The Central City of Da Nang will make efforts to have US$161.8 million in software exports in 2024.

The Department of Information and Communications of Da Nang City has just said that in 2023, the total revenue of the Information and Communications industry is estimated to reach VND36,571 billion (US$1,4 billion), an increase of 8.1 percent compared to 2022 while software export turnover reached $147.8 million, reaching 101.25 percent of the plan, an increase of 12 percent compared to 2022.

Da Nang City has so far had background-based databases, about 100 specialized data shared for common use and 400 Internet of things monitoring devices that provide real-time data deployment for the construction of the Danang chain platform.

In particular, with the digital administrative procedure results database, people and businesses don’t need to submit paper copies, but also helps state agencies eliminate or reduce about 180 administrative formalities for re-issuance of residents’ personal papers which were lost or damaged.

With the theme ‘Universalization of digital infrastructure, creative digital applications to develop the digital economy - New driving force for economic growth and labor productivity’ in 2024, the Da Nang Information and Communications sector planned to strive to increase revenue by 8.9 percent compared to 2023 and achieve $161.8 million for software export revenue.

Forum hosted in HCMC to seek ways for real estate market recovery

HCMC yesterday held the forum ‘Real Estate Market in 2024 – Challenges and Recovery Opportunities’, attracting the participation of ministerial leaders and businesses in the field.

The HCMC Real Estate Association commented that 2023 was the hardest period for the real estate market. The activities of the HCMC market in the first six months of 2023 reached a negative growth rate of 11.58 percent. The annual rate, though more promising, was still a negative figure of 6.38 percent compared to other years.

Aware of that, the Government and ministries, related state agencies hosted various meetings to discuss feasible solutions for the real estate market to overcome difficulties.

In the forum this time, Director Hoang Hai of the Housing and Real Estate Market Management Agency (under the Construction Ministry) answered law-related questions, saying that the newly approved laws by the National Assembly were able to address about 70 percent of legal trouble for the real estate market.

Particularly, although the 2023 Housing Law and the 2023 Real Estate Business Law will not come into effect until January 1, 2025, the Government has already applied various measures to tackle existing problems.

In order for this market to improve, Deputy Minister of Construction Nguyen Van Sinh proposed that businesses in the field should actively adopt the following solutions:

Regarding investment sources, real estate enterprises should diversify their ways to attract capital, ranging from bank credit to channels to issue corporate bonds, stocks, investment funds, and financial leases. They should also introduce a detailed money allocation plan when mobilizing capital, reduce the financial leverage, and limit investment spread;

As to investment activities, businesses in the field should focus on completing on-going accommodation projects, especially social housing, worker housing, and below-market housing projects in order to increase liquidity. The quality, legality, and support public facilities for these products must be ensured;

Concerning product price, it is necessary for these companies to exercise measures to minimize costs and make the retail price more affordable, along with structuring those products according to real needs of the community.

HCMC business union proposes measures to speed up green growth

The Ho Chi Minh City Union of Business Associations (HUBA) has proposed a number of measures to help businesses overcome challenges and foster green growth and digital transformation this year.

Speaking at a meeting held on January 17 to review the association’s performance last year and set tasks for 2024, its vice chairman Nguyen Phuoc Hung called on the city’s administration to provide financial, legal and technological support to firms registering for green transformation.

He exhorted the central government to start a program for reducing greenhouse emissions with a specific road map, build a green index, establish a carbon credit market and develop rooftop solar power, helping businsses improve their competitiveness and participate in the global supply chain.

He urged the city to have solutions to attract new FDI inflows and reform long-standing industrial parks and export processing zones, speed up public investment and enable businesses to bid for public projects and borrow from the city’s stimulus program.

Vice Chairman of the municipal People’s Committee Vo Van Hoan praised HUBA’s contributions, saying it has played an important role in connecting the municipal administration and businesses, helped the city administration improve the investment environment and promoted administrative reform.

Considering the challenges this year, it is again expected to make a significant contribution to the economy and business sector, he said.

Hoan noted that the city has set two important tasks for the business community this year: adopting green growth and fostering digital transformation so that they could expand their international market share.

“Green growth is an inevitable development trend, and businesses must embrace it to meet requirements, especially in fastidious markets.”

He said the city would focus on three pillars this year: policies to help adopt green transformation, criteria to measure emissions by businesses and industries so that they could find ways to reduce them and creating a good role model for green growth.

It also plans to establish a center for supporting digital transformation, he said.

