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In brief

The Ministry of Industry and Trade of Vietnam (MOIT) recently issued new Circular No. 25/2020/TT-BCT (“Circular No. 25”)replacing Circular No. 09/2012/TT-BCT (“Circular No. 09“)2 on the formulation and reporting on planning of economical and efficient use of energy (“Energy Efficiency Plan“). Circular No. 25 provides businesses with simplified and more straightforward procedures for registering and reporting on their Energy Efficiency Plan. This is one of the steps toward the implementation of the earlier-approved National Energy Efficiency Program for the period of 2019-2030 (VNEEP).3

Compared to the previous Circular No. 09, the new Circular No. 25 provides the following key changes:

  • Removing the overly burdensome administrative procedural requirements under Circular No. 09 to register and report on implementation of an annual/five-year Energy Efficiency Plan
  • Broadening the scope of energy consumers required to report on their annual energy consumption
  • Providing cases of exemption from energy audit

Registration and reporting requirements for making an Energy Efficiency Plan

Circular No. 25 provides new guidelines on cases where businesses and entities are required to register for and report on the implementation of their annual and five-year Energy Efficiency Plan, as follows:

  1. Major energy-using establishments (“Major Energy Consumers“) as determined below:
  • Industrial manufacture, agricultural production facilities, transport entities having total energy consumption per year from 1,000 tonne-of-oil equivalent (TOE)
  • Offices; houses; educational or medical facilities; entertainment, physical training and sports establishments; hotels; supermarkets; restaurants; shops having total energy consumption per year from 500 TOE
  1. Agencies or entities wholly or partly funded by State capital having annual energy consumption of over 100,000 kWh according to the customer list of EVN (“State-funded Entity“)

A Major Energy Consumer or State-funded Entity will be required to submit its registration and report on the implementation of its Energy Efficiency Plan to the relevant provincial-level Department of Industry and Trade (DOIT), on the website: http://www.dataenergy.vn.

Registration and reporting on the implementation of an annual Energy Efficiency Plan

Under Circular No. 25, Major Energy Consumers/State-funded Entities may now follow a simplified and paperless procedure to register their annual Energy Efficiency Plan, as follows:

  • By no later than 30 April every year, Major Energy Consumers/State-funded Entities must access the website http://www.dataenergy.vn and enter their data according to the instructions on the website. Within 20 days from receipt of the report, the DOIT will be required to review, respond and confirm the submission result on the website.
  • Upon receiving a request from the DOIT to supplement or adjust their registered contents, Major Energy Consumers/State-funded Entities must update their data accordingly on the website within 20 days from receipt of the DOIT’s request.

Circular No. 25 also provides for new templates of the annual Energy Efficiency Plan and the report on the implementation of this plan in the previous year, customized for State-funded Entities as well as different types of Major Energy Consumers, from industrial and agricultural facilities to commerce and service establishments.

A Major Energy Consumer/State-funded Entity is responsible for the full implementation of its registered annual Energy Efficiency Plan. For State-funded Entities, compliance with the Law on Economical and Efficiency Use of Energy is also required.

Registration and report on the implementation of a five-year Energy Efficiency Plan

Circular No. 25 likewise streamlines the procedures for Major Energy Consumers to register their five-year Energy Efficiency Plan and report on the implementation of their previous five-year Energy Efficiency Plan, as follows:

  • By no later than 30 April of the first year in each five-year period, Major Energy Consumers must access the website http://www.dataenergy.vn and enter their data according to the instructions on the website. Within 20 days from receipt of the report, the DOIT will be required to review, respond and confirm the submission result on the website.
  • Upon receiving a request from the DOIT to supplement or adjust their registered contents, Major Energy Consumers must update their data accordingly on the website within 20 days from receipt of the DOIT’s request.
  • The report on the implementation of the five-year Energy Efficiency Plan will be calculated and updated automatically via the national energy database system, based on the annual reports of Major Energy Consumers.

Circular No. 25 also provides for new templates of the five-year Energy Efficiency Plan and the report on the implementation of this plan customized for different types of Major Energy Consumers.

A Major Energy Consumer is responsible for the full implementation of its registered five-year Energy Efficiency Plan.

