and technology research to serve for EM purpose and facilitate waste treatment technology transfer, etc.
1.4.2. Prospects of the market in 2013 and beyond According to the Report on Vietnam Economy Status in Quarter I/2013 by the National Financial Supervisory Commission (2013), it is recognized that the economy in Vietnam has experienced positive changes in the first three months of the year 2013. The macro-economic environment continues to remain stable with inflation under control and the CPI of the Quarter I has been the lowest rate since 2009. The quarter‘s growth rate was higher than that in the same quarter of the previous year with the recovery of the contruction sector and the improved real estate market. There were also positive signs of the manufacturing sector. The country’s trade balance has achieved surplus. Besides, the exchange rate is stable, and the foreign currency reserves have been clearly improved. Liquidity of the banking system is abundent, and interest rates tend to decrease. International ranking organizations have provided more positive assesments on the Vietnamese economy CLEANTECH MARKET VIETNAM REPORT
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while the economic risks tend to decrease. FDI sources entering Vietnam have increased by 11.5%. In addition, the National Financial Supervisory Commission forecasted that in the case there was no sigificant changes in the growth tendency in the last three quarters of the year 2013, the country would be able to achieve the economic growth of about 5.3% for the whole year and the annual inflation rate of 6-7%. During the current world economic crisis, these figures are positive signs for economic development in Vietnam in 2013 and the coming years. Along with economic development, industrialization, urbanization and population growth, the generation of waste will certainly increase. This is the basis for international investors and enterprises to consider entering Vietnam market for new businesses in environmental and waste management sectors. Besides, in 2013 and the years beyond, Vietnam will continue to promote environmental protection in general and waste management in particular through implementation of the following strategies and programs: the National Strategy on Waste Management towards 2025 with a vision to 2050 issued in 2009; the orientation of urban drainage and wastewater treatment towards 2025 with a vision to 2050 issued in 2009; the program on solid waste treatment investment in the 2011 – 2020 period approved in 2011; and the National Environmental Protection Strategy towards 2020 with a vision to 2030 issued in 2012. These strategies and programs enable waste treatment and management efforts in the whole country from the central to the local levels and also encourage investment and participation in waste treatment and management from both domestic and international investors as well as from public and private sectors. In addition, MONRE is now finalizing the draft amended Environmental Protection Law to submit to the Prime Minister for approval (Xuan, 2013). This new legal document include improvements of the old law and addition of new issues such as environmental planning, environmental impact assessment, sea and ocean environment protection, trade village environment protection, waste management, environment inspection and examination, environment pollution, etc. The issuance of the new law on environmental protection is expected to effectively promote and facilitate all efforts to tackle environmental issues in Vietnam including waste management. At the local level, each province or city has also developed its own plans, strategies, programs, and projects to address environmental issues in its locality in accordance with the government’s overall policy and legal framework on environment. For instance, in Hanoi, the city People’s Committee is now developing a scheme on household waste collection and management in the city’s suburban districts as a basis to formulate mechanisms and policies to implement priority projects to manage household waste treatment in these districts towards the year 2020 (Thai, 2013). Meanwhile, in March 2013 HCMC People’s Committee has agreed to cooperate with the authority of Osaka City (Japan) to implement a number of programs on environmental protection including: the program on solid waste classification at source, 3R action program (reduce, reuse, and recycle), the program on energy recovery from waste, the training program to enhance management capacity for environmental managers, and the program on wastewater treatment and water supply treatment (Nguyen, 2013). Ninh Binh PPC has just approved the Solid Waste Management Planning towards the year 2030 for the province since April 2013 in which the provincial authority plans to strive for the goal in which by 2030 all solid waste generated would be collected, reused, recycled and comprehensively treated by adopting advanced and environmentally friendly technologies appropriate for the actual conditions of the province (Decision No. 245/QD-UBND). In late May 2013, Ha Nam province also issued the regulation on management of household waste collection, transport and treatment in the province’s area to improve performance of their waste management activities (Decision No. 26/2013/QD-UBND). These examples illustrate current efforts of localities to address the issue of waste management in practice. In the next section, a list of projects calling for investment in the waste management and treatment sector will provide more evidence to emphasize develoment protential and business prospects of this sector in Vietnam.
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1.4.3. List of projects calling for investment No.
Project Name
Capacity
Project Location
1
The industrial and hazardous waste treatment and recycling project with the area of 15 ha in Da Phuoc Waste Treatment Complex
500 tons/day
Da Phuoc Waste Treatment Complex, Binh Chanh District, HCMC
N/A
N/A
N/A
2
The construction project of a safe hazardous landfill with the area of 6.3 ha in Phuoc Hiep Waste Treatment Complex
100 tons/day
Phuoc Hiep Waste Treatment Complex, Cu Chi District, HCMC
N/A
N/A
N/A
3
The construction project of the city’s overall industrial waste management complex in Phuoc Hiep Waste Treatment Complex
200 - 360 tons/day
Phuoc Hiep Waste Treatment Complex, Cu Chi District, HCMC
N/A
N/A
N/A
2,000 tons/day
HCMC
2013-2015
280
N/A
The project on a hazardous waste treatment plant 2,000 tons/day in HCMC
HCMC
The project on a waste-to-energy combustion plant in HCMC
Expected Total Implementation Investment Time (million USD)
Investment Form
Data Source
Ha, 2013
Ha, 2013
Ha, 2013
Van, 2013
4 5
6
The construction project of solid waste treatment plants in Thai Binh province
7
The construction project of water drainage and waste treatment systems in 7 towns of 7 districts of Thai Binh province
8
The investment project on a household waste treatment plant
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N/A
N/A
Thai Binh province, Dong Hung district, Kien Xuong district
7 towns of 7 districts of Thai Binh province
1,000 tons/day Vinh Tan commune, Vinh and night (Phase Cuu district, Dong Nai 1: 500 tons/day province
2013-2015
100
N/A
Van, 2013
2009-2015
Thai Binh Provincial ODA/FDI/Joint 6 mil USD/plant Planning and venture Investment Department, n.d
2009-2015
Thai Binh Provincial ODA/FDI/Joint 2 mil Planning and venture USD/system Investment Department, n.d
N/A
N/A
FDI
Dong Nai Provincial People’s
and night) 9
The construction project of a centralized medical waste treatment plant with modern technologies
10
The project on a solid waste collection and treatment zone in Ha Long city – Cam Pha – Hoanh Bo
11
The project on a household waste treatment plant in Bac Giang city with the area of 140,000 m2
12
The project on a medical waste collection and treatment plant with the area of 5 ha
13
The construction project on a solid waste treatment project in Yen Bai city
14
The construction project on a wastewater drainage and treatment in Yen Bai city
15
The construction project on a municipal water drainage and wastewater treatment Nghia Lo town - Yen Bai province
16
The investment project on a waste treatment plant with the area of 30 ha
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20 tons/day
Committee, 2012 Can Tho city
1,000 tons/day in Hoanh Bo district, Quang 2020 Ninh province
N/A
Da Mai commune, Bac Giang city
N/A
Thuan Nam district, Ninh Thuan province
N/A
Van Tien commune, Yen Bai city,Yen Bai province
N/A
Yen Bai city, Yen Bai province
N/A
Nghia Lo town, Yen Bai province
N/A
Van Tien commune, Yen Bai city, Yen Bai province
N/A
2013-2014
N/A
N/A
2011-2015
2011-2015
2011 - 2013
2011-2015
22.6
150
N/A
FDI/Joint venture
Can Tho Television, 2013 Quang Ninh Investment Promotion Agency, 2013
N/A
N/A
Bac Giang Provincial People’s Committee, 2013
952
Local/FDI/Joint venture
Ninh Thuan Economic Development Office, 2013
10
ODA: 9 mil USD
Yen Bai Provincial People’s Committee, 2013
21.2
ODA: 11.9 mil USD
Yen Bai Provincial People’s Committee, n.d
4.2
ODA: 3.8 mil USD
Yen Bai Provincial People’s Committee, n.d
8.7
FDI
Yen Bai Provincial People’s
Committee, n.d 17
The investment project on a waste treatment plant with the area of 30 ha
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N/A