The city is welcoming a wave of foreign investment in semiconductors and artificial intelligence, and it is also an opportunity for businesses, he said.

They need to take advantage of this wave and participate in the supply chains of leading corporations, he said.

The city has sufficient resources in all aspects like land, industrial parks and high-quality human resources to meet the needs of these high-tech industries, he assured.

HUBA Chairman Nguyen Ngoc Hoa said last year it took a number of measures to help business overcome difficulties.

It passed on to authorities various recommendations made by businesses to remove hurdles they faced in many areas such as real estate and corporate bonds, and this helped eliminate many long-standing bottlenecks, he said.

This year it would organize programs such as the HCMC Economic Forum, HCMC’s ‘Exemplary Products and Services’ and Green Business Awards, ‘Business Café’, trade promotions at home and abroad, and trade fairs to showcase Vietnamese goods, he said.

Also at the event, the association launched the new interface of its website, huba.vn.

HCMC tax sector proactively tackles tax refund frauds

The tax sector in Ho Chi Minh City has proactively adopted preventative measures to deter people from committing value-added tax refund frauds.

Value-added tax (VAT) refunds in the past year have become a hot issue on many forums, because many businesses have been facing delays in receiving refunds on the value-added tax, affecting their production and business activities.

However, VAT refund fraud still occurred causing budget loss and inequality in business.

In early June 2023, the People's Court of Ho Chi Minh City heard a case related to Thu Duc Housing Development Company.

Among them, 18/67 defendants are tax officials who are being prosecuted for their involvement in helping a criminal group appropriate more than VND500 billion (US$20,295,728) in VAT refunds. This criminal group set up a series of domestic and foreign ghost companies, producing fake and poor quality goods, then carrying out untrue import and export procedures to increase the value of the goods, and then requesting a refund of VAT.

Similarly, the People's Court in the Northern Province of Phu Tho has recently brought to trial the case of the sale and purchase of more than 1 million VAT invoices, with an amount of over VND64,000 billion -the largest case ever.

After the detection of the sale and purchase of more than 1 million VAT invoices, the tax industry has announced a list of 524 high-risk businesses regarding invoices and thousands of businesses must explain their use of invoices.

According to Deputy Director of Ho Chi Minh City Tax Department Nguyen Tien Dung, recently many cases of VAT fraud have been discovered in the production of rubber, wood chips, and cassava starch. When verifying, it was discovered that foreign partners indeed did not exist, or foreign partners denied having transactions with domestic enterprises.

Elsewhere in the country, the Tax Department in the Southern Province of Dong Nai has transferred the files of three businesses to the investigation agency because of signs of fraud in VAT refunds. Director of Dong Nai Provincial Tax Department Nguyen Toan Thang disclosed that the total amount of tax refund fraud is up to VND679 billion.

According to the General Department of Taxation’s statistics, inspectors discovered many tax frauds in 2023 and collected more than VND1,035 billion from the amount of tax refunds for the state budget. Cases relating to the detection of VAT fraud or signs of fraud along with criminal trials for tax officials who gave a hand to help businesses commit tax fraud are considered to be one of the reasons for delays in tax refunds at times.

Faced with delays in VAT refund work, the General Department of Taxation accepts responsibility for the slow implementation of risk management when classifying tax refund dossiers according to regulations. Until the end of October 2023, the General Department of Taxation applied the automatic classifying of VAT refund dossiers in the sector according to risk assessment and scoring criteria.

While working with local tax departments that have a large backlog of documents such as Hanoi, Ho Chi Minh City, Ba Ria-Vung Tau, Binh Duong, Dong Nai, the Department of Tax Declaration and Accounting under the General Department of Taxation realized that the application of the automatic classifying VAT refund dossiers has resulted in a sudden increase in the rate of pre-checked and post-refunded records compared to the average of previous years.

Regarding anti-fraud solutions and effective implementation of VAT refund work in the coming time, Director General of the General Department of Taxation Mai Xuan Thanh said that inspectors must be proactive, not waiting for businesses to submit tax refund documents but must supervise firms in advance. Currently, more than 8,000 businesses countrywide regularly refund export taxes, so the tax sector should create long-term records on these businesses.

In 2024, the General Department of Taxation will focus on tax management and electronic invoices, recommending the completion of regulations to prevent the establishment of ghost businesses from illegally issuing and using electronic invoices to cheat on tax refunds and profit from the state budget. At the same time, the tax department proposed tax management mechanisms and policies in the direction of more clearly defining the responsibilities of tax authorities and tax officials with taxpayers when authorities detect fraudulent acts in tax refunds.

