Ministry of Finance proposes new environmental fees

August 22, 2023 - 08:45
Under the proposal, the environmental fees are composed of two parts: a lump-sum part and a per-unit part.
Wokers at a steel mill in Thái Nguyên Province. Steel mills would be made subject to the fees should the proposal becomes law. — VNA/VNS Photo Hoàng Nguyên

HÀ NỘI — The Ministry of Finance is calling for comments on a proposal to impose environmental fees on greenhouse-gas-emitting facilities, an effort to reduce their carbon footprint and incentivise greener practices.

Under the proposal, the environmental fees are composed of two parts: a lump-sum part and a per-unit part. The former is set at VNĐ3 million (US$125.7) per year per facility whereas the latter is between VNĐ500 and VNĐ800 per tonne for their emission of four major pollutants (particulate matter, nitrogen oxides, sulfur oxides, and carbon monoxide).

The introduction of the fees is projected to increase fiscal revenue by VNĐ1.2 trillion ($50.2 million), which could be used to tackle air pollution at the grassroots level. Facilities that would be made subject to the tariffs include steel mills, fertiliser plants, oil refineries, and thermal power generators.

The Ministry of Finance believes that the proposal would contribute significantly to the reduction of greenhouse gas emissions in Việt Nam by incentivising investments in eco-friendly technologies and accelerating the phase-out of environmentally-inefficient equipment.

Ngô Trí Long, former head of the Price Research Institute under the ministry, however, was not all for the proposal because he believes that what the Government should do amid the economic downturn is to abolish more fees to support manufacturers, not the other way around.

He also called its fairness into question by showing that the proposal would apply only to certain types of manufacturers while leaving others untouched.

"We must not introduce new fees unless we are sure that current fees have produced their desired effects," said Long.

Economic expert Lê Anh Tuấn shared Long's view. He said now is not the right time for the proposal because manufacturers had been debilitated by the economic downturn. New equipment and machinery to cut gas emissions would be too much for them during this tough time.

The expert was also concerned about the possibility that observatory organisations and manufacturers could collaborate to exploit the proposal.

Economic expert Nguyễn Khắc Quốc Bảo did not approve of the idea that its scope should be expanded to cover vehicle owners. He said vehicle owners had paid environmental fees once, which were factored into their fuel bills.

"If they are made subject to the fees defined by the proposal, they would be paying overlapping environmental fees," said Bảo.

With 5.1 million cars on the road, 120,000 manufacturing facilities, 110,000 construction companies, and a couple of dozen heavy-industry complexes in the country, the amount of pollutants released daily into the atmosphere has reached a point that demands tough action, according to the ministry. — VNS