Decision No. 1855/QD-TTg approving Vietnam’s national energy development strategy up to 2020, with a vision toward 2050

Article 1,- Toapprove Vietnam's national enet'BY development strategy up to 2020, with 2050 vision, with the following principal contents: I. Development viewpoints: aJ To quickly and sustainably develop energy in close association with the national socio-economic development strategy, in parallel with divetSifying energy sources and applying energy-saving technologies, which is considered a key task throughout the process of national industrialization nnd modernization. (C) VIETNAM LAW s LEGAL FORUM 3' OFFICIAL GAZETTE I&SIIe DOS Q3.Q9lQecpmber 2QD! (Gong Bao nos 07.(]8/January 5,2008) b/To develop national energy in line with the trend energy resources in a rational and efficient manner; of international integration, efficiently use domestic to diversify forms of investment and business in the resources and rationally exploit and use foreign energy domain, and develop an energy market resources, establish national energy security in the conducive to fair competition; to boost the open conditions, effectively enter into regional and development of new and renewable energies, bio- globalcooperation combined with firmly preserving energy and nuclear power in order to meet the national security and developing an independent and requirements of socio-economic development, self-reliant economy. especially in deep-lying, remoteandborderareasand cI To step by step develop an energy market, offshoreislands;and developing theenergy sectorin diversify forms ofownership andrreihods ofbusiness a quick, efficient and sustainable manner in and strivelo satisfyto theutmostconsumerinterests. association WIth environmental protection. To accelerate the abolition of subsidization and hi Specific objectives: monopoly striving to put an end to the pursuit of - To strive to supply adequate eoergy for socio- social polides through energy pnces. economicdevelopment, including about 47.5 - 49.5 dI To ";)'!lchronously and rationally develop the millionIDE (ton of oilequivalent) of primary energy system of dectricity, petroleum, coal, andnew and by 2010, about 100- 110 million TOEby 2020, 110 renewable energies, paying attention to the - 120millionTIJEby 202' and 3 10-320 milUon TOE develcprre..\ t of clean energies and prioritizing the by 2050. developrrent of new and renewable energies. To - To evaluate more accurately the reserves of rationally dssulbure the energy system across regions primary energy (coal, petroleum, hydropower and and areas 10 balance exploration, exploitation and uranium). Toexpandcooperation withothercountries processing stages; and to synchronously develop in the region andworldinconducting overseas stuVey, service aJ"'Id recycling systems. exploration and exploitation of cow, petroleum and efToapply achievements of theknowledge-based other forms of energy so as to makeup for deficient economy in order to raise energy tradingefficiency. amounts in the country. To attach importance to investment in energy - To develop electricity sources and grids, to meet conservatit::h SO as to reduce the wastage. electricity demands for socio-economic development, fl To develop energy in close association with by 2010, the supply reliability of electricity sources peeservieg the ecological environment, ensuring will reeco qg .7%: and electricity gdds wilt reach n-1 sustainable energydevelopment. standard. 2.Development objectives - To develop oil refioeries, step by step satisfy domestic demands for oil products. and increase the at OVerall objecnves: total capacity of oil refineries to 25-30 million tons In order to contribute to successfully fulfilling the ofcrude oilby2020. tasksset in theParty's socio-economic development - To raise. the level of national strategic petroland strategy, the overallobjectives of menational energy development strategy up to 2020, with 2050vision, oil reserves to the equivalent of 45 days of average are to assurenational energy security, contributing to consumption by2010, 60days by2020 and 90 days firmly maintaining security and defense and bv 2025. developing an independent and self-reliant economy; - To strive to increase the proportion of new and to supply adequate high-quality energy for socio- renewableenergiesto about 3% of the total amount economic development: to exploit and use domestic of commercial primary energy by 2010; about 5% © VIETNAM LAW & LEGAL FORUM Issue nos 08.09lDecember 2007 OFFICIAL GAZETTE ,. (C6ng BaD nos 07-oB/January 5,2008) by 2020 and 11% hy 2050. sources using new and renewableenergy. - To complete the program on rural and -Todevelop theelectricity industry in the direction mountainous energy. To increase the rate of rural of diversifying ownership forms. The Vietnam households using r-ornrnen-ial f'nf'rgy for cooking to Electricity Group (EVN) shell U3SumC the prime 50% by 2010 and 80% by 2020. By 2010, 95% of responsibility for developing electricity sources and rural householdswillbe suppliedwithelectricityand national transmission systems.To publicize a list of by 2020,almostallruralhouseholds will besupplied