In addition, the General Department of Taxation will increase the application of information technology in tax refund processing, gradually automating and digitizing the process of receiving, processing and disbursing VAT refunds to ensure transparent and timely tax refund work in accordance with the law and prevent and prevent fraud as much as possible. It is hoped that the application of IT will help tax officials review business chains that buy and sell goods with tax refund businesses before receiving tax refund applications to help early identify high-risk tax refund cases and speed up tax refund time.

Tien Giang: Over 83,000 tons of fruit to serve Tet market

The total area of various fruit orchards in Tien Giang currently stands at 7,000 hectares, with an anticipated yield of over 83,000 tons.

The representative of the Sub-Department of Crop Production and Plant Protection of Tien Giang Province has just announced that the projected fruit production for the Tet market this year in the province is expected to increase by approximately 3,000 tons compared to last year.

Specifically, the total area of various fruit orchards in Tien Giang currently stands at 7,000 hectares, with an anticipated yield of over 83,000 tons. Among these, mangoes make up about 10,000 tons, green-skinned pomelos around 17,700 tons, star apples approximately 730 tons, and dragon fruits nearly 30,000 tons. Additionally, there are many other types of fruits intended for Tet celebrations, such as soursop, papaya, java apple, and pineapple.

Based on the evaluation from the agriculture sector in Tien Giang Province, farmers are facing increased challenges in producing this year's Tet fruit crop due to unfavorable weather conditions.

Mr. Vo Van Men, Director of the Sub-Department of Crop Production and Plant Protection of Tien Giang Province, advises that, at present, fruit trees are in the harvesting preparation stage.

Therefore, farmers should focus on watering and monitoring pest and disease conditions. It is not recommended to apply fertilizers, given the limited time left for harvesting. In particular, the use of growth stimulants should be avoided to prevent rapid fruit spoilage.

National economy welcoming abundant capital

The State Bank of Vietnam has set the entire credit growth rate at one time, helping commercial banks to actively adjust their business plans and timely supply capital for the national economy.

Due to a continuous drop in total demand, the Vietnam State Bank has issued a credit growth rate target of 15 percent in 2024 and assigned the credit room for each commercial bank right at the beginning of the year so that they can actively develop their own business plans. This is different from previous years, when the capital was sent in several rounds and the room could only be adjusted after bank proposals.

Receiving the credit room, all commercial banks immediately started to boost credit growth via preferential interest rate packages, loan rate reduction, and simplified loaning procedures. For instance, BVBank offers a preferential loan rate of 5 percent a year with 24-hour application review time for individuals with personal spending or house purchase/repair needs and businesses wishing to add more capital in manufacturing activities.

Similarly, Agribank has introduced a fixed interest rate of 7 percent and above per year for mid-term and long-term loans for business purposes, reduced the interest rate for real estate purposes by 0.5 percent a year. This is thanks to a double in credit room the bank receives this year, equal to VND175 trillion (US$7.1 billion).

Deputy General Director of TPBank Khuc Van Hoa shared that even though the credit room his bank receives in 2024 is the same as last year, at 16 percent, the allocation right at the beginning of the year, it is more convenient to divide the sum and set the priority fields.

The State Bank of Vietnam has set the credit growth rate target of 15 percent in 2024. This rate should be adjusted to suit the actual situation. The total outstanding credit balance of the whole economy at the end of 2023 was VND13.5 quadrillion ($550 billion). The credit amount to be released this year is estimated at VND2 quadrillion ($81.5 billion).

Standing Deputy Governor of the Vietnam State Bank Dao Minh Tu informed that the allocation of credit room at one time helps commercial banks to have a clear goal to achieve so that the economy can receive its needed capital on time. He added that if the macroeconomy is stable towards the end of this year and inflation is well under control, it is possible for the State Bank of Vietnam to deliver more credit room to commercial banks for an even higher credit growth rate.

Economic experts commented that the 15-percent credit growth rate means an abundant capital volume to be disbursed. However, whether the national economy can absorb this amount or not depends on the global economic status, which is forecast to see continuous trouble owing to the policy of anchoring a high exchange rate, leading to negative impacts on any economies depending on export activities like Vietnam.

Assoc. Prof. Dr. Dinh Trong Thinh from the Finance Academy stated that there were positive economic signs at the end of 2023. The number of newly established businesses in the fourth quarter last year enjoyed an increase of 20.2 percent compared to that time in 2022.

