Environment & Water Technologies in Vietnam
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ENVIRONMENT & WATER TECHNOLOGIES IN VIETNAM April 2016
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Transcript of Environment & Water Technologies in Vietnam
ENVIRONMENT & WATER TECHNOLOGIES IN VIETNAM
April 2016
2
Country Characteristics
Economy Projected 5-7% annual GDP Agriculture: 20% of GDPIndustry: 40% of GDP. (projected 60% of GDP by 2040)
Political One-party systemSOE large role in resource and financial sectorsKey actor in market entry procedures
WorkforceYoung and educated workforceVocational and professional skills development a top development priority.Technology and non-technology jobs supporting sophisticated infrastructure Civil Society
Largely limited in impact, however, the trend of participatory planning being normalised among private and public projects.
Presenter
Presentation Notes
Characteristics of Vietnam: Since 1986 liberal economic reforms have been largely successful in shifting from a traditional command economy to a heavily capitalist based economy that consists of both private and state owned enterprises within a single party state. During the past decade, the Hanoi based government has oscillated between promoting growth and emphasizing macroeconomic stability. As you well know, light manufacturing has been the greatest private sector success story, spearheading annual economic growth of 5% to 7% for the past 15 years.
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Air Pollution
Overview
.
Quantity of Assembled Transportation in Vietnam 1995-2014
Vietnam ranks 170 out of 178 countries in the annual Environmental Performance Index.
In 2016, Vietnam ranked 170 out of 178 countries in the annual Environmental Performance Index
According to Armand Peugeot Chair International Conference, nearly 70% of imported electric two-wheeler vehicles are e-motorbikes and 30% of those are e-bikes
Presenter
Presentation Notes
*Market overview and EU entry opportunities per sub-sector: Now let us focus on the specific subsectors that are especially relevant to Environment and Water in Vietnam. Air Pollution: First, there is the issue of air pollution. In 2016 Vietnam ranked 170 out of 178 countries in the annual Environmental Performance Index conducted by Yale University. The poor air quality is concentrated in urban areas as a result of traffic, construction, and industrial parks. Indeed, recent air quality index measures from Hanoi showed that the particulate matter 2.5 (PM2.5) was three times higher than national Vietnamese standards and seven times higher than World Health Organisation standards. For outdoor air pollution, transportation is the largest single source, while indoor air pollution can stem from most households inability to purify the air indoors, and from hazardous cooking facilities. Currently, the market for solutions tacitly related outdoor air pollution can be divided into electric two-wheelers and electric cars in Vietnam. While this market is dominated by Asian producers, recent years have seen an increase in European businesses entering the market both in the supply of electric cars and environmentally friendly buses. Indoor air quality is a much smaller market segment with very little public awareness surrounding it. However, one European supplier of air purifiers, IQAir, is a major player in this limited sector along with a number of Asian producers, mostly Japanese. European producers should ultimately remain cognizant of the fact that despite much furor internationally with respect to the progress of development in Vietnam, the World Bank estimate Vietnam’s GNI per capita at just $1,890 per annum, naturally limiting the size of any such product market.
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Air Pollution market
Indoor Air Purifiers Their prime market is industrial and large-
scale residential consumers (hospitals, offices, etc.).
Electric Transport Electric transportation (electric buses) are
planned in large cities and/or tourism cities, thus raising the demand for charging infrastructure.
Chinese bicycles and e-bikes exported to Vietnam reached 117,000 units, increasing by nearly 49% compared to the same period in 2012.
An electric car service was expected to launch in Ha Long City, home to the UNESCO-recognised Ha Long Bay to diversify its tourism products in June 2015 Total of 2.5 million units nationwide.
Opportunities
Presenter
Presentation Notes
While the market for indoor air solutions (particularly the retail market) is small, the market for outdoor air solutions, particularly electric two-wheelers, is growing steadily. Today it is estimated that there are already 2.5 million e-bikes on Vietnamese streets – a number that will continue to rise as the wealth of the average Vietnamese consumer steadily increases.
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Wastewater Treatment
Overview
Growing population and rapid urbanisation are allputting more pressures on the country’s water andwastewater management systems.
The majority of Vietnamese households rely on septictanks, but only 4% of septic tanks were treated in 2012.
