The Year to Come and Year in Review summarise a selection of major developments you should be aware of from 2021, and a selection of key developments expected in 2022.
Vietnam introduced a number of new laws and implemented regulations on a wide range of topics during 2021. At the same time, a number of key pieces of legislation are set to be debated and introduced next year.
Explore our overview of key developments below.
Updates in
11
key areas in 2021 and 2022
We expect 2021 will be considered a significant inflection point in Vietnam's energy journey, marked by the end of fixed tariffs for wind and solar power projects and development of a new 10-year energy roadmap that signals a clear pivot towards LNG. We predict both complexity and opportunity in the year ahead as the government implements its new market-driven renewable energy tariff system and large power consumers increasingly demand direct access to green energy.
Giles Cooper, Partner, Allens
New power development masterplan: The Vietnamese Government is in the final stages of approving the draft Power Development Masterplan 8 (PDP8) for the period 2020 to 2030, with a view to its implementation in 2045. PDP8 will replace the current Power Development Masterplan 7 (PDP7) last updated pursuant to Decision 428/QD-TTG of the Prime Minister dated 18 March 2016.
Renewable energy regulation developments: The Vietnamese Government ended the fixed feed-in tariff (FiT) regime applied to solar and wind power projects on 1 January 2021 and 1 November 2021 respectively, after months of debate and despite calls from developers to extend the FiT regime for wind power due to delays as a result of the COVID-19 pandemic. Meanwhile, the Ministry of Industry and Trade (MOIT) is working on various draft regulations on renewable energy development, including the mechanism for selecting investors, the price framework and the new standard power purchase agreement (PPA) that will be applicable to solar and wind power projects.
Amended Law on Petroleum: In September 2021, the MOIT issued a draft amended Law on Petroleum aiming to address several issues which are not adequately regulated under the current Law on Petroleum dated 6 July 1993 (as amended in 2000 and 2008). While a substantial part of the new draft is taken from existing implementing regulations, there are a number of key changes.
Proposed amendments to the Law on Electricity: The current Law on Electricity has been in effect for more than 15 years (with limited changes made in 2012 and 2018). The MOIT is proposing a number of important changes to the Law on Electricity for it to be up to date with the recent changes in the Vietnamese power market and other relevant laws and regulations. The draft outline of the law circulated by the MOIT in October 2021 is still in its early stages and touches upon several key policy changes.
New law on environmental protection: Law No. 72/2020/QH14 on environmental protection was passed in 2020 and will take effect from 1 January 2022, except for the section on preliminary environmental impact assessments (PEIA) which took effect on 1 February 2021. The new law introduces several key changes.
Draft amended insurance business law: Recently, the Vietnamese Government submitted a draft amended Law on Insurance Business (the Draft), which was prepared by the Ministry of Finance (MOF), to the National Assembly of Vietnam. The Draft will replace the 2000 Law on Insurance Business as amended from time to time and is expected to be passed by the National Assembly in May 2022 and take effect on 1 July 2023.
New e-commerce regulations: In 2021, the Vietnamese Government issued a new Decree 85/2021/ND-CP amending the current regulations on e-commerce, effective from 1 January 2022, to impose stricter control over the operation of e-commerce companies and foreign investment in the e-commerce sector in Vietnam.
New Decree implementing Law on Public-Private Partnership: In 2021, the Vietnamese Government issued Decree 35 providing guidance in relation to general matters set out in the Law on Public-Private Partnership (PPP Law) and Decree 28 guiding financial matters in the PPP Law, both of which took effect in late March 2021.
Feed-in Tariffs (FiT) expired for wind power projects: In 2018, Vietnam's Prime Minister issued Decision 39/2018/QD-TTg (Decision 39), providing for a FiT of 8.5 US cents/kWh and 9.8 US cents/Kwh for onshore and offshore wind power projects respectively, if they achieve their commercial operation date (COD) before 1 November 2021. The FiT, if applicable, applies for 20 years from the COD of each wind power plant.
Other important regulatory changes: There has been a raft of other important regulatory changes in Vietnam in the past year. Notably, the introduction of the amended law on Construction and a new decree implementing the law on Firefighting and Fire Prevention, both of which impact key permits of a construction project.
EU-Vietnam Free Trade Agreement (EVFTA): The EVFTA became effective on 1 August 2020, resulting in Vietnam becoming the second country (after Singapore) in ASEAN to have a free trade agreement (FTA) with the European Union (EU). The EVFTA, which is a new generation FTA between Vietnam and 27 EU member states, along with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), is among the highest level of commitments and broadest scope of FTAs entered into by Vietnam. In the first 12 months following its implementation, the rate of export turnover using preferential tariffs under the EVFTA was higher than any other previous FTAs for the same period. This rate is two times higher than the rate seen through the ASEAN Trade in Goods Agreement, seven times higher than the ASEAN-India Free Trade Area and two times higher than the CPTPP in the first year.
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Explore our Year to Come 2022 and Year in Review 2021 series across 20+ jurisdictions and a number of legal topics.