International and domestic experts gathered in Ha Noi yesterday, 19 February, 2009 to discuss methods for the development of a Clean Development Mechanism (CDM) market in Viet Nam. The CDM is a flexible financing mechanism under the Kyoto Protocol that allows countries with binding emissions reduction targets to develop projects in developing countries.
With an eye towards raising awareness of the CDM financing mechanism while exploring business opportunities in Viet Nam, Danish speakers introduced procedures and the most promising CDM sectors in Viet Nam.
The conference was an important occasion for Danish and Vietnamese companies and CDM actors to discuss the CDM potential in Viet Nam, said Danish State Secretary Mrs. Anne H. Steffensen, Head of the Trade Council, the Ministry of Foreign Affairs of Denmark.
Developing CDM projects in Viet Nam would make climate friendly investments feasible while contributing to fighting global climate changes, she said.
CDM projects include initiatives that use environmentally friendly technology that prove to generate little or no greenhouse gas and are recognised by the International CDM Executive Board.
According to experts, the most promising CDM sectors in Viet Nam included renewable energy from hydropower and wind, biomass residues from sugar, rice, wood production and agriculture, and waste from landfills, waste water and animal waste.
CDM allows emission reduction projects that contribute to the sustainable development objectives of the host country to sell the Certified Emission Reductions (CERs) resulting from CDM projects.
By investing in production improvements or new technologies where a Vietnamese company reduces its use of energy, the company can obtain payment for the energy savings resulting from the investment.
According to a representative from the Danish Embassy, by engaging in a CDM activity all parties have something to gain, thus creating more business opportunities.
At the same time, Viet Nam benefits from the CDM projects that contribute to sustainable development by improving the environmental conditions and bringing additional technology, know-how and economic benefits while the CERs buyer obtains a cost efficiency way of meeting reduction commitments under the Kyoto Protocol.
CDM is still relatively new to Viet Nam. However, the years 2008 and 2009 have shown increased activities and many new projects are underway. As of this month, two projects have been through the whole CDM project cycle and been registered at the UN, including the Rang Dong oil field associated gas project in southern coastal Vung Tau Province and the Song Muc small hydro power project in central Thanh Hoa Province.
Major CDM projects in Viet Nam are in renewable energy sector, primarily hydropower.
Addressing the workshop, Natural Resources and Environment Deputy Minister Nguyen Xuan Cuong praised the assistance of Denmark in developing the CDM market in developing countries, including Viet Nam.
"The Vietnamese Government attaches great importance to this market and has created favourable conditions and gives preference to CDM projects," he said.