Vietnam Plans to Implement New Environmental Fee for Emissions

Vietnam Plans to Implement New Environmental Fee for Emissions

Vietnam’s Ministry of Finance (MoF) has taken a significant step towards addressing environmental degradation by seeking public feedback on a draft decree outlining a new environmental protection fee for emissions. Initially, the fee will be implemented for entities releasing pollutants, specifically targeting businesses engaged in steel production, metallurgy, inorganic chemical manufacturing, inorganic fertilizer production, chemical-based plant protection products, oil refining, waste recycling, hazardous waste treatment, thermal power, and cement production.

Under the proposed regulation, facilities emitting pollutants will be required to pay an annual fixed fee of VND3 million ($126.58). In addition, a variable rate ranging from VND500 (2 US cents) to VND800 (3 US cents) per tonne will be applied to four major pollutants: total dust, nitrogen oxides, sulfur oxides, and carbon monoxide. Sites with continuous automatic emissions monitoring will need to submit quarterly environmental fee declarations by the 10th day of the first month of the subsequent quarter. Late fee penalties, as stipulated in the tax administration law, will be imposed for any delays in fee submission. Payments can be made through bank transfers to dedicated fee-collection accounts or in cash.

By introducing these fees, the MoF aims to incentivize businesses to invest in cleaner technologies that reduce emissions and minimize environmental harm. This initiative aligns with the government’s commitment to prioritize air quality protection. The proposed fee structure is modeled after the environmental protection fee framework for industrial wastewater outlined in Decree No.53/2020/ND-CP. This alignment is intended to enhance the efficiency of public service execution, optimize the use of resources, and simplify the fee submission process for stakeholders. Emission quantities will be determined based on monitoring data to ensure fairness among businesses. These measures will also empower the public to oversee the fee submission process of polluters, enabling timely reporting of violations to relevant authorities.

The explanatory note accompanying the draft decree highlights the worsening air quality in major cities and industrial zones as Vietnam undergoes economic and social development. The deteriorating air quality poses significant threats to public health, the economy, and the environment. With approximately 5.1 million cars, a large number of motorcycles, and numerous industrial zones emitting substantial amounts of pollutants daily, the situation is concerning. Vietnam currently hosts nearly 120,000 industrial manufacturing units, with 138 categorized as causing severe environmental pollution according to Decision No.1788/QD-TTg. Additionally, around 110,000 construction businesses contribute significantly to emissions, further impacting the environment.

Efforts to comprehensively address these pollution sources have been incomplete thus far, and many firms releasing pollutants lack awareness of their responsibilities in protecting air quality. Therefore, the MoF believes that the introduction of this environmental protection fee for emissions is crucial. It aims to institutionalize the objectives of the government and the Party, strengthen the legal fee system, meet current demands, and gradually raise awareness among emitting entities about the importance of environmental protection.

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