Only 60 out of 219 industrial zones built since 2008have WWTPs
Water tariffs remain low, while capital investment and operation costs are high
Source: http://vietnamnews.vn/environment/
Presenter
Presentation Notes
Wastewater treatment: Demand for water used for both residential and industrial purposes has not been fully met in Vietnam since the 2000s because of inadequate, ageing and inefficient water and wastewater infrastructure. Currently, only 10% of urban households’ wastewater is treated. Traditional funding sources from the Asian Development Bank and World Bank are steadily drying up due to Vietnam’s recent middle income country status classification. Low water tariffs, high investment and operation costs have hurt private sector participation in the past. Private operators play a limited role in the municipal water sector, but recent policies promoting foreign direct investment towards urban waste water treatment plants. The water and wastewater equipment market is highly fragmented, with foreign and domestic companies competing. Ho Chi Minh City in particular has benefited the most from pilot PPP projects involving several municipal governments that allow private operators to work on new treatment plants, although it is still unclear which form such contracts will take.
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Wastewater Treatment
Opportunities
VietWater Expo and Forum, Ho Chi Minh City from 9-11 November, 2016.** EU companies can still book a booth for the exhibit by contacting VietWater: [email protected]
Presenter
Presentation Notes
The government has defined several urban water and wastewater targets to be achieved by 2025. The water sector is a priority in the country’s development plans, but the precise pathway toward achieving those goals has not always been clearly identifiable. Necessary investments are unlikely to be financed solely by the local government. US$1 billion of funds will be made available by the ADB by 2025; however, additional investment from other sources will be required. EU businesses looking to enter the Vietnamese market for wastewater solutions should take note of the upcoming VietWater Expo and Forum to be held in Ho Chi Minh City from 9-11 November, 2016. The forum will exhibit technologies and solutions for every industrial segment, including water supply, wastewater treatment and sanitation, purification, bottled water, water consultancy and management. EU companies can still book a booth for the exhibit by contacting VietWater: [email protected]
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Solid Waste Management
Overview
Waste separation at source is very limited
Common disposal technologies are burial, dumps and incineration
Urban and Industrial zones account for 72% of solid waste generation
2015 Vietnam Solid Waste Generation Source: UNEP, 2015
Presenter
Presentation Notes
Solid Waste Management: Another environmental concern is the management of solid waste. Vietnam produces an estimated 28 million tonnes of solid waste each year. The majority of solid waste produced in urban areas is not classified at its source. Promotion of private sector involvement in the waste management sector has been particularly strong. Private investment has increased in the last few years, totalling US$114.2 million annually according to latest figures. Urban and industrial zones account for the majority of waste generation of which 54% to 77% of urban waste is organic. Effective waste collection, transport, and treatment solutions are becoming increasingly important. Current infrastructures and technologies under state owned company URENCO are proving insufficient, especially in waste disposal. Current technologies and methods used are composting, incineration, land filling and red mud iron ore recovery.
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Solid Waste Management
Opportunities Environmentally effective disposal
services/technologies are sorelyneeded and are actively beingpursued
Legal and financial frameworkshave actively worked to promoteprivate investment in waste toenergy infrastructure
Solid waste-power plant has beenpriced at 10.05 US cents perkilowatt hour, currently the highestFIT in Vietnam
In 2015, Thanh Hoa Provincial People’s Committee has signed documents allowing Naanovo Energy Inc. to invest in a $100 million waste disposal plant. Source: http://thanhiennews.com.vn
Presenter
Presentation Notes
Recent government policies and decisions recognising the importance of waste disposal and environmental obligations provide credible opportunities for public private partnerships and joint ventures to take place specifically in the fields of waste to energy technology and consulting services. As of 2014, legal and financial frameworks have actively worked to promote private investment in waste to energy infrastructure. Most notable results include a government feed-in-tariff for renewable power generated from solid waste-power plant has been priced at 10.05 US cents per kilowatt hour, currently the highest FIT in Vietnam (higher than the tariff of 7.8 US cents fixed for wind power plants). However, barriers exist within the market, especially regarding transparency, unclear contracting terms, and final ownership stake in combined solution technologies. In general, there is a strong need for technology transfer and capacity building in all solid waste disposal related technology design and implementation. Solid waste management is showing as one of the leading beneficiaries of newly standardised Public Private Partnership procedures and regulations. This shows a very promising future for effective private sector participation in a rapidly expanding market.
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Recycling
Overview
In Hanoi, the informal sector collects and recycles 22% of all waste produced
URENCO has piloted a 3R project’ based on source […]However, it remains overtly true that the vast majority of waste in the capital remains unseparated.