Nghia Phuc commune, Nghia Lo town, Yen Bai province
2011-2015
3.7
FDI
Yen Bai Provincial People’s Committee, n.d
1.5. RECOMMENDATIONS FOR SWISS INDUSTRIES AND SERVICES 1.5.1. Market potential and opportunities As discussed in previous sections, the demand for waste treatment in Vietnam is relatively high. The annual generation of about 1.5 billion m3 of wastewater and 30 million tons of solid waste in all over the country and the tendency of increasing volume of waste over years as a result of population growth and socio-economic development indicate a noticeably great potential for the growth of waste related businesses in the country. It is also supported by the sound legal framework and favorable policies of the government of Vietnam to encourage investment in and implementation of waste management and treatment projects in the country. In terms of wastewater treatment, there are clear opportunities for both local and international investors. First, since the current number of wastewater treatment factories in Vietnam is very limited and they are mainly located in big cities or provinces, e.g. Hanoi, HCMC, Da Nang, there is an urgent need to construct more wastewater treatment facilities in other urban areas of the country to meet the increasing demand for municipal wastewater treatment. Investors or finance providers could invest in these construction projects. Second, to ensure operation performance of these facilities, the provision of appropriate and advanced technologies and equipments for wastewater treatment is certainly required. Technologies and products imported from foreign countries including those from Switzerland which can ensure environmental protection and treatment efficiency can be introduced to the country. In addition, the demand for water drainage and wastewater treatment is also recognized in healthcare facilities, trade villages, slaughter-houses, manufacturing units, and industrial zones. Thus, it is a favorable condition for international technological and equipment providers in the field of wastewater treatment to enter Vietnam market. Regarding solid waste treatment, many business opportunities can be found as well for foreign investors, either in the form of construction of solid waste treatment facilities or supply of equipments and technologies to treat solid waste. The rate of recyclable solid waste in Vietnam is still modest, so international investors should consider investing in this field. The two popular solid waste treatment methods in Vietnam are landfill and combustion which are backward technologies likely to cause negative impacts on the surrounding environment, so there is a demand for modern and environmentally friendly treatment technologies for solid waste in Vietnam. It is significant especially because the landfills in urban areas in Vietnam are mostly overloaded. Although local producers and technological providers have developed various technologies to treat solid waste, this is still a small quantity compared to the increasing amount of for solid waste generated daily in Vietnam, so it is an opportunity for international businesses to introduce their advanced products and services to this country. Consultancy service in waste management is another business that can work well in Vietnam market. More and more local enterprises have paid attention to waste treatment in their facilities to ensure compliance with environmental regulations. The expertise and experience of consultancy firms in waste treatment technologies and waste management could help these enterprises select the best solutions to address the issue of waste treatment and management in their facilities. Training and technology transfer are other services that could be enclosed with provision of waste treatment equipments. These are potential business opportunities for foreign companies in Vietnam market.
1.5.2. Market entry a. Market entry strategies To enter Vietnam market on waste management and treament, there are a number of entry strategies that foreign enterprises could adopt. During the first period of time entering Vietnam market, foreign enterprises could directly export their products to the country to sell to their customers without setting up their presence in the local market. In this way, enterprises could save investment cost while being able to actively manage their business transactions
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with local customers, protect their trademarks, patents and copyrights, receive direct feedbacks of customers in a shorter time and explore the marketplace. If the enterprises indirectly export their products through an intermediary, then they will not have to take charge of payment collection or handle export logistics to deliver their goods to overseas customers. Suppliers of waste treatment equipments could follow that strategy as their first entry to Vietnam. When business of foreign enterprises grows in Vietnam market with increasing acceptance of local customers for their products and services, the more effective entry strategy should be establishment of their presence in Vietnam through a representative office or a branch company to enable business expansion or direct investment in new business activities in the country. For instance, enterprises could invest in construction of new waste treatment facilities in urban areas of Vietnam. For this entry strategy, a strong finance is required. Foreign enterprises could also consider cooperating with local partners in the form of joint venture to do business in Vietnam to reduce investment cost. With this strategy, foreign enterprises could take full advantage of the local companies‘ infrastructure and resources for the business and avoid possible risks of investment in a new market abroad. b. Trading success factors To succeed in the waste management and treatment market in Vietnam, foreign enterprises should consider the following factors: - The need for a good understanding of Vietnamese business environment in general and the local market of waste treatment and management. - Identification of the targeted market or customer group. - Development of good partnerships with local stakeholders in the waste management sector. - The appropriateness of their products or services to Vietnamese conditions and their competitive advantages over other international and local rivals in the market. c. Risk factors There are a number of risk factors that foreign enterprises specializing in waste treatment and management fields may encounter when entering Vietnam market: - Limited information about and accessibility to waste treatment projects managed by the governmental agencies. - Administration procedures to get investment license for waste treatment projects in Vietnam may be timeconsuming or investors may experience difficulties to get project approval. - Low acceptance of local market for their products and/or services due to high prices compared to those provided by their local competitors. - For European equipment suppliers, their products may not work appropriately in the climate conditions of Vietnam. - The impact of the world economic crisis on Vietnam resulting in possible fluctuations of exchange rates and inflation rates which negatively affect their business. 1.5.3. Recommendations for Swiss investors/exporters a. For Swiss investors Because of the increasing demand for waste treatment in Vietnam, Swiss investors could invest in projects on waste treatment plants in the country either for treatment of wastewater, solid waste or other types of waste in urban areas, industrial sector, health sector, etc. Strong finance, advanced technologies, and management
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experience in waste treatment sector can be competitive advantages of Swiss investors over local competitors to approach these projects. To ensure investment success, the projects should be carefully pre-assessed in terms of socio-economic and environmental impacts as well as possible risks during investment and implementation. Swiss companies should develop relationships with local partners to facilitate their business as well. In the case they do not want to fully invest in waste treatment projects in Vietnam, they could consider providing technical consultancy services for local investors in these projects. b. For Swiss exporters Swiss exporters could export their waste treatment products to Vietnam market in a direct or indirect way. These products should be of advanced technologies and environmentally friendly to satisfy the host country’s technical regulations on environmental protection. To help local technicians master these technologies, Swiss technological providers should conduct training or enable technology transfer if required. A thorough research of Vietnam market is also a significant requirement to effectively facilitate the entry of Swiss enterprises and introduction of their products to Vietnam. When they achieve a certain market share in Vietnam, these enterprises could consider establishing their branches in the country to further expand business. A joint venture is another potential business model that could enable Swiss companies to start business in Vietnam; in this case, they could make full use of local partners’ existing resources and distribution network to approach local customers.