Annual report on energy consumption

Circular No. 25 broadens the scope of energy consumers required to report to the DOIT on their annual energy consumption:

  • Major Energy Consumers listed in the Decision of the Prime Minister issued in the previous year
  • Industrial manufacture, agricultural production, and transport entities having total energy consumption per year from 600 TOE (or from 3.6 million kWh)
  • Buildings and construction works having total energy consumption per year from 300 TOE (or from 1.8 million kWh)
  • State-funded Entities

Energy consumption reports are now fully submitted online through the website http://www.dataenergy.vn. The DOIT will provide the above energy consumers with login accounts and instructions for submitting their energy consumption data. In case of a request from the DOIT to supplement or adjust the energy consumption report, energy consumers must update their data accordingly on the website within 20 days from receipt of the DOIT’s request.

Application of the energy management model

Circular No. 25 requires Major Energy Consumers to apply the energy management model as provided in Decree No. 21/2011 of the Government.4 This model includes, among other contents, Major Energy Consumers’ objectives and policies on energy efficiency; annual and five-year Energy Efficiency Plans; energy audits; proposals; and selection of managerial and technological solutions for energy efficiency.

Major Energy Consumers must also access the website http://www.dataenergy.vn to report to the DOIT on their application of the energy management model in their annual plan of energy use.

Implementation of energy audits

Under Circular No. 25, a Major Energy Consumer must carry out an energy audit once every three years. The report on energy audit results will include full figures of survey data and specific calculations reflecting the status of energy use. The energy audit report must also include an analysis, calculation and evaluation of energy efficiency; evaluation of energy saving potential; and proposed energy-saving solutions, with a full analysis of the investment efficiency of each solution for consideration by the Major Energy Consumer.

The Major Energy Consumer must send the energy audit report to the DOIT within 30 days of the audit’s completion.

Under Circular No. 25, a Major Energy Consumer operating in the transport business industry may be exempted from implementing energy audits from the DOIT. Major Energy Consumers operating in several sectors, including transport operations, are only exempted from performing energy audits for transport activities.

Industrial, agricultural production, construction and transportation facilities/entities that are not classified as Major Energy Consumers are encouraged to periodically execute their energy audits in three-to-five-year cycles in order to identify energy savings opportunities and apply suitable energy efficiency measures.

Introducing new energy-related planning and reporting requirements, with little in the way of specific incentives or penalties, may leave enterprises wondering if the time and cost are worthwhile, and it is uncertain whether administrative fines will be an effective enforcement tool, enforced fairly.


1 Circular No. 25/2020/TT-BCT of the MOIT dated 29 September 2020 on planning and reporting on implementation of plan for economical and efficient use of energy; Implementation of energy audit.

2 Circular No. 09/2012/TT-BCT of the MOIT dated 20 April 2012 on planning and reporting on implementation of plan for economical and efficient use of energy; implementation of energy audit.

3 Decision No. 280/QD-TTg of the Prime Minister dated 13 March 2019 on approval of the National Energy Efficiency Program for the period of 2019-2030.

4 Decree No. 21/2011/ND-CP of the Government dated 29 March 2011 on implementation of the Law on Economical and Efficient Use of Energy.

Author

Frederick Burke is a member of Baker McKenzie’s Global Policy Committee, comprised of the Firm’s Managing Partners globally, responsible for driving the overall strategy of the Firm. He is also the Managing Partner of our Baker McKenzie offices in Vietnam, more particularly in Hanoi and Ho Chi Minh City. He has more than 30 years’ experience practicing in the areas of corporate law, real estate, international trade and is highly regarded for his work on foreign investment projects in Vietnam and China for key players in property development, trade, IT/C, and project finance, among other areas. Mr. Burke is the go-to advisor for big deals in Vietnam’s flourishing industries including: renewable energy, agribusiness, airlines, hotels, resorts and tourism and large scale infrastructure projects. He is currently the representative of the American Chamber of Commerce in Vietnam to the Prime Minister’s Advisory Council on Administrative Reform in Vietnam and he has been recognized by the Ministry of Justice of Vietnam for his “Outstanding contributions in the field of international legal cooperation”. Mr. Burke is consistently ranked as a Leading Lawyer in Corporate / M&A by leading legal publications in Vietnam (Legal 500 AP 2007-2018; Chambers and Partners AP 2012-2018; IFLR1000 2010-2018).

Author

Thanh Hai Nguyen is an Associate in Baker McKenzie's Hanoi office.

Author

Lan Phuong Nguyen is a partner based in the Firm's Ho Chi Minh City office. Ms. Nguyen is a member of the Lawyers Association of Ho Chi Minh City, the American Chamber of Commerce and the British Business Group in Vietnam.