Vietnam and Singapore to deploy large-scale renewable energy project

Within the framework of the Partnering for Green Growth and the Global Goals 2030 (P4G) Summit held in Hanoi, Minister of Agriculture and Environment Do Duc Duy and Ms. Amelia Tang, Deputy Director of the Prime Minister's Office of Singapore, had an in-depth and highly constructive exchange on promoting bilateral cooperation in the field of environment and sustainable development.

The focus of the meeting was the process towards signing the Implementation Agreement under Article 6 of the Paris Agreement to implement activities to exchange results of greenhouse gas emission reduction between the two countries, a strategic step in regional and global climate change response efforts.

Ready to implement of Article 6 of the Paris Agreement

The Singaporean side highly appreciated the success of this conference as well as the effective discussions on climate cooperation between the two countries. Ms. Amelia Tang affirmed that the Agreement to implement Article 6 of the Paris Agreement is not only of bilateral significance but also a symbol of ASEAN's strong commitment to promoting the regional carbon market.

Singapore attaches special importance to this agreement, as it will be the first document that the country has signed within the ASEAN bloc, and Vietnam is the pioneering partner.

On the Vietnamese side, Minister Do Duc Duy said that the two sides have made important progress and are entering the final stage of completing legal procedures. Currently, Vietnam has completed the draft amendment to Decree 06 on carbon market development. This document has received consensus from Government members and is now waiting for the Prime Minister to sign and issue it, expected in April 2025.

The Ministry has also coordinated with the National Climate Change Secretariat and relevant agencies of Singapore to exchange and share information and experience on implementing carbon tax policies, carbon credit markets, managing and developing greenhouse gas mitigation activities, and developing a draft Implementation Agreement.

To carry out the signing procedures in accordance with Vietnamese law, the Ministry of Agriculture and Environment has sent the Ministry of Justice and the Ministry of Foreign Affairs of Vietnam for comments on the dossier submitted to the Vietnamese Government on the negotiation and signing of the above Agreement so that it can report to the Government for comments on the signing of the Agreement.

Both sides expressed their hope that the agreement could be signed as soon as possible, ideally within the framework of the ASEAN Summit taking place next May.

“Win-win” cooperation

Both sides emphasized the importance of practical implementation immediately after the agreement was signed. Minister Do Duc Duy proposed to identify specific projects for Singaporean enterprises to cooperate in implementing in Vietnam. In particular, the field of renewable energy, especially offshore wind power, was identified as the focus.

According to the Minister, offshore wind power development has previously faced difficulties due to the lack of a legal framework. However, since March this year, the Electricity Law and related guiding documents have been completed, creating favorable conditions for foreign investors, especially from Singapore, to study and propose projects. These projects not only contribute to Vietnam’s green energy transition but can also provide clean electricity back to Singapore in the future.

Another notable point is the integration of green development into VSIP industrial parks, a symbol of economic cooperation between the two countries. With 18 industrial parks in 13 provinces and cities, Vietnam is calling for green investment projects to generate carbon credits, contribute to Vietnam's Nationally Determined Contribution (NDC) ,and transfer a portion to Singapore. This is considered a 'win-win' cooperation model, receiving support from both investors and industrial park management agencies in Vietnam.

Singapore expressed its deep interest in economic and environmental cooperation opportunities in Vietnam. The Deputy Director of the Prime Minister's Office of Singapore said that the Singapore Ministry of Trade and Industry has established a specialized team to support Singaporean businesses in accessing the carbon credit market. After the official document is signed, Singapore is ready to coordinate and send business delegations to Vietnam to survey, learn and promote specific projects.

Notably, the Singaporean Government is currently planning to establish an international alliance on voluntary carbon credits, not only to serve the NDC but also to open up opportunities for credit trading in the free market and expressed its hope that Vietnam could consider joining this initiative.

Responding to the proposal, Minister Do Duc Duy said that he is building a roadmap for developing a carbon market that not only aims to contribute to the NDC, but also promotes a free market in accordance with international practices and domestic laws. The Minister emphasized that large emission-emitting industries such as steel, cement, and thermal power have now been subject to emission quotas. The demand for purchasing carbon credits to maintain production will therefore increase. Therefore, the Minister suggested that Singapore coordinate the development of a set of specific guidelines for the voluntary carbon market.

Singapore welcomed and affirmed that it will soon send detailed documents on the carbon credit alliance initiative to Vietnam, and is ready to discuss and answer all questions from Vietnamese authorities to realize cooperation in this potential field.