1.5.4. Directory of useful contacts a. Regulatory bodies/Government organizations: Ministry of Natural Resources and Environment – MONRE: Policy & National plan on Natural Resources and Environment, key responsibility for waste management regulations and activities in the whole country. http://www.monre.gov.vn/ Key departments, agencies under MONRE engaging in waste management tasks: Vietnam Environment Administration – VEA: http://www.vea.gov.vn Institute of Strategy and Policy on Natural Resources and Environment – ISPONRE: http://www.isponre.gov.vn/ Vietnam Environment Protection Fund – VEPF: http://www.vepf.vn Ministry of Industry and Trade – MOIT: Policy & National plan on Industry and Trade, responsibility for waste management in the industrial and trade sectors. http://www.moit.gov.vn/ Ministry of Construction – MOC: Policy & National plan on Construction, responsibility for waste management in the construction sector and construction of waste-related facilities. http://www.moc.gov.vn/ Ministry of Health – MOH: Policy & National plan on Health, responsibility for medical waste management in the healthcare system and assessment of impact of waste generation on human health. http://www.moh.gov.vn/ Ministry of Transport – MOT: Policy & National plan on Transportation, responsibility for overseeing the URENCOs. http://www.mot.gov.vn/ Ministry of Planning and Investment – MPI: Overall planning of investment and ODA assistance for waste management projects. http://www.mpi.gov.vn/ CLEANTECH MARKET VIETNAM REPORT
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Ministry of Science and Technology – MOST: Policy & National plan on Science and Technology, responsibility for management of technologies and standards for waste treatment in the country. http://www.most.gov.vn/ Ministry of Agriculture and Rural Development - MARD: Policy & National plan on Agriculture and Rural Development, responsibility for waste management in the agriculture sector. http://www.agroviet.gov.vn/ b. State Owned Companies: Vietnam Natural Resources and Environment Corporation – VINANREN: Provision of products and services in projects related to natural resources and environment. http://www.vinanren.vn/ Urban Environment Companies– URENCOs: Waste collection and treatment in cities Hanoi Urban Environment One Member Limited Company: http://www.urenco.com.vn/ Ho Chi Minh City Environmental Company: http://citenco.com.vn/ Danang Urban Environment Company: http://moitruongdothidanang.com.vn/ Hue Urban Environment and Public Works Company Limited: http://hepco.huecity.vn/ Dak Lak Urban and Environmental Limited Company: http://moitruongdothidaklak.com.vn/ Ha Long Urban Environment Joint Stock Company: http://moitruongdothihalong.com/ ..... Urban Drainage Companies: Wastewater drainage and treatment in cities Hanoi Sewerage and Drainage Limited Company: http://thoatnuochanoi.vn/ Ho Chi Minh City Urban Drainage One Member Limited Company: http://udc.com.vn/ ...... c. Private Sector: NAVIWater: Water and wastewater treatment. http://www.naviwater.com/ VietStar Environmental Joint Stock Company: Provision of services of industrial waste and hazardous waste treatment, environmental consultancy, wastewater treatment, environmental engineering, and trading of waste materials. http://www.vietstarjsc.com/ Tam Sinh Nghia Investment – Development Joint Stock Company: Working in the environmental protection and treatment sector, development and provision of waste treatment technologies. http://www.tsn-corp.com/ Vietnam-Australia Environment Joint Stock Company: Transport and treatment of hazardous waste; scrap and waste recycling; trading of scrap and recycled products; environmental consultancy service. http://www.vinausen.com/ SEEN Technologies Corporation: Provide comprehensive solutions covering design, construction, material and equipment supply in the fields of Environment and Automation. http://www.seen.com.vn/
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Huy Hoang Environmental Technology Limited Company: Provision of design consultancy service for treatment of clean water, wastewater, exhausted gas, solid waste, hazardous waste; environmental service, and technologies and equipments for environmental treatment. http://www.huyhoangenvitech.com.vn/ Green Environment Technology Joint Stock Company: Design and construction of water supply and wastewater treatment works, preparation of environmental impact assessment reports, provision of equipments, materials, chemicals‌ for environmental pollution treatment, and production of bottled water. http://www.moitruongxanh.vn/ PERSO Joint Stock Company: Provision of technologies for supply water treatment, wastewater treatment, gas emission treatment, etc. http://moitruongperso.com/ Viettronics MEDDA One Member Company Limited: Provision of medical equipments and environmental treatment equipments for healthcare facilities. http://www.medda.com.vn/ Clean Technology Joint Stock Company or Lino JSC: Manufacturing of clean technology products, including ozone and electric charge devices. http://www.lino3.com/ Binh Phuoc Environment Technology Investment and Development JSC: Provision of organic fertilizers, environmental consultancy services, waste recycling, trading of waste materials, waste treatment and disposal, waste collection and transport. http://www.betid.com.vn/ d. NGO and Others: Vietnam Association for Conservation of Nature and Environment - VACNE: Consultancy and social review in the fields of nature conservation and environmental protection; scientific research and technology innovation on environmental protection and sustainable development; provision of services related to environmental protection, etc. http://vacne.org.vn/ Vietnam Urban Environment and Industry Zone Association – VUREIA: Working in the urban environment and industrial sector and other relevant activities. Vietnam Water Supply and Sewerage Association: Working in the water supply, sewerage and environmental sanitation sectors. http://www.vwsa.org.vn
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2. Cleantech - Renewable Energy in Vietnam 2.1. OVERVIEW Recent industrialization process and economic growth have increased Vietnam’s demand for energy consumption. It is estimated that an average growth of power demand during 2001-2010 is 14.5%, reaching 86.5 terawatt-hours in 2010 and continues to grow at 12-16% through 2015. An additional capacity of 4,000 MW is needed annually during 2011-2015 to meet the expected demand. Vietnam has already been a net importer of energy (about 4% of its supply is imported); more than 50% of the domestic power supply is originated from fossil fuels. These facts pose great challenges for the country in ensuring sufficient and sustainable power supply in future. Not only demand for energy is rising, but production costs and constraints associated with traditional energy supply are also growing. For example, environmental regulations and new legislation that promote energy conservation become stricter. All of these factors contribute to a rapidly expanding market for sustainable energy in Vietnam. In response to this, the Government has been paying increasing attention to renewable energy. The National Power Development Plan for the period 2011 – 2030 with Vision to 2050 has highlighted the role of renewable energy. Specifically, Vietnam targets to increase the share of renewable energy in total primary commercial energy from 3% in 2010 to 5% in 2020 and 11% in 2050. This movement suggests that renewable energy has high potential in nearby future. On the other hand, new policies with regard to climate change adaptation and mitigation will generate incentives for the public and private sectors to invest in low carbon economic growth. This trend will trigger opportunities in development of renewable energy (RE), cleaner production and environmental technology as well as improving energy efficiency (EE). This report will identify the business potentials for Renewable Energy in Vietnam based on analysis of institutional and legal framework and potentials of different types of RE. The report is structured in to 5 sessions. The first session describes institutional framework for energy and brief overview about energy sector. More details about different types of renewable energy and the issue of energy efficiency are the focuses of the next two sessions. Based on the first three sessions, the prospect for renewable energy is identified in the session 4. Session 5 continues with recommendations on business opportunities for Swiss companies. The paper ends with the conclusion.
2.2. INSTITUTIONAL MECHANISM 2.2.1. Legal framework for renewable energy Realizing the importance of energy security in a sustainable economic development, Vietnam, in the last decade, has prioritized investment into developing energy sector infrastructure and policy. But the legal framework for RE is still incomplete. However, important targets and incentives are already reflected in governmental law, strategy and in a series of other legal documents. a. Regulations on RE sector Law on Electricity 2004 sets direction for gradual use of RE for electricity generation and encourages investment in RE through providing investment and other incentives. The National energy development strategies for Vietnam up to 2020, outlook to 2050: approved in 2007 puts the target of increasing the share of RE in total primary energy supply from 3% in 2010 to 5% in 2020, and 11% in 2050. Furthermore, government aims to raise the share of households using RE in cooking from 50% in
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2010 to 80% in 2020. By 2010, the electricity coverage is 95% of rural households, by 2020, 100% households. The strategy also considers establishing a RE development fund. The National Power Development Plan period 2011- 2030 (Master Plan VII) approved in 2011 reiterates the target of increasing the share of renewable energy in total primary commercial energy as mentioned in the 2007 strategy (3% in 2010; 5% in 2020; and 11% in 2050). The Master Plan VII makes a step further regarding RE by adding the target of increasing the share of electricity generated from renewable resources such as wind and biomass from 3.5% of total electricity generation in 2010 to 4.5% in 2020 and 6% in 2030. b. Other regulations on incentives for RE development + The Promulgation of regulation on avoided cost tariff and standardized power purchase agreement for small renewable energy power plants issued in 2008 highlights conditions, procedures and construction of small RE power plants connected to the national power grid (Small Power Purchase Agreement) SPPA. + Guideline on implementation of some articles of Decision No.130/2007/QÄ?-TTg on financial incentives for CDM projects issued in 2008 lists price subsidy for products from CDM projects including: - Electricity produced from wind, solar, geothermal and tide - Electricity produced from recovered methane gas (landfill, coal mining) c. Regulations on wind power and bio-energy + The Mechanisms to support wind power issued in 2011 specifies following supports for this type of energy: - Guaranteed 20 year power purchase agreement - Different investment incentives, including taxes incentives, fees reduction or exemption, better access to land and other infrastructure. - Support for electricity prices (grid): purchase at high price, an amount equivalent to 7.8 US cents / kWh - The application of CDM + The Scheme for bio-energy development up to 2015, with outlook to 2025: approved in 2007 sets the following milestones: - 2010: development of models for experimenting; and using of bio-energy, meeting 0.4% of gasoline and oil demand in country - 2015: production of ethanol and vegetable oil reaches 250,000 tons, meeting 1% of gasoline and oil demand in country - 2025: production of ethanol and vegetable oil reaches 1.8 million tons, meeting 5% of gasoline and oil demand in country. d. Regulations on energy efficiency Even though energy efficiency is not a key focus of this paper, but application of RE eventually will contribute to improving energy efficiency. Hence, latter in this chapter we will briefly look at this issue. The most important legal documents on energy efficiency are: + Law on Energy Efficiency and Conservation 2010 states that government gives priority in development of clean energy technologies and raises proportion of RE’s usage. The law also encourages more research and development of new resources to substitute traditional fuels. + National Energy Efficiency Program: approved by Prime Minister on 14/04/2006 (Decision 79/2006/QDTTg) sets a target of: - Saving 3 -5% of energy consumption for the period of 2006-2010 CLEANTECH MARKET VIETNAM REPORT
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- Saving 5 -8% of energy consumption for the period of 2011-2015 Environmental regulations related to RE Energy production is closely related to the environment in two ways. Firstly, traditional energy production using natural resources is a source of environment deface. On the other hand, energy generation using waste is a perfect way to protect environment. Environment policies, therefore, are also promoting the production and use of RE. Environment policies related to RE are: + The National strategy on comprehensive management of solid wastes for period up to 2025, vision to 2050 approved in 2009 has set targets concerning recycling, reuse and energy recovery of solid waste as follow: By 2015 60% of total collected urban solid waste will be recovered, recycled and re-used; by 2020 the target will be 85%, by 2025 the target will be 90% and the by the 2050 100% of total collected urban solid waste will be recovered, recycled and re-used. + The Decree on incentives, support on environmental protection activities issued in 2009 has stipulated a number of privileges to environment protection such as tax exemption, reduction of tax and fees for environmental protection activities. Products generated from environment friendly activities receive rice subsidy and other support. Energy generated from waste treatment is in the list of products with incentives. + The Environmental protection law 2005 specified that using clean and renewable energy is one dimension of environment protection. Investment in development or use of RE will receive support from the state such as tax, capital and land incentives.