Orders for key export products in Vietnam such as textiles and garments, wooden furniture also witnessed a rise. The total retail sales of merchandise and consumer services in 2023 experienced a 9.6-percent growth as opposed to 2022. These are the signs that the national economy picture this year will be brighter, and thus reaching a credit growth rate of 15 percent is feasible.

Dr. Vo Tri Thanh – Head of the Institute for Brand and Competitiveness Strategy – said that whether a business can approach needed credit easily or not depends on various factors like its ability to absorb capital, the effort of commercial banks in reducing loan rates and simplifying loan procedures.

Dr. Can Van Luc – economic expert from BIDV – shared that a set target of 15-percent credit growth rate gives more space and flexibility for administration and monitoring. However, management agencies should exercise control measures over commercial banks to direct the credit flow into prioritized fields and growth driving areas. The situation of competing among banks on capital mobilization interest rates should be avoided at all costs to ensure the quality of credit and effectively control these rates in general.

Payment delays for Vietnamese black pepper, cashew exporters to Spain

A Spanish business that entered into contracts to import black pepper and cashews from Vietnamese counterparts exhibited signs of reluctance and delays in payment settlement, causing the Vietnam Trade Office in Spain to issue a warning.

On January 16, the Ministry of Industry and Trade cited the announcement from the Vietnam Trade Office in Spain, urging Vietnamese businesses to exercise caution when signing export agreements with a Spanish partner operating under the trading name "Isasa Siglo XXI, S.L."

According to the Vietnamese Trade Office in Spain, this company has recently faced criticism from several Vietnamese exporters of black pepper and cashews. Upon the goods' arrival at the receiving port, the company frequently resorts to excuses such as inadequate quality assurance or financial losses, resulting in delays in settling the remaining payment.

This situation has led to challenges, wasted time, additional storage costs, and necessitated the retrieval of goods by Vietnamese businesses.

Specific information about this partner is as follows:

Company: ISASA SIGLO XXI, S.L.

Representative: Mr. Manuel Gil or Ms. Annie

Headquarters: CALLE RIOGORDO, NAVE 4, ESTRELLA, 29006 MALAGA, SPAIN

Phone: +34 617 36 75 03; ‪+34 689 77 10 04

Email: info@isasaexport.com; isasa@isasaexport.com

Website: https://isasaexport.com/en/home/

Therefore, the Vietnamese Trade Office in Spain issues a warning to domestic businesses, advising caution when entering into purchase contracts with the mentioned company. The Trade Office suggests that businesses enhance collaboration with the trade office to verify the credibility of their potential partner before finalizing any purchase agreements to avoid risks and fraud.

According to the Ministry of Industry and Trade, in 2022, a fraud incident occurred involving 76 containers of Vietnamese cashew nuts exported to Italy, manipulated by a deceptive brokerage firm. Around July 2023, according to the Vietnam Pepper and Spice Association, five containers of cashews, pepper, cinnamon, and star anise from four Vietnamese companies were at risk of loss in Dubai, United Arab Emirates.

Experts emphasize that the risk of fraud in international business is exceptionally high. Vietnamese businesses should conduct thorough studies of international laws, adopt secure transaction methods, and steer clear of risky approaches.

17 produce chains in Hau Giang successfully linked to wholesale systems

Director of the Agriculture and Rural Development Department of Hau Giang Province yesterday informed the achievements in the agriculture sector of the province. 

Accordingly, Hau Giang Province now has three district-level units certified as meeting the new rural standards. 40/51 communes also met these standards (accounting for about 76.5 percent), including nine satisfying the advanced rural standards and two reaching the rural model ones.

Another prominent achievement is the classification of 266 agricultural products as ‘One Commune One Product’ (OCOP), consisting of 92 four-star rating and 174 three-star rating items.

More importantly, the agriculture sector was able to support the establishment of a food safety production chain for various merchandise items, especially seafood. Particularly, the bronze featherback fish chain in Hanoi now has an output of over 5 tonnes per month, the custard-apple tea chain of 300 kilos a month. The vegetables chain has entered many supermarkets, while the seedless lime chain is strongly welcomed in HCMC.

Until now, 17 produce chains in Hau Giang Province have obtained a certificate of safe product, eligible to circulate domestically and to export to other countries.

HCMC’s industry and trade sector sets targets for 2024

HCMC’s Department of Industry and Trade will deploy several measures to enable it to always stay ahead of trends, helping the city maintain its role as the economic locomotive and take the lead in innovation in the country.

