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EU-invested expansion projects suspended over green energy standards

By Le Hoang

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HCMC – Several EU investment projects in Vietnam have put their expansion plans on hold as the country does not meet green energy standards, heard at a conference between Prime Minister Pham Minh Chinh and foreign investors.

The conference was chaired by PM Chinh at the Government Office this morning, April 22, and was connected online to 63 centrally-governed provinces and cities and around 80 overseas locations.

The chairman of the European Chamber of Commerce (EuroCham) in Vietnam, Gabor Fluit, said at the conference that clean and renewable energy acts as a catalyst for investment and growth, yet Vietnam has yet to satisfy the green energy standards. It has resulted in the suspension of expansion plans for some EU-invested investment projects recently.

To meet the energy demand in the future, the Power Development Plan VIII needs to be carried out, said Fluit.

Moreover, he suggested that Vietnam adopt direct power purchase agreements to encourage renewable energy producers, especially power plants in industrial parks, to join these agreements.

Bbusinesses should pay their recycling fees for 2024 and 2025, based on their production and import activities. Vietnam should enhance the enforcement of waste regulations and deal with violations, and promote the use of alternative materials such as biodegradable plastics.

Michael Michalak, regional managing director and senior vice president at the U.S.-ASEAN Business Council, proposed that Vietnam approve implementing a pilot plan for the Direct Power Purchase Agreement (DPPA) mechanism as soon as possible.

Moreover, he hoped the Government could simplify administrative procedures and shorten the time for reviewing and approving projects in the energy sector.

Hong Sun, chairman of the Korea Chamber of Commerce in Vietnam, pointed out that Korea’s investment in the manufacturing sector, the one with the highest foreign direct investment (FDI) in Vietnam, has significantly decreased.

Many Korean businesses have sought simpler administrative procedures and attractive incentives from Vietnam when considering expanding their Vietnam operations.

According to data from the Ministry of Planning and Investment, Vietnam attracted US$5.44 billion in FDI in the first quarter, down 38.8% year-on-year, equivalent to only 50% of the figure in 2019.

Speaking at the event, PM Chinh emphasized that the Government has been taking measures to reduce and offering tax incentives for FDI businesses, as well as extend the deadline for tax payment.

PM Chinh requested ministries, departments, and local authorities to work together and urgently propose solutions to problems faced by investors, and promote foreign investment attraction in Vietnam.

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