REDUCING NET EMISSIONS TO ZERO BY 2050, POLICIES OF ENCOURAGEMENT FOR ENTERPRISES TO COOPERATE

Reducing net emissions to zero (Net Zero) by 2050 is Vietnam’s commitment at COP 26 – The 26th Summit of the Parties to the United Nations Framework Convention on Climate Change in 2021. Accordingly, the Government of Vietnam is committed to implementing the reduction of greenhouse gas emissions, towards Net Zero by 2050. The commitment will be challenging, but will also bring many positive opportunities for the Vietnamese economy as well as domestic and foreign investors oriented to technology transformation, renewable energy, timely grasping the trend of green growth.

National strategy on net emission reduction, green growth

The Government of Vietnam has issued the National Strategy on Green Growth for the period 2021-2030, with a vision to 2050, which sets out 10 strategic orientations with sectors, fields and 8 groups of solutions.

Strategic Objectives to contribute to promoting economic restructuring in association with growth model innovation, in order to achieve economic prosperity, environmental sustainability and social justice; towards a green, carbon-neutral economy and contribute to the goal of limiting global temperature rise, through:

– Reducing the greenhouse gas emission intensity per unit of GDP;

– Greenifying economic sectors in transformation of the growth model;

– Greenifying lifestyle and promote sustainable consumption;

– Greenifying the transformation process according to equality and inclusion principles and improve resilience.

The National Action Plan on Green Growth for the 2021-2030 period has also been approved by the Prime Minister with 18 topics, 57 groups of tasks and 134 specific activities, prioritizing possible solutions on technical, resource availability, co-benefits, and spillover potential. In particular, the target of the Plan is that by 2030, the proportion of renewable energy sources in the total primary energy supply will reach about 15-20% and 25-30% by 2045, greenhouse gas emissions from electricity production of about 42 million tons of CO2 equivalent by 2050.

Reducing net emissions, government and enterprise implement together

Resources are one of the important foundations for the successful and effective implementation of the Green Growth Strategy in practice, requiring the cooperation of the state and the community, people and businesses.

In fact, many businesses have applied technological transformation, using renewable energy and clean energy, significantly contributing to reducing emissions.

In addition, the State needs to play an appropriate directional role, effectively promoting the transition process associated with harmonizing national interests and investors.

>> CONDITIONS FOR ISSUANCE OF INVESTMENT REGISTRATION CERTIFICATE: https://linconlaw.vn/conditions-for-issuance-of-investment-registration-certificate-not-subject-to-approval-for-investment-guidelines/

>> PROCEDURES FOR ISSUANCE OF TEMPORARY RESIDENCE CARD FOR FOREIGN EMPLOYEES https://linconlaw.vn/procedures-for-issuance-of-temporary-residence-card-for-foreign-employees/

Policies of referential support, encouragement for enterprises to accompany

The State has adopted policies to encourage businesses to innovate, reduce greenhouse gas emissions, and contribute to improving the competitiveness of the economy through tax incentives for green growth. The Ministry of Finance has advised the Government to promulgate the provisions of the tax law, towards environmental protection:

a. Policies aiming to limit acts of causing environmental pollution, includes environmental protection tax, natural resources tax, special consumption tax for goods that cause harm to the environment…

b. Policies to support and encourage activities to protect the environment, reduce pollution and impacts of climate change:

– Corporate income tax (CIT): Preferential CIT rate of 10% for 15 years, tax exemption for up to 4 years and 50% reduction of payable CIT amount for no more than 9 subsequent years for with business income from new investment projects in the field of environmental protection.

– Value Added Tax (VAT): stipulates that the transfer of emission rights (carbon credits) is not required to declare, calculate and pay VAT; stipulates that goods and services that contribute to greening the economy are not subject to VAT. For example, services about flower gardens, parks, ornamental plants, and passenger transportation by tram are exempt from VAT.

– Special consumption tax: Preferential tax rates for products such as biofuels, environmentally friendly cars…

The process of green transition is completely appropriate when Vietnam is a country that was heavily affected by the negative impacts of climate change. This is also an important milestone demonstrating Vietnam’s determination in green and sustainable economic transformation in parallel with the goal of economic recovery and development after the Covid pandemic and integration of the green shift trend of the whole world.