2.2.2. Government Agencies Working on RE The most relevant Government agency to RE is the Ministry of Industry and Trade (MOIT). But as mentioned earlier, RE and environment protection are closely related. The Ministry of Natural Resource and Environment (MONRE) thus has an important role in promoting development and use of RE. In addition, the Ministry of Agriculture and Rural Development (MARD) plays a controlling role over feedstocks that can be used for bioenergy. Similarly, Ministry of Construction (MOC), who supervises waste management, also plays important role in providing input for RE. Ministry of Science and Technology (MOST) develops all RE standards and provides support on development of RE technologies. There are two institutions under MOIT which work exclusively on energy – General Directorate of Energy (GDE) and the Institute of Energy (IE). The GDE is responsible for drafting provincial plan for development of RE; policies for promoting development of RE; and national targeted program on new and renewable energy. All of those plan, program and policies, once completed, should be submitted to MOIT for approval. GDE is also responsible for the implementation of projects and programs on RE development.
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Figure 3: Government Agencies related to RE
Vietnam Government
Prime Minister
Ministry of Industry and Trade (MOIT) •Approve master development plan for RE; •Develop policies promoting RE; •Manage implementation of RE projects; •Conduct research on RE; •Focal point for RE.
General Directorate of Energy (GDE)
Institute of Energy (IE)
Ministry of Natural Resources and Environment (MONRE) • Promoting RE solutions
Ministry of Science and Technology (MOST) •Regulate quality standards for energy, including RE; •Regulate standards for energy efficiency; •Support other state agencies in development of RE technologies.
Ministry of Agriculture and Rural Development (MARD) •Manage by-products from agricultural sector which is input for bio-energy; • Support bio-energy initiatives
Ministry of Construction (MOC) •Management of waste which is inputs for RE
The IE’s main task is to conduct research on energy (including RE) technologies and advises the government with energy policy and planning (IE website, 2012). Most research related to bio-energy is executed by the IE and the IE is also involved in the drafting of the National Master Plan for Renewable Energy. The Master Plan for RE has been submitted to the Government and is currently waiting for approval. 2.2.3. Overview about Electrical System from Generation to Distribution At a glance, the electric power industry is under the jurisdiction and management of the MOIT. However, when talking about energy sector in Vietnam, one should not forget the role of Vietnam Electricity (EVN) a state owned enterprise reporting to the Prime Minister. EVN owns 51% of electricity generation capacity, all transmission lines, all electricity operation systems, electricity distribution and electricity retail. EVN is the sole buyer of electricity from power plants and holds a monopoly on electricity transmission and distribution. Below is an overview of electricity sector. Power Generation: the key players in power generation are EVN, Petroleum Corporation of Vietnam (Petrovietnam), and Vietnam National Coal and Minerals Corporation (VINACOMIN). According to EVN, the total installed capacity is approximately 21,000 MW with 51% contributed by EVN (see Figure 4 below).
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Figure 4: Shares of power generation by ownership (%)
Source: EVN (2011) Figure 5: Shares of power generation by fuel sources (%)
Source: EVN (2011)
Vietnam continues to build power plants to keep pace with increasing in demand. The current number of power plants under construction in Vietnam is 29 with total capacity of 13,766 MW. Among which, there are 20 hydropower plants and 9 thermal power plants. The country currently has 21 wind power projects that have been licensed in Binh Thuan, Ninh Thuan, Binh Dinh, Bac Lieu and Lam Dong provinces. Two of which have completed and already been put in operation (Vietnam Renewable Energy of 30MW in Binh Thuan and Cong Ly of 100MW in Bac Lieu); and one of which is under construction (Thuan Nhien Phong of 50MW in Binh Thuan). It is expected in the Power Master Plan VII that by 2020, RE would increase its presence to 4.5% of total generated power. Figure 6: Structure of power sources by 2020 (Source: Power master plan VII)
4.5%
2.1%
24%
51
Coal thermal power Hydropower 46.8%
19.6%
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Gas thermal power Renewable power Nuclear power
Electricity market EVN is currently playing dominant role in electricity market in Vietnam but the country is gradually liberalizing the market. The wholesale competitive market, where sellers (power plants) and buyers (distributors and large consumers) will make transaction directly on competitive basis, is scheduled to launch in 2014. By 2022, it is expected that full competitive electricity market will be in place. At the moment, EVN is only obliged to buy wind energy for 20 years at price of 7.8 cent USD/kWh. Producers of other RE type have to negotiate on a case-by-case basis. Electricity Pricing: The government strictly regulates electricity retail prices. Price adjustments are recommended by MOIT and approved by the Prime Minister. A unified tariff is applicable across the country and is low in comparison with other regional countries. Both average urban and rural residential rates are cross subsidized by higher rates for industry, commerce, and foreign consumers. To attract more investment from the private sector in developing IPP projects, MOIT and EVN have been working on a roadmap for price increases and gradual elimination of government’s control. Independent Power Producers (IPPs): As EVN’s self-financing and other sources of debt financing can meet only about 66 percent of the total investment requirement, IPPs are expected to carry a large portion of the investment in the power generation sector, including those to be developed by foreign investors. In 2006, MOIT, the government agency responsible for planning, executing bidding, and contracting procedures for large IPPs, issued Decision 30/2006/QD-BCN to regulate the investment, construction and operation of IPPs. Consequently, to date, a considerable number of foreign investors have shown interest in developing IPP projects in Vietnam, yet few projects have been realized. The challenges are legal and regulatory issues, low electricity purchase prices by EVN1, the lack of a fully competitive market, and poor coordination among related government agencies. In response to these hindrances, MOIT has taken bold measures in an effort to facilitate IPP development including signing a financial advisory agreement in 2006 with the International Finance Corporation (IFC), a financial arm of the World Bank (WB). The major goal of this agreement is to increase private participation in the power sector through open competitive bidding. Transmission and Distribution: In 2010 the rural electrification rate in Vietnam was 95 percent and is expected to reach nearly 100 percent by 2020. The following chart shows the current transmission system as well as its projected development to 2025. Figure 7: Projected Expansion of Power Transmission system to 2025
1
Production cost of RE is normally high because of high investment cost.