The department targets 6.5 percent growth of its index of industrial production (IIP), 11 percent growth in retail sales of goods and services, and export turnover of businesses passing through the city's border gates to increase by 10 percent.

According to a report at a meeting held late last week in HCMC to review industrial production and trade in 2023 and set tasks for this year, the sector recorded a strong recovery last year, with the index of industrial production up by 4.3 percent, higher than the national average. The city’s total retail sales of goods and consumer services in 2023 increased by 10.8 percent, and total tourism revenue rose by 22 percent over 2022.

International visitors to the city surged by 44.3 percent and the number of newly established businesses increased by 10 percent.

Tourism revenue rose 25 percent from 2019 before the Covid-19 pandemic broke out to VND160 trillion (US$6.56 billion), the highest in five years.

Bui Ta Hoang Vu, the department’s director, said businesses would continue to face difficulties this year, such as lower demand in the country’s key export markets, stricter access to bank loans, raising input costs, unstable global supply chain, high logistics costs and others.

In order to realize the goals set out for 2024, the department will focus on developing the high-tech industrial sector, supporting industries, and the four key industrial sectors comprehensively, he said.

It would pay greater attention to promoting key industrial products and those with potential in 2021-2025 to foster development, and encourage and instruct enterprises to enhance digital transformation and green production.

It will step up export promotion to help firms expand markets, especially to countries with which Vietnam has free trade agreements.

The department would also seek to boost the development of e-commerce to meet consumption trends and develop the logistics sector into a key service sector.

Other plans included strengthening links between producers, distributors, and retailers, bolstering connections between businesses and banks to make it easy for enterprises to access bank loans, and setting up a commodity exchange and large-scale supply and distribution chains with the participation of leading retailers and logistics firms, farms and enterprises, he said.

Nguyen Van Dung, Vice Chairman of the municipal People's Committee, appreciated efforts made by the department and businesses last year.

Expecting businesses to continue to face difficulties this year, he asked the department to understand the operational situation of enterprises so as to propose measures and to focus resources to help solve their difficulties (if any) in a timely manner.

He urged the department to implement efficiently the investment stimulus policy for the industrial sector and supporting industries and continue to foster trade cooperation with other cities and provinces to help firms expand consumption markets, ensure a balance between goods supply and demand, and stable prices.

The city's industry and trade sector needs to improve its forecasting capacity to raise its management efficiency and better support the business community, he said.

HCMC yellow apricot blossom farmers rush to prepare for Tet market

With less than a month remaining until the Lunar New Year, yellow apricot blossom (Ochna integerrima) garden owners in Ho Chi Minh City are diligently getting ready to cater to customers.

It was recorded that the yellow apricot blossom cultivation area in Binh Loi Commune, Binh Chanh District, has expanded by an additional 10 hectares compared to the previous year, accompanied by an increase in the quantity of yellow apricot blossom trees for the Tet market.

Although there has been an expansion in both the cultivation area and production, local yellow apricot blossom growers have yet to receive many orders from traders. Consumption is somewhat sluggish.

 Customers tend to prefer using potted bonsai yellow apricot blossom trees during the Tet holiday.
Furthermore, due to a decrease in customer demand for yellow apricot blossom seedlings and intensified price competition with other areas like Long An and Ben Tre, growers are progressively transitioning to cultivating potted yellow apricot blossom trees for the Tet market.

Bui Ngoc Duc, the owner of Huu Duc yellow apricot blossom garden in Binh Loi Commune, noted, "Previously, our primary focus was on supplying yellow apricot blossom seedlings to provinces and cities. However, in recent years, farmers have gradually shifted their investment towards cultivating finished yellow apricot blossom trees in pots and creating bonsai designs."

He elaborated, "Part of the reason is the challenging economic conditions. Instead of purchasing a large yellow apricot blossom tree for up to millions Vietnamese dong, customers tend to buy in a small bonsai yellow apricot blossom pot, starting from only VND300,000, which still brings a festive atmosphere to their homes during Tet."

Hoang Quan yellow apricot blossom garden in Thu Duc City is currently gearing up for the leaf-removal phase in preparation for the Tet market. According to Trinh Hoang Quan, the proprietor, "This year, the Tet yellow apricot blossom market is presenting quite a challenge, lacking favorable conditions for growth. The number of customers are expected to decrease by approximately 20% compared to the same period, and Tet yellow apricot blossom prices are likely to decrease due to the prevailing economic conditions."

