Page 61 - Ebook HTKH 2024

Foreign investment in environmentally friendly sectors is being drawn to Vietnam
through various policies, regulations, and tax incentives. The 2020 Law on Investment

offers tax benefits for green industry investments, including a corporate income tax rate
of 10% over the 15-year period on eco-friendly projects and renewable energy
initiatives, which is half the standard 20% rate . Vietnam also implements a feed-in
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tariff (FIT) scheme, guaranteeing fixed prices for renewable electricity generation, thus
providing investors with a stable revenue stream and reduced financial risks. Vietnam's
participation in economic agreements facilitates the development of green and services
products. The European Union (EU)- Vietnam free trade agreement (EVFTA) is a prime
example of promoting eco-friendly trade by lowering tariffs on such goods. The country

has also established the Vietnamese Energy Efficiency and Conservation Fund -
VEECF, which offers financial support and incentives for developing energy projects
with certain efficiency levels across various sectors, such as agriculture, construction,
and transportation systems. Furthermore, the Vietnam Green Growth Strategy (VGGS)
has been adopted, which serves as a guide for green growth initiatives in this Southeast
Asian nation. This framework is designed to decrease carbon emissions, boost the

efficiency level of energy usage, and enhance sustainable economic and social
development.
3. Current situation of renewable energy resources in Vietnam
The positive prospect of renewable energy resources in Vietnam is attributed to
some elements as follows. The first factor is Vietnam's high domestic electricity
consumption, which presents opportunities for outside enterprises to invest in Vietnam’s
power industry, particularly in renewable energy. Next, Vietnam possesses several
natural geographical advantages that render it well-suited for developing renewable
energy, particularly solar and wind power. Additionally, the Vietnamese government

has also implemented supportive policies for developing renewable energy, such as tax
incentives and price mechanisms to attract electricity purchases from renewable power
projects.
Given the abundant potential of solar, wind, and hydropower, there have been
impressive results made in developing renewable energy in Vietnam. The proportion of
this energy in the past four years has exceeded 55.6% of Vietnam’s total power supply.

Table 1. Share of renewable energy in total electricity capacity in Vietnam (%)
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Share 46.7 43.7 43.8 41.7 41.1 47.7 55.8 56.2 56.7 55.6

Source: IRENA (2024), “Renewable energy statistics 2024”, International
Renewable Energy Agency, Abu Dhabi.
The swift expansion of sustainable energy technologies, particularly solar and
wind power, has boosted the capacity and production of the Vietnamese electrical grid
while lessening reliance on conventional energy sources (see Table 2). Grid-connected

24 Emerhub (2023), “The Rise of Green Investments: Opportunities for Sustainable Investment in Vietnam”,
14/6/2023, https://emerhub.com/vietnam/green-investments-opportunities-for-sustainable-investment-in-vietnam/

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