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In addition to the transmission system, Vietnam currently operates a power distribution system with total capacity of 35,723 MVA2. The rapid development of power generation and transmission systems will require expansion of the distribution system accordingly in the future. Vietnam has developed an investment plan for the period 2010-2015 with the total capacity of 48,900MVA for substation (S/S) and 8,219 km of transmission lines (T/L) corresponding to the total investment of USD4.3 billion. With such major investments, Vietnam is expected to have an increased demand for control and protection equipment and devices such as power transformers, circuit breakers, disconnect switches, capacitors, calculated software, telecommunication and information technology equipment, etc. for transmission grid. Development of Power Sources: On July 21, 2011, the Prime Minister approved the Power Master Plan VII (see above), which emphasizes a balanced development of power sources in each region of the country to ensure a sustainable power supply. Thermal coal-fired power, currently accounting for 15 percent, still plays an increasingly important role in the medium and long term. Power generation capacity is expected to rise from 21,000 MW in 2010 to 70,000 MW in 20203. Table 5: Targets development of the Power Sector by 2030
Source: Mayer Brown JSM
Renewable Energy: the Power Master Plan VII prioritizes developing renewable energy resources such as wind power, solar power and biomass power. Projections are to increase the percentage of renewable energy power to 4.5 percent by 2020 and 6 percent by 2030. Specifically, the plan aims to increase the combined capacity of all wind power plants to about 1,000MW by 2020 and 6,200MW by 2030. This is equivalent to increasing the percentage of wind power from almost zero percent at present to 0.7 percent by 2020 and 2.4 percent by 2030. To support the achievement of the plan’s targets, in 2011 the Government promulgated Decision 37/2011/QDTTg on incentives for wind power development. According to this decision, EVN is obliged to buy wind power at price of 7.8 US cents per KWh and will receive back subsidy of 1 US cent per KWh from the State. Besides, all wind projects also enjoy import tax exemption for all imported machineries and equipment to form their 2
The system consists from 115,659 km of 6kV, 10kV, 15kV, 22kV and 35kV lines with a total capacity of 3,662 MVA and 109,199 km of 220V lines with a total capacity of 32,061 MVA. 3 21,000 MW in 2010 (that produced 100 billion kWh) to 43,000 MW in 2015 (that produces 200 billion kWh); 70,000 MW in 2020 (330 billion kWh), and 137,700 MW in 2030 (695 billion kWh).
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fixed capital. Nuclear Power: In June 2008, the National Assembly adopted the Atomic Energy Law. This is a critical step toward development of this new type of power. In 2009 the National Assembly approved the construction of two nuclear power plants in Ninh Thuan province. Recently, Government awarded the construction of Vietnam’s first nuclear power plant to Rosatum of Russia and the second one to a Japanese consortium. Vietnam’s goals for nuclear power generation are as follows: • First nuclear reactor to be in commercial operation by 2020 • Three more reactors to be in operation by 2021-2024 • By 2030, the country's nuclear power capacity is projected to reach 10,700MW and nuclear power output is about 70.5 billion kWh (10% of the total electricity output in Vietnam)
2.3. RENEWABLE ENERGY IN VIETNAM 2.3.1. Renewable energy potentials Vietnam has a huge potential of renewable energy sources, including solar, wind, biomass, geothermal and hydropower – all capable of supplying a large part of the country’s energy requirements. The energy/GDP elasticity ratio is twice bigger than that of developed nations. It is expected that the country will become an energy importer over the next three years. Having renewable sources that are sufficient and readily available, the country is well-positioned to meet its surging energy needs through alternative power. According to Vietnam’s Institute of Energy, most of the Vietnam’s regions are located in tropical zones, receiving over 2,500 hours of sunshine per year. That is equivalent to 44 million tons of oil when translated to energy. Meanwhile, wind power that can be produced is estimated at 713,000 megawatts, of which 510,000 MW comes from onshore and 200,000 MW from offshore. As an agricultural country, Vietnam has a high potential of biomass, which could reach 2,500 megawatts of total capacity. With over 300 natural geothermal sources found, Vietnam also has potential to generate more than 300 MW of geothermal power output, with the central region as the most ideal spot for exploration. Moreover, around 320 MW of power can be generated from waste every year and 100 MW to 200 MW from hydropower. However, up to 2010 electricity generated from renewable sources remains limited, accounting for just 2% of total generated electricity. Total installed capacity of RE is more than 600 MW. Among which, wind electricity is 30MW, electricity from small hydropower plants 450 MW, solar electricity 1.5 MW, and biomass electricity 150MW.
2.3.2. Renewable energy potentials by types a. Solar thermal energy Most of Vietnam is situated in the tropical zone between 8 and 23 North latitude with up to 5,000 hours of sunshine per year. The average solar energy density ranges between 100 and 175 kcal/cm2/year. Generation of solar heat energy can total up to 1744.5 kWh/m2/year. The total potential is estimated at 43.9 billion TOE/year. Solar radiation increases from North to South. It is higher and more stable in the highlands, central coastal and southern provinces. The two main technologies used in Vietnam are the solar PV (Photovoltaic) and the solar thermal applications. Users of the solar PV application include families living on islands and in remote rural/mountainous areas, where the electricity grid does not reach. Accumulative installed capacity up till now is around 1.5 MWp. Of
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which, 30% are used by rural families, 35% are used for telecommunications and 35% are used for marine communication. Table 6: Solar thermal energy at selected locations in Vietnam
No.
Location
1
Ha Giang (North VN)
2
Lao Cai (North VN)
Latitude
300.6
3‘496
1437.0
86.22
0
320.0
3‘722
1588.4
95.30
0
383.2
4‘456
2014.9
120.89
0
325.0
3‘780
1620.9
97.25
357.3
4‘155
353.0
4‘105
407.6
4‘740
404.3
4‘702
456.2
5‘305
510.5
5‘937
404.8
4‘708
22 30’
Đien Bien (North VN)
21 21’
4
Hoa Binh (North VN)
20 51’
6 7 8 9 10 11
Annual Capacity of Solar PV 120wp (KWh/Year)
0
2 49’
3
5
Average Solar Energy Hours of Density Sunshine Per Year (Hrs) cal/cm2.day Wh/m2.day
0
Thanh Hoa (Central VN) Quang Tri (Central VN)
18 48’ 0
16 44’
1668.0 1886.7
100.08 113.20
0
Pleiku (Central VN)
13 59’
2377.0
142.62
0
Qui Nhon (Central VN) Nha Trang (South VN)
13 46’ 0
12 15’
2558.5 2553.7
153.51 153.22
0
Phan Thiet (South VN) Soc Trang (South VN)
10 57’ 0
9 36’
2911.1 2399.6
174.66 143.97
Source: Institute of Energy (2009)
Solar thermal collectors are mainly used for domestic water heating by city households. The two common types of solar water heaters are the flat plate collector and the evacuated glass tube collector. The Vietnamese Government has recently launched a five-year national program to call for public participation to utilize solar energy. It is estimated that the program will put 30,000 solar-powered water heaters each with a 180-liter capacity on the market by 2013. The program also aims to expose the benefits of solar energy amongst the public and adapt the technology for making solar-powered water heaters. At present, Vietnam imports thousands of such units and accessories every year. The planned installation of solar heaters could help save 57 million kWh of electricity power and cut greenhouse gas emissions by 23,541 tons every year. Most PV panels are imported from Japan, Australia, Italy and the UK. The government has assigned the Energy Conservation Centre of Ho Chi Minh City to begin constructing the first solar panel manufacturing plant in Vietnam with a total investment of $10 million in mid 2008. In the first phase, the project will focus on building and assembling solar panels from solar cells imported mainly from Germany and France, with a capacity of 3 MWp per year. In the second phase, the factory will produce solar cells from silicon bars and raise its capacity of assembling panels to 5 MWp per year. b. Wind With over 3,000 kilometers of coastline and tropical monsoon climate, Vietnam is considered having good wind energy potential. However, the exploitation of the wind energy potential in Vietnam has not been
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accurately quantified due to lack of investigation, survey and measurement to evaluate the resource. Therefore, data on the potential of wind energy in the available reports varied greatly4. Currently a number of grid-connected wind power projects are being implemented mainly in the central coastal provinces (Binh Thuan, Ninh Thuan ...). For example: a wind power generation project with a capacity of 27 MW is being developed by the Vietnam Renewable Energy Joint stock company (REVN); several other medium-large (10-125 MW) wind projects are in the feasibility study stage. At the islands where the wind power potential is high but there is no national grid, the hybrid system WindDiesel or Wind - Solar - Diesel is considered a better way of exploiting wind power than the national electricity grid, or just use diesel. Table 7: The potential of wind energy in Vietnam at height of 65 m
The average wind speed
Low < 6 m/s
Medium 6-7 m/s
Relatively high 7-8 m/s
High 8-9 m/s
Very high > 9 m/s
Area (km2)
197.242
100.367
25.679
2.178
111
Area (%)
60,60%
30,80%
7.90%
0.70%
>0%
401.444
102.716
8.748
452
Potential (MW) Source: World Bank (2001)
Table 8: The technical potential of wind energy in Vietnam a
No.