investment projects on electricity generation aDd with electricity. distribution callingfordomestic andforeign economic -To formulate long-term environmental objectives sectors to invest in. and standardsin conformity withregionaland world - To diversify forms of investrreaot in the environmentalstandardsand the country'seconomic development of electricity sources and di.i1ribution conditions. To control and mitigate environmental networks. pollution in energy-related activities; by 2015, all - To continue apply-ing on a trial ~ig l:mrl energy facilities will reach environmental standards. expanding the equitization of power piants and -Toslrongly switch theoperation oftheelectricity, distribution units. coal and petroleum industries after the competitive - To separate puhlic-utility activjties frorn market mechanismregulatedby the State. To form a production and business activities. To wbsidize competitiveelectricityretail marketin the post-2022 electricity activities in remoteanddeep-lying areas. period; to form coal and petroleum tradingmarkets - To expand intematinnal cooperation and in the period from now to 2015. integration. - To actively prepare necessary and synchronous - To step by step form and develop an electricity conditions for the connnission of the first nuclear market in Vietnam power generator by 2020, then quickty raise the proportion of nuclear power in the national energy - To research into the development Of nuclear structure. By 2050, nuclear power will account for power plants. about 15-20% of the total national commercial energy - 'Ibensure sustainable development andrninimize consumption volume. adverseimpacts on the environment. - To intensify international cooperation in the b/ Orientations on developmentof cool industry: energy domain. To strive to connect to the regional - '10 accelerate the survey and assessrrera of coal electricity gtids (of a voltage of up to 500 kV) in reserves at the depth of 300 meters or more 201Q.-2015,and to connect totheregional natural gas underground and conductdeep surveys ill the depth system in 2015-2020. of between 400 and 1,000 mcteae Ullllel~UWlIl ill 3. Development orientations: Quang Ninhcoalfields. aI Orientations for development of the electricity - Toencouragelocalitieswhereexist coalfieldsto industry: make investment in the exploitation end exploitation of coal to meet local demands. - To ensure adequate supply of electricity for national socio--economic development To prioritize - To mobilize funding sources to survey and the rationalconstruction of hydropowerplants while evaluate coal reserves in the RcdRiverdclta and study developingcoal- and natural gas-firedthennalpower the exploitability, plants. To encourage the developmentof electricity - To develop coal industry in a stable and © VIETNAM LAW & LEGAL FORUM OFFICIAL GAZETTE InUA nt\!t OlUlQtrlt>MmhAr .,007 (Gang Baa nos 07-08/January 5, 2008) sustainable manner, meeting coal demands of the - To adopt policies to encourage foreign investors national economy; toensure a stable coal market for to apply high technologies in exploiting oil and gas domestic consumption and rational volumes for fields with limited reserves. export. - Policies on petroleum processing: -Thdevelop coalindustry inclose association with + To encourage foreign investors to participate in socio-economic development, tourism, defense, joint ventures contributing capital to building oil security and protection of biological environment. refineries and petrochemical plants and allow them - To encourage economic sectors toinvest incoal to participate inthe product distribution market with exploitation, sorting and distribution. To work out a a certain market share. roadmap for equitization of coal companies. striving + To attract petroleum product-trading companies 10 form a coal market. to enter into joint ventures developingoil refineries d OrierlIations for the developmentof petroleum so as to link production with consumption and industry regulate profits between production and business - To dearly distinguish the state management activities. function from the production and business - The State encourages and protects overseas managementfunctionof management andproduction petroleum survey, exploration and exploitation and business agencies of petroleum industry. To activities carried out by Vietnamese enterprises. concentratethe state managementof petroleumon a dI Orientations for the development of new and single agency. renewableenergies: - To formulate legal grounds for petroleum - Regarding survey and planning: New and activities. paying special attention to midstream and renewable energies have not yet been adequately downstreamactivities, including important tasks of evaluated, therefore, itis necessary to elaborateplans economicand technical management in the natural on, and make proper investment in, conducting gas sector such aslicensing ofgas transportation and snrveys inordertoobtain additional data forplanning distribution. approval of gas prices, transport and and zoning areas with these energies and preparing distribution charges and issuance ot techmcal investment and