Just 10% of the waste is said to be reused and recycled at present.
General Recycling Flows
Source:http://www.epa.gov/sites/production/files, 2009
Presenter
Presentation Notes
Recycling: A large part of solid waste generation in Vietnam can be recycled. Overall, Vietnam remains a high potential market in the field of recycling given that existing recycling plants are still of low productivity and using outdated technologies. Just 10% of the waste is said to be reused and recycled at present. By way of comparison, in Denmark some 70% and 95% of all waste and construction waste respectively are recycled, with just 6% of all waste turned to landfill.
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Recycling
OpportunitiesLess than 10% of e-waste ishandled by treatment facilities; anaverage of 9,000-11,000 tonnes peryear relative to an estimated total of113,000 tonnes in need of treatment.
As of 2011, the total pulp productioncapacity was 650,000 tons/year. Papermanufacturing capacity in Vietnam in2012 was about 2.1 million tons ofvarious paper types.
Source: http://www.vietnmaz.com.vn
Presenter
Presentation Notes
As you can see, the amount of rubbish discharged into the environment is increasing rapidly, thus requiring strong and specific solutions that include recycling to be chief among them. The Vietnamese government has issued various laws, regulations and policies to encourage the development of the recycling industry, however, these regulations appear as part of a broader environmental protection regime only, and have not received specific legislative attention. In terms of existing technologies, depending on specific sub-sector (paper, plastic, metal, etc.), recycling companies employ different tools. Recently, Seraphin, a new waste treatment technology developed by the Green Environment Technology Development Joint Stock Co., has been considered the best local solution available for the problem of garbage disposal faced in Hanoi, Ho Chi Minh City and other major cities in Vietnam. Overall, this market is mainly dominated either by state-owned companies or informal cottage industries, but as with many market segments relating to waste handling, final disposal and treatment facilities present strong opportunities for private business to construct and also operate. Joint ventures and partnerships are the most advisable route business can take when negotiating market entry.
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Recycling market
Worker involved in the informal recycling sector
Formal waste collection in urban areaExample of solid waste disposal sitein Phu Xuan commune-PhuVang District –Thua Thien Hue province (February 2016)
12
Soil Prevention
Overview
According to experts, industrial and agricultural chemical pollutants seriously jeopardize public health and food production, especially in the Red River and Mekong Deltas.
Soil Degradation, Vietnam
Source: http://www.icem.org.vn
Presenter
Presentation Notes
Soil Prevention: Vietnam’s soil integrity has undergone serious damage through intensive use of chemical agriculture, mining, industrial activities and persistent toxic chemicals remaining from the Vietnam - American War. The Vietnamese market for soil preservation products and services remains largely within the government’s own scope of work. For example, the Vietnam Academy of Science and Technology (VAST) launched a preparation called PAM (polyacrylamide) to reduce soil erosion in 2006. Each hectare needs about 7-12 kilograms of product priced at 35.000-40.000 VND/kg which farmers may purchase from VAST directly.
13
Soil Prevention
Opportunities VAST and other government ministries
are taking the lead in detoxifying soil in cooperation with foreign experts.
Recent water flow disruptions and drought in the Mekong Delta have intensified soil degradation and solution efforts.
Dioxin clean-up efforts at Da Nang International Airport
Source:http://theguardian.com.uk
Presenter
Presentation Notes
Local and foreign private sector participants have found credible entry points through erosion control products at targeting government contracts as well as new agricultural products such as seeds and fertilizers that limit soil degradation and erosion. It is strongly recommended that EU companies looking to enter the Vietnamese market for agricultural solutions also seek cooperation with the relevant Vietnamese ministries. Despite relative lack of awareness among the public, larger public health awareness and an expanding agricultural sector to supply a greater diversity of food will serve to put soil protection square within the priorities of both public and private agendas.
14
Noise Protection
Overview Many foreign companies
established cooperation with Vietnamese distributors difficult to evaluate and choose the appropriate distributors
Many distributors in Vietnam difficult to make difference (products, marketing, etc)
Noise protection does not attract much attention difficult to approach customers
Source: http://www.asialifemagazine.com
Presenter
Presentation Notes
Noise protection: Another burgeoning issue that is concomitant to rapid urbanisation is noise pollution, particularly close to popular urban thoroughfares. The noise volume in urban areas and industrial parks in Vietnam often exceeds locally permissible regulatory standards. In urban areas, besides noise pollution resulting from dense traffic, other important sources include music from commercial sales outlets being played at volumes above regulatory norms so as to attract custom.