Area
1
North
50
2
Centre
880
3
South
855
Total
1785
a:
Technical potential (MW)
Areas with annual average wind speeds greater than 6 m / s at 60 m height above the ground
Source: EVN (2006)
c. Small hydro power plants Apart from the â&#x20AC;&#x2DC;big twoâ&#x20AC;&#x2122; -Mekong and Red River- most of the Vietnamese river systems are composed of small river basins with short rivers, high river bed grades and relatively equal river density. High average rainfall and the combination of high flow density, broadly distributed springs and cut-through relief provide suitable conditions for small hydropower development. About 1050 potential sites for small sized hydropower, ranging from 0.1 to less than 30 MW, have been identified with a total capacity of 4,044.5 MW, equivalent to 16.7 million GWh/year. More than 200 plants have been completed and 800 are planned to be built. Provinces having high potential are Son La (95 projects), Kontum (80 projects) and Lao Cai (80 projects). At present, hydropower is the main supply source for national power demand, accounting for 40% of total capacity in Vietnam.
4
Ranging from 1,785 MW (EVN) to over 8,700 MW, or even 100,000 MW (based on wind data Map of the World Bank). CLEANTECH MARKET VIETNAM REPORT
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Table 9: The technical potential of small hydro power plants in Vietnam
Capacity range (MW)
Total capacity (MW)
0.1- 1
126.8
1- 5
1 030.2
5- 10
1 048.3
10- 15
648.0
15- 20
562.8
20- 25
309.0
25- 30
290.0
Total (<=30MW)
4015.1
Source: Ministry of Industry (2006)
d. Biomass (Biogas/ process gas, waste heat utilization, heat pumps) As an agricultural country, Vietnam has huge potential for biomass energy. Key inputs for biomass production in Vietnam are forestry and agricultural by-products and solid waste. The main types of biomass are: firewood, agricultural residue, animal excrements, municipal waste and other organic waste. It is estimated that, the total potential input for biomass is over 170 million tons, and the ability to exploit biomass resources for energy and electricity is between 1600-2600MW. About 90% of total biomass are for household consumption such as for cooking and heating while 2% of it have been used for organic fertilizer and bio-fertilizer (animal and farming residues, mud and bagasse from sugar mills); 0.5% have been used for mushroom and fungi cultivation and about 7.5% have not been used (food processing residues have been dumped and straw and rice and coffee husk have been burned out) (Nguyen, 2005). Table 10: Potential and the ability to exploit biomass
Type of biomass
potential (million tons)
The ability to exploit energy (million tons)
1. Firewood and wood waste
> 30
25
150 - 250
2. Waste from agriculture
> 72
50
1200 -2000
3. Livestock waste
> 60
50
58 - 100
4. Urban waste
> 10
8
200 - 300
1.0-1.5
1
5. Waste from bioenergy production Total
134
The ability to exploit the power (MW)
1608 - 2650
Source: IE
Usage of Biomass energy is used mainly for heat and electricity production. About 50% of primary energy used for heat production is biomass (IEA, 2006). With gradual introduction of new type of energy such as LPG, this share is declining. However, in rural areas, biomass is still the main cooking fuel for 70% of the rural population. It is also the traditional fuel for production of many local products such as food, handicrafts,
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bricks, porcelain, and ceramics. Despite high potential of biomass energy, investment in biomass energy in Vietnam has been faced with various difficulties such as selling price negotiation with EVN and access to bank loan. These challenges hinder the development of biomass for grid-connected electricity production5. e. Bio fuels Nguyen Duoc (29 January 2010), in his article Biodiesel Vietnam: Potentials and challenges published in Viet Bao, has identified Vietnam’s main biofuel feedstock for the period up to 2015 with an outlook to 2025 as: (1) fats and oils including used oils from food industries, (2) algae, (3) agricultural crops such as cereal, sesame, peanut, coconut, and basa fish fat, (4) jatropha which can be grown on around 9 million hectares of bare land or land strips along the national highways. Two national standards for bio-ethanol and bio-diesel were issued in 2007. In October 2008, the MOIT approved projects to facilitate bio-fuels development. Those projects are: Growing trees as materials for producing bio-fuels; development technologies using in bio-fuels production, designing plans and policies to support the development of bio-fuels in Vietnam; and testing and applying ethanol petrol in Vietnam. In June 2008, the MARD authorized jatropha bushes R&D program. Vietnamese government commits to bear financial obligation for bio-fuel development program through two circulars authorized by the Ministry of Finance in 2007 and 2008. The MOST also issued two national standards on bio-fuels in 2009. Vietnam originally planned to begin producing additives, enzymes for bio-fuels and expand biofuel plant capacity to satisfy 1 percent of the country’s petrol demand by 2015. Vietnam’s goal by 2025 is to provide 5% of fuel need for all motor vehicles in the country by producing 100% of E5 and B5 fuels. Development of biofuel in the coming years will continue to be guided by the government’s “Project for Development of biofuel to 2015 with a vision to 2025” (Decision 177/2007/QD-TTg of the Prime Minister). Under the project for development of bio-fuel development to 2015 with a vision to 2025 (Decision 177/2007/QD-TTg of the Prime Minister), Vietnam will satisfy 5 percent of domestic petrol and diesel demand in the next 15 years. This is equivalent to an annual amount of 1.8 mllion tons of ethanol and vegetable oils to be used as fuels. In short, Vietnamese government is close to finalize a legal framework on bio-fuel market. The government also shows its support to bio-fuel industry through direct subsidy, tax incentive, and capacity building program. To the investors, the bio-fuel industry is an attractive option in terms of government support.. However, according to GIZ Renewable Energy Project in Vietnam, challenges for biofuel industry in Vietnam are: 1) High production cost, plus stiff competition with the subsidized fossil fuels industry; 2) Inadequate infrastructure for production and distribution; 3) Compliance with international standard in case of exporting bio-fuels product.; 4) Higher biofuel price in Vietnam than that in neighboring countries (Nguyen, 2009). Despite those challenges, many bio-fuels development projects have been sponsored by foreign investors. In its summary, GIZ Renewable Energy Project in Vietnam has named JICA, the Netherlands Government, and recently, the Korean Government. An US investor has also been mentioned: The US-based Golden State Biofuel invested US$200 million in 10 ethanol plants that utilize rice husk. The plants use equipment manufactured in the US (Global Trends in Sustainable Energy Investment, 2010). f. Geothermal With more than 300 hot streams with temperatures ranging from 30 °C to 148 °C, situated in Northwest and Central Vietnam, Vietnam has an estimated geothermal power potential of 1,400 MW. While data on 5
Retrieved from http://www.renewableenergy.org.vn/index.php?page=biomass
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geothermal reserves for power generation are limited, rough estimates indicate that a capacity of 400 MW could be reached in 2020. Table 11: Geothermal potential in the regions of Vietnam
Geothermal Region Total number of sources
Deep temperature o ( C)
Number of potential geothermal resources by the different scale Industrial
Medium
Small
Northwest
79
103-200
10
25
44
Northeast
11
95-146
2
6
3
Red River Delta
17
100-150
5
3
9
North Central
42
120-210
4
10
28
South Central
67
110-200
14
18
35
South & Mekong Delta
53
150
22
31
84
150
269
Total
ď ś
35
Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis Strengths Swiss companies
Vietnam
- Swiss companies have high quality RE technology and equipment as well as strong financial capacity and experience in RE. - Swiss embassy in Hanoi is willing to help making contact and find further information upon request.
- Vietnam Government development of RE
is
interested
in
- Certain incentives are available for investors in RE.
Weaknesses Swiss companies
Vietnam
- Swiss equipments and technologies have relatively high price while potential partners in RE are private companies whose capital ability is limited.
- Support for RE investors is available but not strong enough.
- It takes time to learn Vietnamâ&#x20AC;&#x2122;s business culture.
- RE, EE programs are available but shortage of human and financial resources limit Vietnam to effectively carry out those programs; - There is no binding regulation to purchase power from (small) power producers. The only exception is wind electricity; other types of energy are still struggling with negotiation price with EVN on a case by case basis.
