Vietnam to levy emission fees on polluting industries

The Ministry of Finance has proposed the collection of emissions fees from production facilities that generate large volumes of industrial emissions and dust, negatively impacting the environment.

Under a draft decree on levying environmental protection fees for emissions that the ministry has put up for public feedback, they will be levied on iron and steel, metallurgy, coke, basic inorganic chemicals, inorganic fertilizers and nitrogen compounds, petrochemical refining, thermal power, and cement production facilities.

The ministry argues that along with rapid economic development, the air quality in big cities, industrial parks and craft villages across Vietnam has increasingly worsened, harming human health, the economy and the environment.

Emissions by production facilities and traffic are a major reason for declining air and environmental quality, the ministry says, noting that Vietnam has about 5.1 million cars and an even larger number of motorbikes in circulation; dozens of complexes mining bauxite, iron and steel and producing chemicals; as also power generation projects that inflict great harm.

In addition, there are nearly 120,000 industrial production establishments, of which 138 cause serious environmental pollution, along with about 110,000 construction enterprises.

“Most organizations and individuals that discharge waste causing air pollution are not fully aware of their responsibilities for environment protection,” the ministry says, emphasizing the need for a decree on environmental protection fees applicable to such facilities.

After several surveys and working sessions with localities, the ministry has concluded that in order to avoid incurring other costs, the fees and collection agency should be the same as those specified in Decree 53 for industrial wastewater.

Accordingly, there will be a fixed fee applied to all emissions-generating facilities that will be used to treat other pollutants besides total dust, NOx, Sox and CO; and a variable fee additionally collected from facilities that have to monitor emissions.

The ministry has proposed a fixed fee of VND3 million ($126) a year from the establishments, which can also be paid quarterly. The variable fees will be VND500-800 (21-34 U.S. cents) per ton of emissions, based on the proposal by the Ministry of Natural Resources and Environment (MoNRE), which also collect the fees.

The MoF calculates that the new fees will increase state budget revenues by VND1.2 trillion ($50.43 million) a year, contributing to overcoming air pollution in localities where the emission generating facilities are based.