In 2023, compliance inspections by Vietnam’s Government Inspectorate identified several violations of policies and laws in the management and implementation of planning and investment in renewable energy projects. Since then, many renewable energy enterprises and projects have encountered significant operational challenges. In December 2024, the Ministry of Industry and Trade (MOIT) issued two reports, Report 321/BC-BCT and Report 345/BC-BCT, to implement the 2023 Inspection Conclusion of the Government Inspectorate and address obstacles faced by renewable energy enterprises, Investors in renewable energy projects in Vietnam should carefully consider the potential impacts of proposed solutions in these reports. The reports re-emphasize the types of violations related to renewable energy projects identified in the Inspection Conclusion, with a significant expansion in the number of affected projects. Key violations include: (i) misapplication of FIT (feed-in tariff) incentives; (ii) recognition of COD (commercial operation date) and receipt of FIT prices without written approval of construction acceptance; (iii) overlap with mineral planning, irrigation planning, national defense land use, or other restricted land uses; (iv) incomplete land procedures and documentation; and (v) installation of rooftop solar on agricultural and forestry land used for farming and aquaculture models. Further, these reports mention the government’s solutions to resolve difficulties for renewable energy projects, which include: Allowing additional planning where projects do not violate national security. Allowing rectification of projects’ violations in land and construction process as per law. For projects violating planning on minerals, irrigation, or defense, socio-economic efficiency will be assessed for adjustments or integration. Adjusting electricity prices and recovering incorrect FIT prices for projects not meeting conditions. Requiring rooftop solar projects on non-farming land to comply with regulations or, if land violations occur, FIT prices will be revoked, and electricity prices must be redetermined and recovered. For items (iv) and (v), the authority will issue regulations

Thailand’s Department of Industrial Works (DIW) has issued a new regulation (Ministerial Regulation Re: Designation of Type, Kind, and Size of Factories (No. 3) B.E. 2567 (2024)), which removes the factory license requirement for electricity generation from solar energy installations on rooftops, roof decks, or any part of a building used for residential or other purposes, regardless of capacity. The new rules took effect on December 28, 2024. Under the previous regulations, solar rooftop installations had to seek approval from the DIW if their capacity exceeded 1,000 kW (1 MW), which added time and administrative costs when adopting renewable energy solutions. Benefits and Further Compliance The updated regulation benefits industrial operators by facilitating faster installation times and lower costs, as solar rooftops can now be installed without the need for prior approval of a factory license from the DIW. Operators can now more easily contribute to environmental sustainability and carbon reduction efforts. Despite the lifting of the factory licensing requirement, other compliance obligations, such as an energy business license (or exemption from an energy business license), a controlled energy production license, and a construction permit, may still apply. Reason for the Change Removing the classification of rooftop or building-installed solar power plants as factories aligns with Thailand’s renewable energy goals and reduces regulatory burdens for industrial operators. Additionally, it supports the achievement of energy policies aligned with the UN’s Sustainable Development Goals and Thailand’s international commitments to reduce greenhouse gas emissions through the participation of all sectors. For further details on how this change affects business operations or to explore strategies for renewable energy implementation, please contact Supasit Boonsanong at [email protected], Charuwan Charoonchitsathian at [email protected], or Phareeya Yongpanich at [email protected].

With the growing prominence of ESG (Environmental, Social, and Governance) factors, businesses in Vietnam are increasingly recognizing their importance in driving global demand, societal impact, and economic value. A comprehensive acknowledgment of ESG-related legal requirements is critical for investors and companies operating in Vietnam to meet stakeholder expectations and ensure compliance. Our guide provides a basic overview of the rapidly evolving ESG landscape in Vietnam, covering a range of key issues for companies doing business in the country: What is ESG, and what does the ESG legal framework look like in Vietnam? Who needs to follow ESG regulations in Vietnam? What are the benefits of ESG compliance? How can enterprises enhance ESG best practices in Vietnam? Please click on the link below to view the full article.