VietNamNet Bridge – The Vietnam Clean Energy Association (VCEA) is preparing to propose revising up environmental protection fees on coal and oil to prevent an overexploitation of these fossil fuel resources.

A truck is seen transporting coal at Vang Danh mine in Quang Ninh Province. VCEA wants the Government to raise electricity prices for renewable energy projects and increase environmental protection fees on fossil fuels

The association also wants the Government to raise prices of electricity produced from renewable energy projects as one of the measures to attract more investments in clean energy projects.

The association’s chairman Ta Van Huong told the Daily on August 31 that renewable energy accounts for a small fraction of Vietnam’s total electricity output. To increase it to 4.5% by 2020 and 6% by 2030, the Government should offer more incentives and adopt appropriate policies to boost growth in the clean energy sector by adjusting up prices of electricity for clean energy projects.

Huong warned environmental pollution would worsen if Vietnam did not take bold measures to limit exploitation of fossil fuels and spur consumption of clean energy. Fees and charges imposed on coal and oil extraction are low.

VCEA plans to meet Deputy Prime Minister Hoang Trung Hai to suggest increases in prices of clean energy and environmental protection fees on the exploitation of fossil fuels like coal and oil.

The Government’s Decree 74/2011/ND-CP sets the environmental protection fee at VND100,000 (US$4.4) per ton of crude oil, VND50 per cubic meter of natural and coal gas, and VND6,000-10,000 per ton of other coal. The proceeds will be used to cope with negative impacts of such exploitation activities on the environment.

According to the Vietnam Institute of Geosciences and Mineral Resources, Quang Ninh Province is home to the biggest coal reserves in the country with over three billion tons. Coal in the northern province has been extracted for over 100 years.  

Other big coal mine basins in Vietnam include Thai Nguyen, Song Da, Nong Son and Song Hong (Red River).

Experts said Vietnam is not a country of huge potential for mineral reserves. Coal reserves are large but enterprises have to dig deeper to get it.

The Red River basin reportedly has hundreds of billions of tons in coal reserves but the mineral lies hundreds of meters deep, which makes extraction difficult.

Experts said firms usually calculate exploitation costs, investment capital and employees’ wages when deciding coal selling prices, and do not take costs related to environmental pollution, tourism and coal miners’ health into account.    

Meanwhile, Vietnam has great potential for renewable energy development as wind power is estimated at some 500-1,000 kWh per square meter per year, solar power at an average 5 kWh per square meter per day and hydropower at around 4,000 MW per annum.

However, renewable energy projects have been carried out at a snail’s pace as investors have shown little interest in them due to low electricity prices.

The price of wind power is 19 U.S. cents per kWh in Thailand and 21.8 U.S. cents per kWh in the Philippines but only 7.8-9.8 U.S. cents per kWh in Vietnam.

Established on August 29, 2015, VCEA has nearly 500 corporate and individual members active in the renewable energy sector.

SGT