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Noise Protection
Opportunities High noise pollution from traffic;
High noise pollution in industrial parks need advanced solutions (technology, equipment, etc)
Not many foreign companies operated in Vietnam less market competition
The government stipulates noise standard for public and residential areas increasing the need of having noise protection solution
marketTECOTEC Group has cooperated with OSK on installing nearly 10 gear measuring systems for major FDI customers in Vietnam, such as Honda Vietnam. Source: www.tecotec.com.vn
Presenter
Presentation Notes
Some governmental organisations such as the Vietnam Metrology Institute or the Centre for Environmental Monitoring (the Ministry of Natural Resources and Environment) have undertaken research into noise protection solutions. Traditionally, this has been a very sparse market both in supply and (crucially) demand. However, recently private companies such as such Golden Bridge and TECOTEC have started providing equipment and solutions for identifying and reducing noise pollution. The Vietnamese government is the dominant consumer of noise pollution equipment and services at this time. The government is still trying to find the most appropriate solution to deal with noise pollution in its main cities such as Hanoi and Ho Chi Minh City and in industrial parks. Effective enforcement of noise provisions is seen as the biggest barrier to market demand. Hence, this market holds a high degree of potential for foreign company participation and innovation in this market with a focus in enhancing tools to adequately enforce and follow standardised noise regulations
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Biogas
Digesters with the capacity of 100-200 m3…almost all of these digesters are operated by small to medium scale pig farms.
Floating Cover Biogas System
KT1 Model
The population of livestock in Vietnam has been increasing roughly 8% per year…predicted to reach 35 million pigs and 12.5 million cattle by 2020
Overview
Source: http://www.rural21.com
Source: http://www.renewableenergyvietnam.com.vn
Presenter
Presentation Notes
Biogas: Biogas has proven itself a maturing technology largely within the context of small to medium scale donor assisted systems that service the everyday energy needs of farm households. Planned intensification of animal husbandry, particularly large scale pig and cow farming, has revealed several promising opportunities toward satisfying increasing energy demand through scale increases of Vietnam’s biogas systems.
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Biogas
Management and advisory skills, international management,
Smart grid technology, financing services for market operations, and consultancy is demanded.
Gas recovery from landfill is not yet introduced, and is a high potential area of cooperation
Current biogas fuel including breeding, municipal, and agricultural waste totals 2,400 MW of potential electricity generation.
Opportunities
Presenter
Presentation Notes
A major constraint to the development of large scale biogas infrastructure is the lack of economical and environmentally sound ways to use access gas that cannot be consumed by a single household. Key actors in the biogas market involve government extension services and donor organisations such as Netherlands Development (SNV) who have collectively installed more than 100,000 small fixed dome biogas plants between 2003 and 2011. However, scalability has not been a viable option due to a weak legal framework. Currently, Vietnam has no standardised power purchasing agreement (PPA) price for independent private producers of biogas electricity. Contracts are individually negotiated with each project developer, with the state owned Electricity Vietnam company (EVN) acting as the single buyer. Recent legislation strengthening renewable energy markets with overall power market reforms has led the way for specific financial and fiscal incentives already in effect for biogas production. Joint ventures and fully owned subsidiaries have been the most common forms of market entry for private enterprise. There is a general need for knowledge transfer and capacity building in all bio-energy related technologies. Management and advisory skills, international management, smart grid technology, financing services for market operations, and consultancy is demanded.
18
Fresh Water Supply and Solutions
Overview The water loss rate by urban water supply systems remains high at a rate of 27%; equivalent to 1.83 million m3
of water lost per day.
There remains a huge rural water supply deficit, mainly located in central Vietnam and off the Mekong Delta . Ground water wells are the temporary but not sustainable solution to drought. In 2011, 37% io rural households supplied with clean water from utilities.
A number of water plants in HCMC have been struggling to get crude water from the Saigon and Dong Nai rivers for processing due to rising saltwater intrusion
Presenter
Presentation Notes
Fresh Water Supply and Water Solutions: With regard to supplying fresh water to the public, water supply services are largely provided by state owned enterprises. These companies manage the water distribution and treatment networks and directly collect fees from households that serve as the predominant funding source of the utility. Big cities such as Hanoi, Ho Chi Minh City, Hai Phong and Vung Tau have attracted many private investors to participate in the water treatment sector through build-operate-transfer (BOT) agreements and Build-Own-Operate (BOO) agreements offering raw water or roughly treated water for water supply companies. The first water supply project in the form of a BOO agreement, and also the first project awarded to a private company, was the Thu Duc BOO project, providing 300,000m3/day for Ho Chi Minh City. Traditionally, Scandinavian based companies have led the way in water treatment technology. The coming free trade agreement between EU and Vietnam will serve greater opportunities for companies to participate, especially in the technology and consultancy fields.