exploitation plans. ".0 establish regulatiom. specializedorganizations of various economic sectors - To encourage and speed up petroleum survey toconductsurveys andelaborate plannings andplans. and explorairon activities; to builda transparent and To carry out communication, research, trial effective system for supervising and assigning production and expansion of new and renewable contracts on exploration lots; to periodically revise energies nationwide. fuoolcial tenus 50 as ttl n"ldke petroleum cxplorotion - To CUIT)' out communication on the use of new and development investment activities in Vietnam and renewable energysourcesin deep-lying, remote competitive with thosein other countries. and mountainous areas and islands. To formulate a - Tu prioritize the. development, exploitation and managerial mechanism for maintaining and use of natural gas. To encourage and provide developing electricity sources in these areas. incentives for investors whoinvestintheexploration - To integrate the use of new and renewable and expl('lit~ticm of 2~-<: fip.kk, especially those with energies into the energy conservation program and limitedreserves. Todiversify the fOnTIS of investment othernational target programs such as those on rural andcooperation intheconstruction of gas-fired power electrification, aforestation, hunger eradication and plants for sale of electricity to the national grids. povertyalleviation, cleanwater, integrated fishpond- © VIETNAM LAW & LEGAL FORUM .Issue nos DIHI9lDecember 2QQ7 OFFICIAL GAZETTE 41 (C6ng Bao nos Ol·08IJanuaty 5. 2008) livestock pen-home garden model, etc The policy on energy prices is considered a -Toencourage enterprises to buildinplaceswhere breakthrough policy aiming to quickly abolish conditions permit appropriate establishments for monopoly andsubsidization inenergyproduction and manufacturing, assembling and repairing equipment consumption. Energy prices should be determined and facilities fuelled by new energy such as water underthe marketmechanism. The Stateshallregulate boilers, small-sized hydropower equipment, wind- energy prices through tax policies and other operatedengines andbiogas digesters. To cooperate management tools. with, and purchase technologies from, developed d Policy on investment inthedeveloprnentofnew countries in orderto assembly hi-tech equipment such andrenewable energysources, bio-energy and nuclear as solar cells, wind-operated equipment, etc, then power strive to assemble and manufacture these equipment To prioritize the development of IlSW energy, at home. renewable energy, bio-energy and nuclear power. To - To supportinvestment in programs on survey encourage overseas investment to seek tbr energy and research into new and renewableenergies, trial sources; to adopt policies to ensure equality among production of new and renewable energy products economic sectors participating In energy and development of models of use of new and development renewable energies; to offer tax incentives fur the dI Policy onecooomical andefficient useofenergy import of equipment and new technologies and the The policy on encouraging the economical and manufacture anddistribution ofequipment; toprotect copyright of authors of valuable inventions and efficient use of energy must identify specific technical renovations. conservation requirements onsectors which consume a large volumeof energy; toencourage the .application - To allow domesric and foreign individuals and of energy-saving equipment and technologies. economic organizations to coordinate with one anotherin makinginvestment in the exploitation of eI Policyon environmental protection new and renewable energy sources on the basis of The policy on environmental protection aims to mutual benefits. ensurethe harmonybetweenenergy ex:pto.ltation and use with environmental management; to apply 4. Policies advancedenvironmental standards in an oppropriate alPolicy on assurance of national energysecurity: manner. Toprioritize the implementation of the policy on 5. Implementation solutions assurance of national energy security towards synchronous development of various energysources; af Solutions on development investment to exploit and use domestic energy sources in an - To perfect the organization andmanagememOf economical manner; to reduce dependence on theVietnamElectricity Group,theVietnamCoal and imported petroleum products; to export a rational Mineral Group and the Vietnam Petroleum Group quantity of coal (in the immediate future, to reduce after the model of mdustrial-commcrcial-financial annual coalexports); to connectto theregional energy groupconducting multiple business linesat home and systems; to expand petrol and oil reserves; and to abroad andplaysthekeyrole in energydevelopment combine energy security with assurance of defense investment. and national security. - To consider and expand the exploration and bIPolicyon energy prices exploitation of primary energyin offshore sea areas © VIETNAM LAW & lEGAL FORUM 42 OFFICIAL GAZETIE Issue nos 08-09IDecember. 