Member of the Central Committee of the Party, Minister of Natural Resources and Environment Do Duc Duy meeting with Chairman and CEO of Erex Japan, Mr. Honna Hitoshi

On September 23, member of the Party Central Committee and Minister of Natural Resources and Environment Do Duc Duy met with Mr. Honna Hitoshi, Chairman and CEO of Japan's Erex Corporation, for discussions. Accompanying the Minister were leaders from various departments within the Ministry of Natural Resources and Environment, including Le Ngoc Tuan, Director General of the Department of International Cooperation; Tang The Cuong, Director General of the Department of Climate Change; Hoang Van Thuc, Director General of the Department of Environmental Pollution Control; Nguyen Hung Thinh, Director General of the Department of Environment; and Pham Tan Tuyen, Chief of the Ministry’s Office.

Minister Do Duc Duy and Chairman and CEO of Erex Japan, Mr. Honna Hitoshi

During the meeting, Mr. Honna Hitoshi shared that EREX is one of the companies actively exploring and investing in the biomass energy sector in Vietnam. EREX is currently researching and proposing to implement 14 biomass power plant projects across 12 provinces, with a total capacity exceeding 1,000 MW. Notably, one 20 MW biomass power plant project in Hau Giang has already received support from the Japanese Government under the Joint Crediting Mechanism (JCM) and began construction in December 2022. The project is expected to be registered as a JCM project by 2024.

Chairman and CEO of Erex Japan, Mr. Honna Hitoshi

EREX has also received support from the Japanese Government to develop two additional 50 MW biomass power plants in Yen Bai and Tuyen Quang under the JCM. For these projects, EREX has proposed a carbon credit allocation that would satisfy all parties involved, including the governments of Vietnam and Japan, as well as EREX itself.

Minister Do Duc Duy expressing that the Vietnamese government is welcoming foreign enterprises like EREX investing in new technologies, reducing greenhouse gas emissions, and generating carbon credits

Minister Do Duc Duy commended EREX’s pioneering efforts in investing in greenhouse gas reduction and carbon credit generation, particularly in the biomass energy sector. The carbon credits generated from these projects will be tradable on Vietnam’s future carbon market. Additionally, depending on bilateral mechanisms and governmental priorities, these credits could be transferred to partner countries, contributing to the Nationally Determined Contributions (NDCs) of those nations.

Overview of the meeting held on the afternoon of September 23

In discussions with the EREX delegation about the development of Vietnam’s carbon market, Minister Do Duc Duy highlighted that regulations on organizing and developing the domestic carbon market have been incorporated into the 2020 Law on Environmental Protection and further detailed in Decree No. 06/2022/ND-CP. According to these regulations, the domestic carbon market includes activities related to trading greenhouse gas emission quotas and carbon credits obtained from both domestic and international credit exchange and offset mechanisms.

Minister Do Duc Duy presenting a gift and taking a commemorative photo with the delegation from Erex Japan

Currently, the Ministry of Natural Resources and Environment is reviewing and amending relevant legal documents to enable the trading of greenhouse gas emission quotas and carbon credits by 2025.

Regarding the Joint Crediting Mechanism (JCM), the Ministry has been working with the Japanese Ministry of the Environment and other stakeholders to review, supplement, and refine regulations and guidelines for project implementation under the JCM framework. This ensures compliance with the national regulations of both countries and alignment with international standards. Additionally, the Ministry has been accepting and exchanging project concept notes, registration documents, and new methodologies for JCM application.

Minister Do Duc Duy expressing hope that Erex and the Ministry of Natural Resources and Environment will continue cooperating effectively, further deepening the Vietnam-Japan relationship, especially in the fields of resources and environment

During the meeting, Minister Do Duc Duy and Chairman Honna Hitoshi also engaged in deeper discussions with their respective teams about the JCM and the Emissions Trading System (ETS). EREX has been applying technology to transition from using fossil fuels (coal) to entirely using biomass, making the company a leader in the biomass energy sector in Japan. EREX believes that using biomass fuel in coal-fired power plants helps maintain electricity production while promoting carbon neutrality, balancing economic efficiency with environmental considerations. EREX is eager to cooperate soon in converting fuel projects into JCM projects in Vietnam.

EREX proposed organizing a Joint Committee meeting between the governments of Vietnam and Japan to discuss and reach mutual agreements. They also suggested establishing a joint special working group to develop Vietnam’s ETS.

Minister Do Duc Duy acknowledged these proposals, valuing EREX’s pioneering role in investing in Vietnam and its long-term commitment to partnering with the Government in pursuing the NetZero target. EREX and its projects serve as exemplary models for Vietnam and Japan to evaluate and establish joint regulations for JCM implementation. The Minister tasked the Department of Climate Change with directly engaging with the company on JCM-related matters and emissions trading.

Furthermore, the Ministry will continue to expedite the organization of the 9th Joint Committee meeting to consider and approve important issues, facilitating activities within the JCM framework in Vietnam. The establishment of a special working group for ETS implementation will be thoroughly discussed between both parties, with specific plans to be developed.

Minister Do Duc Duy reaffirmed that the Vietnamese Government warmly welcomes foreign enterprises such as EREX that invest in new technology projects aimed at reducing greenhouse gas emissions and generating carbon credits. He encouraged relevant units within the Ministry of Natural Resources and Environment to continue supporting and providing information to EREX, enabling the company to swiftly invest in and implement more greenhouse gas reduction projects in the biomass energy sector in Vietnam. The Minister expressed hope that EREX and the Ministry will continue to have many effective collaborations, further deepening the Vietnam-Japan relationship, particularly in the field of natural resources and the environment.

Ngoc Huyen (NRE Newspaper)