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Fresh Water Supply and Solutions
Opportunities A target reach of 75% of all households has been set for 2020, requiring an estimated investment capital of US$1.54 billion.
Peri-Urban areas outside Hanoi have introduced UV filtration rain water catchment costing less than US$400.
The Asian Development Bank stresses “Vietnam should develop pipe systems to concurrently irrigate crops and provide water for daily use while saving water.” -UN Water Workshop March, 2016
VietWater Expo and Forum, Ho Chi Minh City from 9-11 November, 2016.** EU companies can still book a booth for the exhibit by contacting VietWater: [email protected]
Presenter
Presentation Notes
Due to increasing stress on water supply, public service companies have been encouraged to gradually restructure into limited or joint stock companies. As a result, private enterprises have increasingly become involved in this segment, thereby, the sector has experienced an expansion in both scope and investment flows. Of the US$1.62 billion invested in the environment sector in 2014, water supply and sanitation accounted for 45% of the total investment. The investment need for urban water supply in Vietnam alone from 2016 to 2020 is estimated at US$3.3 billion. In the light of the government’s plan for water supply it is estimated that by 2025, water supply services will be provided to 75% with an average 120L/person/day. To reach that, decentralised and centralised solutions must be implemented. This brings a strong need for engineering services for water supply systems. Other services that are in need include consultancy services, construction, investment in water supply systems, supply of equipment and materials, manufacturing equipment and materials, technology transfer, separation and leakage avoidance.
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Regulations
Decree 15
Presenter
Presentation Notes
Regulations: One of the most significant changes to Vietnam’s legal architecture as it applies to foreign investors generally (i.e. not on a sub-sector specific basis) has been the enactment of Decree No. 15/2015/ND-CP (hereafter, Decree 15) on public-private partnership (PPP) investments. (Pictured is a discussion article by international commercial law firm, Allen & Overy; one of the biggest players in PPP project investment globally). Vietnam’s earlier PPP regulations had not been successful in attracting foreign investment on a PPP basis given that the certain regulations – mainly Decision No. 71 – only provide for a very basic framework with respect to PPP projects. Decree 15 took effect on 10 April 2015 and provides a single legal framework for private investments in the public infrastructure sectors. It also repealed previous regulations on build-operate-transfer (BOT), build-transfer-operate (BTO) and build-transfer (BT) investments, and the pilot PPP scheme. Decree 15 allows investors and PPP projects to mortgage assets, project development rights and land use rights in accordance with land regulations and the Civil Code. Accordingly, the current language of the regulation fails to clarify whether investors have an unequivocal right to mortgage the land. Investors and lenders will need to wait for the implementing regulations for either Decree 15, or the land law, or seek ‘special treatment’ on a case-by-case basis. Important ambiguities also exist over the extent of exchange rate risk protection that will be offered unconditionally by the government to foreign PPP investors.
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Regulations
Getting legal support in Vietnam
See website: http://www.vietnamlaws.com/
Presenter
Presentation Notes
Anybody who has attempted to navigate the splintered web of Vietnamese legal texts will tell you that finding the most up-to-date English language translations of recent Vietnamese legislative and regulatory enactments can be an onerous challenge. Vietnam Laws (see link) is a fully searchable English language legal archive provided by Allens; an international commercial law firm operating primarily in the Asia-Pacific region. For commercial law firms operating in Vietnam, this subscription only website has become a true industry standard and an essential part of a lawyers practices. Indeed, most all questions of law begin with a naïve search of key terms within the website’s text archive. For those European businesses seeking to enter the Vietnamese market, soliciting local legal counsel will be an expensive necessity, which may be difficult to bare for certain SMEs. To limit such costs as far as possible, businesses or their in-house council might consider subscribing to the service themselves (priced at US$900.00 for a 12-month single user membership). Using this research aid, businesses would then be able to ask detailed questions of law to their instructed solicitors, thus placing strong limits on the latter’s billable hours.
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