The peak season at the garden is typically divided into two times. Starting from the 15th day of the twelfth lunar month, the primary clientele served comprises businesses. For retail customers, the peak period typically commences from the 25th to the 30th day of the twelfth lunar month.

Meanwhile, the flower market remains relatively stable compared to previous years. According to Nguyen Thi Thanh Thuy, a flower business owner in Long Binh Commune, Thu Duc city, this year's order quantity is still on par with previous years, and the prices of various flower types are holding steady.

Despite the broader economic challenges, the Lunar New Year holds significant cultural importance for people. Flowers are indispensable part of Tet celebrations, making the flower market a focal point of attention and shopping interest.

Domestic carriers add flights amid Tet holiday travel rush

In anticipation of the strong Tet holiday travel demand, Vietnamese airlines have added over 90,000 seats to their schedules.

Carriers have seen a spike in ticket bookings for flights from Hanoi and HCMC to various destinations in the country.

According to a report from the Civil Aviation Authority of Vietnam (CCAV), airlines have secured additional flight slots at Noi Bai and Tan Son Nhat airports, resulting in an additional 472 flights and an expanded seating capacity of over 92,000.

Passenger bookings are on the rise, especially in the days leading up to and following the Lunar New Year in 2024.

The CCAV has assured that it will closely monitor the situation and recommend necessary adjustments to airlines to ensure balanced and increased capacity on high-demand routes during the Lunar New Year celebrations.

Domestic airlines have reported surging reservation rates on specific routes, particularly those departing from Hanoi and HCMC. Routes like Hanoi to Vinh and Hanoi to Dien Bien are already fully booked, highlighting the need for expanded capacity during this festive period. Similar trends are observed on return flights from provincial airports to HCMC.

To meet the high demand, domestic carriers have announced capacity enhancements and introduced new aircraft into service.

Limited supply poses a risk of electricity shortages

Limited supplies, a rise in demand, and exorbitant electricity purchase expenses could potentially result in electricity scarcity in 2024.

There is tremendous urgency to guarantee a reliable electricity supply this year. The Ministry of Industry and Trade (MoIT) mandated two weeks ago that Vietnam Electricity (EVN) submit the electricity assurance plan for the national power system by March 15. The plan must detail strategies for supplying fuel to thermal power plants, with a particular focus on the northern region during the dry season’s peak months in 2024.

The north could lack 1,200–2,500MW from late May to July, according to the general superintendent of Northern Power Corporation (NPC), Nguyen Duc Thien.

“The corporation has devised two power supply scenarios to prevent a recurrence of power shortages similar to the one that occurred in the summer of 2023. In doing so, the group was compelled to decrease its load capacity by approximately 3,952MW, which is equivalent to a reduction in output of 608 million kWh,” Thien said.

The NPC provides electricity for major industrial sites and manufacturers, with a concentration in the provinces of Nghe An, Hung Yen, Bac Giang, Phu Tho, Quang Ninh, Thai Nguyen, Nam Dinh, Thanh Hoa, and Vinh Phuc.

Importing electricity from China is part of the NPC’s strategy to ensure the north has an adequate power supply this year. Thien disclosed that the organisation intends to procure electricity from two different sources in China.

EVN is preparing power sources for a high development scenario in which the electricity growth rate is 9.4–9.8 per cent and GDP increases by 6–6.5 per cent.

The general director of EVN, Nguyen Anh Tuan, is apprehensive that alterations in the source structure could potentially introduce hazards and repercussions to the power supply strategy in 2024.

“At present, EVN possesses a mere 37.2 per cent of the overall power capacity, while PetroVietnam and Vinacomin each own roughly 10 per cent. The remaining capacity is under the ownership of the private sector,” Tuan said. “The overall system capacity has been recorded at 80,556MW in 2023. However, actual mobilisation is considerably lower, and the power reserve is also quite limited.”

The escalating expense of procuring electricity contributes to further complications for the power source. At present, market prices account for an exclusive 45 per cent of electricity production, with the cost of renewable energy being equivalent to the production expenses of EVN. The mean cost of electricity purchased by EVN is 8.6 US cents per kilowatt-hour, whereas the electricity is sold for approximately 8 US cents per kWh. This forces EVN to sell its electricity at a loss of 0.6 US cents per kWh.

EVN’s accumulated losses exhibit a persistent upward trend in 2023, notwithstanding the implementation of two price adjustments for electricity – a 3 and 4.5 per cent increase, respectively.