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Opportunities: Swiss companies
Vietnam
- Vietnam wants to increase access to electricity up to 100%. This opens opportunities for RE in islands and remote areas.
- Vietnam provides certain incentives for investors in RE development
- Vietnam is well endowed with renewable energy (RE) resources which are distributed throughout the country. The most popular of Vietnam’s RE resources are small hydro power, biomass energy, wind energy, solar energy and geothermal energy.
- Stronger environment protection and energy efficiency regulations in Vietnam also create more favorable for RE development
Threats Swiss companies
Vietnam
- RE technology and equipment with high price and high quality, similar to the European market, are unlikely to be widely accepted because similar substituting technology can be obtained from countries in the region with reasonable cost. China is a preferred supplier who can copy most of technology in the world.
- European or Swiss RE technology might be too advanced for local Vietnamese engineers and technicians to learn and master.
- Other countries with good RE technology, such as Germany and Netherland, are also interested in the RE market in Vietnam.
2.4. ENERGY EFFICIENCY Vietnam has been taking traditional way to respond to power growing demand i.e. develop diversified energy generation to cover supply gap. However, it is not enough since better management of demand might bring better result than building new power plants. This calls for more attention to energy efficiency (EE). Opportunities to improve EE exist in all economic sectors such as house construction, public lighting, transportation, service provision…. With better urban planning, public transport system and development of technology, people can enjoy high quality of life with much lower power bill. It is estimated that the potential energy saving in water supply is 15% and almost 50% in agriculture and cement industry. Realizing the importance of EE, in 2003, Vietnamese Government issued the first decree on EE 6. The Decree sets forth the roles and responsibilities for all actors in government and society with respect to energy efficiency. It also calls for suppliers of energy-consuming equipments and facilities to declare the energy consumption of the equipment in the user instruction manuals and on the labels of such equipment and facilities. The next practical step is to pass the Vietnam National Energy Efficiency Program (VNEEP) for the period 2005-2015 in 2006. This plan contains measures, one of which is to widen the use of RE to improve EE&C in all sectors of the economy. The overall aim of the program is to save of 3% – 5% during the period 2006 –
6
Decree on Energy Conservation and Energy Efficiency (No.102/2003/NDCP) dated 3 September 2003
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2010 and 5% – 8% during 2011 – 2015 of the total energy consumption7. Government determination on EE has finally led to promulgation Law on Energy Saving and Efficiency in 2010. The Law has explicitly named a group of intensive energy consumers including industrial establishments, public facilities, and transportation establishments. This group has to follow strict requirements on energy efficiency. Regular energy audit, developing annual energy consumption planning, assigning official responsible for implementation this plan, applying energy saving measures are the elements in the compulsory EE management procedure that the intensive energy consumers must follow. The Law also provides general guidelines on energy performance standards and energy labeling as well as measures to promote energy saving and efficiency through incentives and science/technology development. Among sectors that made further action toward improving EE is the construction sector. This one big energy user (accounting for about 36 percent of national energy consumption) has issued Building Energy Efficiency Code in 2005 aiming at reducing energy costs and CO2 emissions. The Code outlines mandatory minimum requirements for energy efficiency in buildings from design, construction to operation. However, the Code has not been widely implemented due to a lack of specific guidance, effective standards and enforcement. In response to the situation, in 2012 International Financial Corporation (IFC) signed MoU with Vietnam to support revising the Code. The revised Code is expected to be promulgated this year. Further, IFC also supports MOC with capacity building in preparation for implementation of the revised Code once it is approved. Vietname’s majority of population lives in rural area, where potential for production of RE is abundant. The development of RE in rural area therefore plays crucial role in EE. On one hand, increasing the usage of RE in rural area allows RE’s abundant potentials to be exploited. On the other hand, application of RE will enhace access to electricity in rural areas and reduce migration to urban centers, which might put more burden to urban planning and EE in urban areas.
2.5. PROSPECTS OF RENEWABLE ENERGY 2.5.1. Prospects As mentioned above, Vietnam has high potential for RE development and faces challenge in meeting the growing domestic energy demand. Government of Vietnam thus has paid high attention to RE in pursuing the country’s energy security and sustainable development. The Master Plan XII has set target for increasing the share of electricity generated from renewable sources in total energy production to 4.5% in 2020 and 6% in 2030. Figure 8: Share of electricity produced from renewable resources in total generated electricity, %
7.0%
6%
6.0% 4.5%
5.0% 4.0%
Share of electricity generated from renewable resources
3.5%
3.0% 2.0% 1.0% 0.0% 2010
2020
Source: Power Master Plan VII 7
compared with the base forecast on energy development in 2006
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2030
The determination of the government is reflected in preparation of National Development Plan for RE until 2020 with vision to 2030 (Master Plan for RE). The Master plan for RE is prepared by the Institute of Energy, MOIT and has been submitted to the Government. Once approved, the Master plan for RE will be important document for RE development. The latest draft of the Master Plan for RE has stressed the role of RE in substitution for traditional sources of energy and also in poverty reduction (by improving access to electricity in remote and mountainous areas). However, much more support from Government are required because the production cost for renewable electricity is much higher than the current price of electricity generated by traditional method (average at 5 cent UDS/kWh higher). The Master plan on RE has developed targets for RE based on baseline scenario 8. Summary of targets development of generated capacity of RE in the draft Master plan on RE, both connected to the grid and offgrid, is presented in tables 12 and 13 below. Table 12: The total capacity of renewable energy sources connected to the power grid in operation (MW)
Capacity by type of RE
2011-2015
2016-2020
2021-2030
2011-2030 (all phases)
1198
2408
9588
13194
Wind Power
213
780
5200
6193
Small hydro
895
1100
2380
4375
Biomass (solid)
50
305
1500
1855
Waste
39
100
200
339
Geothermal
0
80
198
278
Solar power
1
9
45
55
Biogas
1
34
65
100
Total renewable energy
Source: IE
Table 13: The total capacity of off-grid renewable power in operation (MW)
Capacity by type of RE
2011-2015
2016-2020
2011-2020 (all phases)
Solar Power Family Systems
12.3
10
14
Small hydro power
31.2
25.6
58
Biogas
1.3
1
5
Wind-diesel system
3.6
3
8
Solar-diesel system
4.6
3.8
8
Wind-diesel â&#x20AC;&#x201C;solar system
3.6
2.3
9
56.7
45.7
102.4
Total Source: IE
8
Baseline scenario: 100% of households have access to electricity; Promote using all types of RE for heating; Enhance using wind power and biomass energy in production of electricity to be connected to the grid.
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2.5.2. List of projects calling for investment on renewable energy Most of RE activities in Vietnam are projects. Here is the list of projects on RE calling for investment in different parts of the country. Potential projects: - Hochiminh City: Waste â&#x20AC;&#x201C; to â&#x20AC;&#x201C; power plant project with total investment about 280 mil. USD; - Binh Dinh Province: Solar cell plant project of 5,000 products/ year with total investment about 30 mil USD; - Cao Bang Province: Small hydro power plant project and Solar cell plant project with total investment about 3 mil USD; - Hai Duong Province: Energy saving lighting equipment plant project with total investment about 10 mil USD; - Hau Giang Province: Projects calling for investment are wind, solar power, waste treatment and electric generation; - Lam Dong Province: Projects calling for investment are wind, solar power, waste treatment and electric generation with total investment about 15 mil USD; - Ninh Thuan Province: Wind power project 50MW with total investment about 50 mil USD; - Son La Province: Wind power Moc Chau project 40MW; (Source: VCCI)
2.6. RECOMMENDATIONS FOR SWISS INDUSTRIES AND SERVICES 2.6.1. Business opportunities According to IE, it is suggested that Vietnam need to support RE with VND 20,773 bil for the period 20112020. Among which, full financial support will be provided for RE used to generate off-grid electricity, equivalent to VND 14,969 bil. There will be an ample opportunity for Swiss companies to enter this segment to provide technology and equipment of solar, wind, and biomass energy. Investment in production of clean energy, exploitation of renewable energy resources or waste-to-energy projects can be considered as environmental protection activities. Therefore, it is entitled to the following incentives and supports: -
Support in land clearance and land lease fee
-
Corporate income tax (CIT): 10% in the whole project lifetime. The project located in poor socioeconomic condition areas could also enjoy tax exemption in the first 4 years from taxable year and reduction of 50% CIT in the next 5 years.
