The Ministry of Industry and Trade (MoIT) on March 5 launched a 158 million USD energy project to help key industries and enterprises with energy saving.

The Ministry of Industry and Trade (MoIT) on March 5 launched a 158 million USD energy project to help key industries and enterprises with energy saving (Illustrative image)

The “Vietnam Energy Efficiency for Industrial Enterprises” project (VEEIE) aims to promote efficient energy use and contribute to the country’s overall goals of energy efficiency and conservation, according to Deputy Minister Hoang Quoc Vuong.

The project, which was established by the World Bank (WB) and MoIT on December 29, 2017, and will last until July 2022, has a total budget of 158 million USD with two-thirds of the fund being financed by the WB’s International Bank for Reconstruction and Development and the rest being provided by the Vietnamese Government.

The financing provided by the WB includes two components – 100 million USD will be spent on developing energy-saving projects for key industries and 1.7 million USD will be spent on technical assistance for those projects.

"The project will remove barriers and create a favourable and sustainable environment for industrial enterprises to get access to medium- and long-term capital to implement their energy saving projects, contributing their efforts to the nation’s goal of saving energy, reducing greenhouse gas emissions and protecting the environment in Vietnam,” Vuong said.

He said that investing in energy-saving solutions can significantly reduce the increasing need for energy at a cost level that is a quarter of the spending on newly-established energy supply.

“According to the Vietnam National Energy Efficiency Programme (VEEP), the country has a lot of room for more energy-saving action,” the deputy minister said. By industry, the cement industry can save up to 50 percent of total energy consumption, and the figures for ceramics, coal, textile, steel and food processing industries range from 20 percent to 35 percent.

The Department of Energy Saving & Sustainable Development under the MoIT proposed the Government increase budget spending for energy saving projects in the period 2018-20.

Local enterprises need to be aware of the role of energy saving and efficiency in production and business activities, thus they need to further invest in technology and equipment renovation as the benefits of efficient energy management are always higher than the costs of investing and the costs can be offset by the returns on investment in a short period, the department said.

According to the MoIT agency, the national target programme on energy efficiency and utilisation in 2011-15 has saved 5.96 percent of total energy consumption, which is equal to saving over 11.8 million tonnes of oil.

The agency also reported that the energy consumption intensity of production industries that used to consume significant energy has dropped in the period 2011-15, such as steel (down 8.09 percent); cement (down 6.33 percent) and yarn (down 7.32 percent).

Vuong highlighted the efforts of the Vietnamese Government in improving energy efficiency in the country. However, “Vietnam is still one of the countries with the highest energy consumption intensity compared to other countries in the region and the world. In the national energy consumption structure, production industries account for the highest proportion, about 47.3 percent of total energy use.”

"Industrial growth is one of the main factors keeping Vietnam’s energy intensity high compared to other countries around the world," he said.-VNA