20,01 (C6ng BaD nos 07-{)IJ/Janua/j' 5, 2008) andtheoverlapping areasbetween Vietnam andsome technologies.then strivingto create new technologies regional countries. in the energy domain. - To furtherboostinternational cooperation in the - To accelerate the application of energy-saving energy domain: to prioritize cooperation with solutions; to enhance coordination between neighboring countries (Laos, Cambodia andChina); authorities, the Fatherland Front and mass to efficiently use energy sources exploited from associations in encouraging people to use energy in foreign countries. an economical and efficient manner while ensuring - To publicize a list of investment projects; to environmentalprotection. encourages domestic and foreign economic sectors dI Solution on organizationalmechanisms to invest in the energy domain. - To re-structure the energy sector so as to step by hi Solutions on financial mechanisms step form a competitive energy market on the basis - Th increase investment fromthestate bndget for of assuring socio-political stability. energy prejects in rural and mountainous areas and - Topromulgate new legal documents at thesame islands so as to contribute to economic development timewithrevisingandimprovingcwrent onesin order and hu~ eradication and poverty alleviation in toswitch the operation ofenergy enterprises afterthe these arces: to study the establishment of an energy market mechanism; to abolish enterprise monopoly. development fund to provide support for investment in the deveeopment of new and renewable energies

Article 2.- Tasks of ministries. branches and concerned units and the implementationof public-utilityprojects. -Toprkeitize theallocation ofconcessional credits 1. TheMinistry of Industry andTrade: fromthedevelopment support fund, aDA capital and -Totake responsibility formanaging and directing otherforeign bilateral loans forenergyprojectssuch the implementation of this Strategy as those M the exploration anddevelopment of new - To direct the elaboration of plannings on and renewable energies and bio-energy, development of the energy sectors and sub-sectors d Solutions on human resource development of electricity, coal and petroleum in each socio- - To concentrate efforts on training and raising economic development period. professional qualifications of managers, technicians - To direct the assessment and updatingof energy and skilled workers; to focus on training human demands so as to work ont an appropriate program resources for sectors in which human resources on developmentof energy facilities, meetingnational remain il'lSUfficient in quantity or poor in ,quality, energy demands. In case of big changes in energy especially the sub-sectors of new and renewable demand and supply, it is necessary to calculate and energy, bio-energy, oil refinery, petrochemistry and pro~~~~moon~IDilimpro~am nuclear power. -Tostudy andpropose according to its coropetence - To accelerate scientific research into and mechanisms and policies for the implementation of application of new technologies, especially III the thisstrategy as prescribed by the Government. domain ofpetroleumandcoal survey andexploration; 2. The Ministry of Natural Resources and to re-organize scientific and technological research and training establisluueuts into specialized ones; to Environment: develop scientific-technological potential together To direct the coordination among concerned with the application and renovation of foreign ministries andbranchesin conductingsurveyinto and © VIETNAM LAW & LEGAL FORUM Issue nos Oa·09fDecember 2007 OFFICIAL GAZETIE 43 (Gong Bso nos 07-DB/January 5,2008) exploration of reserves of energyresources. their functions and tasks, properly irnplement this 3. The Ministry of Finance, the Ministry of Strategy in accordance with regulations. Planning and Investmcnt and the State Balik uf

Article 3.-This Decision takeseffect15daysafter Vietnam: its publication in "CONG BAG." To coordinate with one another in studying, perfecting and promulgating mechanisms on Article 4.- Ministers, heads of ministerial-level mobilization andefficient useofcapital forinvestment agencies, heads of government-attached agencies, in energy development. presidents of provincial/municipal People's Commilt~f'sand cnn('i';rned units and individuals shall 4. The Ministryof Science and Technology: implement this Decision. To coordinatewith the Ministry of Industry and Trade in directing the implementation of programs Prime Minister on promoting scientific and technological activities NGUYEN TAN DUNG- in the energydomainin the direction of encouraging the acquisition and application of advanced and energy-saving technologies III the world. 5. The Ministry of Education and Training: To assume the prime responsibifity for, and coordinate with the Ministry of Industry and Trade and the Ministry of Labor, War Invalids and Social Affairs in. directing the elaboration of programs on. andorganizing, the training of technicians, managers andskilled workers,especially in the domain ofpower energy, so to meet the requirements on human resourcesfor the energysector's development. 6. Ministries, branches, localities, and concerned enterprises, organizations andindividuals shall. within © VIETNAM LAW & LEGAL FORUM •