Tuan verified that the group’s financial situation “is insufficient to cover the costs of electricity production.” The aggregate cost of electricity generation, transmission, and distribution amounts to approximately 8.6 US cents per kWh. However, the prevailing average retail electricity price of merely 8 cents per kWh results in an accumulated loss for the group for the second year in a row.

In early December, EVN submitted a report to the MoIT disclosing its financial setbacks for 2023, which amounted to an estimated $696 million. Of this amount, EVN alone incurred a loss of just over $1 billion. This group incurred a similar loss in 2022 due to electricity production, trading, and other associated activities.

“Fundamental deficiencies within the electricity price mechanism are imposing economic strains on the group. We will be unable to achieve financial equilibrium if the practice of selling at a loss persists,” Tuan said. “We advise the MoIT to expeditiously present amendments and supplements to EVN’s regulations for governmental approval, along with the policy of importing electricity sources into Laos.”

The MoIT has issued Decision No.3376/QD-BCT authorising the electricity supply plan for April through to July 2024, the high months of the drought season. The ministry approved the plan to provide operational backup in response to EVN’s request, ensuring power supply for the national power system.

During the peak months of the dry season in 2024, the entire nation will import 109.183 billion kWh of electricity produced by power plants at generator terminals.

Vietnam moves into gear to ensure petroleum supply

Vietnam has placed priority on ensuring a robust supply of petrol in 2024 to avoid any fuel shortages amid market fluctuations.

The Ministry of Industry and Trade (MoIT) estimates that Vietnam’s fuel demand will reach 28.42 million cubic metres in 2024. According to the Vietnam Petroleum Association, petroleum demand shrunk in 2023 after Vietnam’s economic growth slowed to 5.05 per cent last year.

However, domestic petroleum demand is forecast to increase dramatically in 2024 as prices and supply are affected by complex fluctuations in the global market, including unpredictable supply and prices of strategic materials, as well as geopolitical conflict.

With the disruption and price hike concerns, the prime minister has sent an official document requesting the MoIT and relevant ministries to implement solutions to avoid supply shortages in any situation.

Accordingly, the ministries will direct large petroleum traders, businesses, and petroleum retail stores across the country to formulate feasible business plans, ensuring sufficient stock to meet market demand. They should allocate sufficient manpower to meet demand during the Lunar New Year.

Minister of Industry and Trade Nguyen Hong Dien said, “It is important we plan beyond annual demand cycles to cover monthly and quarterly intervals as well. This plan should be adjusted flexibly. Key petroleum enterprises should ensure the strict implementation of the allocated total minimum petroleum supply with contingency plans.”

In any unusual cases, businesses should proactively report and propose policy mechanisms or situational solutions to state management agencies, Dien added.

“Petroleum is an important strategic material that has a great impact on the consumer price index and macroeconomic stability. Therefore, it is vital to operate according to market mechanisms while still ensuring the state’s role in regulating this commodity to maintain supply and avoid disruption,” the minister added.

Many companies are gearing up to ensure a stable supply of petroleum in 2024. MoIT has allocated Vietnam National Petroleum Group (Petrolimex) to source 1.5 million cu.m per tonne of petrol. This figure is up 12 per cent compared to Petrolimex’s sales output in 2023. For diesel products assigned by the MoIT, the increase will be 22 per cent compared to the group’s sales output in 2023.

Tran Ngoc Nam, deputy general director of Petrolimex, said, “This month the group has secured purchasing sources from two factories in Vietnam as well as exports, an increase of about 10 per cent compared to the average assigned output. With early preparation and close collaboration with two local oil refineries and trading partners, the group is committed to fulfilling its responsibility. The group develops purchasing plans to ensure an effective business plan and supply.”

Likewise, PetroVietnam will ensure petroleum supply equal to 2023 when its supply exceeds the proposed target. Meanwhile, Military Petroleum Corporation is assigned a 2024 quota that is 30 per cent higher than that of 2023.

In 2023, Nghi Son Refinery and Petrochemical and Binh Son Refining and Petrochemical recorded the output exceeding its designed capacity, contributing to the stable supply for the local market. However, there were some sporadic shortages across the country. Some key enterprises have not strictly complied with the allocated total minimum petroleum supply as well as other regulations such as warehouses, yards, minimum trade reserves, compliance with tax obligations, or management and use of stabilisation funds.

Therefore, the MoIT proposed that the Ministry of Finance, the State Bank of Vietnam, and other ministries coordinate to regulate petroleum, proposing solutions to avoid disruptions for the rest of the year.