-
Import tax exemption for importing of production line or equipment using in the project.
-
Rapid depreciation.
Vietnam does not have producers of RE equipments9. Most of RE equipments and technology are imported. This is a chance for Swiss companies to enter the market. One valuable service for Vietnamese customers would be after-sale support service, especially in remote areas where many RE equipments will be located. Master plan on RE development until 2030 with the outlook to 2050 is expected to be approved this year by the Prime Minister. With the issuance of such master plan, the stronger investment incentive policies on RE development will also be introduced and enforced. This will be the real good business opportunity in RE in Vietnam. 9
There is only some mall private companies producing accessories for RE equipment such as REVN produces wind turbine accessories.
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2.6.2. Barriers for market entry Despite huge opportunity, some key obstacles for the Swiss businesses and investors in RE sectors can be identified. Electricity sales to the net There is no binding regulation to purchase power from (small) power producers. For example a stand-alone bagasse and rice husk fuelled power plant is uneconomical due to high cost of investment and its production cost is higher than coal-based power. EVN holds monopoly over transmission and distribution system. Therefore, RE producers have to negotiate selling price with EVN when they want to connect to national grid. The only exception is wind electricity, one of the cheapest RE in Vietnam, whose selling price is 7.8 cent/kWh. Other types of energy are still struggling with negotiation price with EVN on case by case basis10. High costs of equipment RE technology and equipment with high price and high quality, similar to the European market, are unlikely to be widely accepted because similar substituting technology can be obtained from countries in the region with reasonable cost. Knowledge levels European or Swiss RE technology might be too advanced for the local Vietnamese engineers and technicians to learn and master.
2.6.3. Recommendations for Swiss investors/exporters There are business opportunities in the field of renewable energy in Vietnam. Nevertheless not all opportunities can be fully utilized yet due to barriers in the macro and/or micro environment. A legal framework has been established and encourages individuals and organizations to participate in RE generation. However, difficulties such as limited capitals, technology, not completed scientific researches and not a clear incentive system protect RE projects from being developed. a. For Swiss investors The current electricity price of USD 5.4cents/kWh is too low to attract investors in the industry. Although the Government has issued a feed-in-tariff of USD 7.8 cents/kWh for wind power, which is seen as low in comparison with those offered by the Thailandâ&#x20AC;&#x2122;s government (USD 22-36 cents/kWh). However, investments in new Independent Power Producers (IPP) could be opportunities for Swiss investors in the coming years. b. For Swiss exporters -
Swiss companies entering the Vietnam market must plan strategically, and be consistent with face-to-face follow-ups. It is normal to take up to one or two years to make a successful sale into this market. It is important to find a local partner. Since most of projects in RE are on research or pilots supported by either Vietnamese government of international donors, the local partner could be state owned institutes and R&D centres or companies who have hands-on experience in the field; they can be the eyes and ears in the market, as well as a facilitator when introducing new products or projects into the market. After having known the market, Swiss firms can seek a direct presence in Vietnam.
-
To participate in fairs, exhibitions, joint innovation and research initiatives for green technology, which involve and focus on not only research institutes but also private sector. By doing it, Swiss companies can
10
Sales and contracting of green electricity to the grid is likey successful ifselling price is lower than price of power generated from fossil fuels. For example, 3 power plants fed with sugar cane bagasse are selling their surplus electricity to the national power grid at the highest price of 4US cents/kWh (all Bourbon sugar plants in Tay Ninh province). This is well below the average tariffs (between 5 and 10 US cent/kWh in 2011).
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introduce their products or services to the government and at the same times to raise the awareness of potential buyers for technology availability. -
Potential opportunities could be in energy efficiency (minergie building standard, smart electricity meters, air-conditioning etc), in new IPPs (solar, waste, biomass etc.)
2.6.4. Directory of useful contacts a. Regulatory bodies/Government organizations: Ministry of Industry and Trade – MOIT: http://www.moit.gov.vn/
Policy & National plan on Trade and Industry
Institute of Energy – IE: R&D and Consulting in energy industry http://www.ievn.com.vn Ministry of Science and Technology – MOST: Policy & National plan on Science and Technology http://www.most.gov.vn Ministry of Agriculture and Rural Development - MARD: Policy & National plan on Agriculture http://www.agroviet.gov.vn Ministry of Natural Resources and Environment – MONRE: Policy & National plan on Natural Resources and Environment http://www.monre.gov.vn Ministry of Construction – MOC: Policy & National plan on Construction http://www.moc.gov.vn/ b. State Owned Companies: EVN Vietnam Electricity - generation, transmission and distribution of electricity of Vietnam. www.evn.com.vn EVN Finance 40% capital is from EVN. Working on CDM field PVN Petroleum/Petroleum products/Bio-diesel/Ethanol products: Processing plants, extract, import & export. Power plants. Focal point for Vietnam's petroleum: www.pvn.vn c. Private Sector: Green Energy Biomass: GreenEnergy Biomass, J.S.C. (“GEB”) is a Vietnameseregistered company engaged in the production of biomass http://www.greenenergybiomass.com Viet Trung invest J.S.C.: biomass electricity http://www.viettrunginvest.com Vietnam High-Tech Renewable Biomass Energy J.S.C. : Construct RE plants Vietnam Renewable Energy J.S.C.: Institute of Energy is a stakeholder http://www.revn.vn CLEANTECH MARKET VIETNAM REPORT
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WRE Trading in Vietnam: Work on RE projects and also CDM http://www.rwe.com/web/cms/en/ Dinh Hai Thermal Power J.S.C: constructs biomass electricity plant (using rice husk) www.dinhhai.com Cong Ly Construction, Trading, and Tourist Ltd.: constructs wind power plants www.conglycm.vn d. NGO and Others: ENERTEAM: research, consultancy services, and technology developer in energy efficiency and renewable energy http://www.enerteam.org GIZ: German NGO works on renewable energy field http://www.giz.de Intraco carbon consulting: CDM: renewable energy, biogas, biomass to oil & gas field http://www.carbonvietnam.com Oxfam: UK NGO works on renewable energy field http://www.oxfam.org.uk/oxfam_in_action/where_we_work/vietnam.html Vietnam energy and environment consultancy J.S.C.: CDM and energy consultancy http://www.eec.vn
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3. Important trade fairs and exhibitions in Cleantech Entech Hanoi 2013 (Environment and Energy Tech) www.entechhanoi.com Enertech Expo International exhibition on products, technologies of energy saving & green power http://www.enertec.vn Greenbiz 2013 (European Green Business Solutions for Vietnam) http://greenbiz2013.com/en Vietwater International exhibition on water supply, sanitation, industrial wastewater treatment and purification http://www.vietwater.com/
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4. Conclusions / Further Steps There are opportunities for business and investment in waste management and renewable energy for Swiss companies in Vietnam. For the waste management market, the increasing demand for waste treatment in the whole country in general and in urban areas in particular is clearly recognized. Swiss investors could consider investing in projects of wastewater treatment, solid waste treatment, or hazardous waste treatment. Meanwhile, Swiss exporters could export their waste treatment products to Vietnam market to trade with local companies which are operating waste treatment facilities or with those seeking for European advanced technologies in waste treatment. The introduction of high-tech and environmentally friendly waste treatment equipments to Vietnam is highly encouraged by the government of Vietnam along with many supporting policies and incentives for the waste treatment investment. These favorable conditions could enable international enterprises including those from Switzerland to set up new business in this sector in Vietnam. However, the high cost of Swiss technologies and products may cause a disadvantage for these suppliers in the competition with local companies offering cheaper solutions of waste treatment. Thus, Swiss enterprises should carefully explore Vietnam market of waste management and identify the appropriate target customers to get succeed in their business in this potential sector. For the renewable energy market, at the moment, there are some barriers that make entry into this market challenging. The biggest obstacle is the lack of support or feed-in tariffs for green electricity. For the promotion of RE in general, such support is needed due to the often high initial investment in RE technologies resulting in high production cost of RE projects. However, positive changing is underway in Vietnam. As the energy market is opening up, and the economy is continuously rising, this is the good moment for Swiss investors and exporters to participate in RE sector in Vietnam and make a difference.
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