Vietnam exceeds decarbonisation rate targets set by Nationally Determined Contributions

Vietnam is among five Asia-Pacific economies that have exceeded the decarbonisation rate targets outlined by their Nationally Determined Contributions (NDCs), according to PwC's Net Zero Economy Index 2023.
 
PwC's Net Zero Economy Index 2023 that was released on January 17 reveals that the Asian-Pacific region reduced its carbon intensity by 2.8 per cent in 2022, more than doubling the 2021 rate of 1.2 per cent. It also states that only five countries met their NDC targets in 2022.

Asia-Pacific economies were responsible for 48 per cent of global emissions in 2022. While the region’s decarbonisation rate was ahead of its counterparts in the same year (at 2.8 per cent versus 2.5 per cent globally), it still needs to decarbonise six times faster to reach the 17.2 per cent that is required to limit global warming to 1.5 degrees Celsius above pre-industrial levels.

PwC’s Net Zero Economy Index tracks the decarbonisation of energy-related CO2 emissions worldwide by measuring levels of energy consumption relative to GDP, and the carbon content of that energy. The 2023 index shows that none of the Asia-Pacific economies' decarbonisation rate in 2022 came close to the rate required to align with a 1.5 degree target, however, only five economies – New Zealand, Pakistan, South Korea, Singapore, and Vietnam – exceeded the decarbonisation rate targets set out by their NDCs.

The common factor among these economies is that they are net importers of energy, and most of them experienced a drop in their fuel demands. Excluding Pakistan, which experienced a severe energy crisis amidst rising global energy prices in 2022, resulting in a 15 per cent decarbonisation rate, the economies with the highest decarbonisation rates include Singapore (10.8 per cent), New Zealand (8.5 per cent), Vietnam (6.5 per cent), and South Korea (4.4 per cent).

Despite these tentatively positive signs, other economies’ decarbonisation rates slowed down in 2022 compared to 2021, and some experienced an increase in carbon intensity. The evidence clearly shows that most economies saw a noticeable gap between their NDC decarbonisation ambitions and their actual performance in 2022.

Vietnam is ranked among economies that are making negative or slow process in reducing their carbon intensity, and which still heavily rely on fossil fuels to sustain their economic growth. However, the CO2 levels for this group are generally lower than the G7 average, meaning that a reduction in fuel demand could significantly reduce carbon emissions.

Abhinav Goyal, director of Capital Projects and Infrastructure at PwC Vietnam stated, "Vietnam’s updated NDC shows significant strides towards prioritising sustainability, emphasising renewable energy adoption, and more ambitious emissions reduction targets, reflecting a strong commitment to climate action."

"While the NDC seems to be in line with Vietnam’s ambition of achieving net-zero by 2050, more can be done to accelerate the progress. This change requires collaborative action from both the government and businesses."

"Furthermore, embracing the clean energy transition isn't just an environmental imperative, it also presents a wealth of untapped opportunities. By implementing its climate goals, through a blend of effective policy and mitigation strategies, Vietnam can receive financial and economic benefits through attracting sustainable investment, creating more jobs, and becoming a pioneer in clean technology," he added.

Erex to put $101 million into biomass plant in Vietnam

Erex Corporation, a Japanese firm specialising in supplying electricity sourced from biomass, has just unveiled plans for a pioneering 50MW biomass power plant in the central province of Binh Dinh.

This proposal, detailed in a recent disclosure by Binh Dinh Department of Planning and Investment on January 17, aligns with Vietnam's broader strategy to combat climate change and bolster renewable energy sources.

With an estimated production capacity of 296.4 million kWh per annum, the proposed facility underscores a robust approach to green energy.

The project will require an investment of approximately VND2.4 trillion, equivalent to around $101 million.

The commitment highlights Erex's position in the region's rapidly evolving renewable sector. The selection of the project site, anticipated to span between 15 and 20 hectares, is already underway with a focus on areas that can offer optimal infrastructure connectivity and minimal ecological disruption.

This aligns with the stringent environmental norms the plant intends to meet, including controlled emissions of dust, nitric oxide, and sulphur oxide.

As for the developmental timeline, Erex targets initiating construction by 2027, with the subsequent phases of equipment procurement and installation to follow. The plant is expected to commence commercial operations by 2030.

Erex is also collaborating with Vietnam's Energy Institute under the Ministry of Industry and Trade. This partnership involves crafting specific criteria for the project and conducting essential site-selection research.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes