Crucial Regulations Promoting THE Development OF Green Hydrogen – Experience FROM THE Netherlands, THE United Kingdon AND Lesson FOR Vietnam | Trường Đại học Mỹ thuật Thành phố Hồ Chí Minh

lOMoAR cPSD| 49981208
EXPERIENCE OF THE NETHERLANDS AND THE UNITED KINGDOM IN
PROMOTING GREEN HYDROGEN – LESSONS FOR VIETNAM
Abstract: In this article, the authors address the problems of developing green hydrogen and how
to promote the usage of this type of energy. The authors will focus on the promoting for green
hydrogen in the Netherlands and the UK, categorized by three issues: (i) Implementing obligations;
(ii) Financial support; (iii) Technical support. From the analyzation of the issues above, the authors
propose two main ideas for Vietnam: (i) Promoting through the carbon market; (ii) Increase the
efficiency of green hydrogen facilities.
Keywords: Green hydrogen, Net-zero, Energy Transition 1. Introduction
Since the 19th century, hydrogen has been used as a form of fuel for transportation, power,
heat and industry. This type of energy showed similarities when compared with traditional fossil
fuels, except for its zero carbon emissions at use. As for its zero emission, hydrogen has been
considered as an important factor for a sustainable economics. However, there are many types of
hydrogen, such as “Fossil-based hydrogen” – grey hydrogen and “Renewable-based hydrogen” –
green hydrogen and not every type of hydrogen can be considered as a contributor to environmental
neutrality. For example, the amount of Carbon Dioxide emitted per year through the production of
grey hydrogen is around 830Mt CO21. Moreover, as there are many types of hydrogen, the authors
will focus mainly on green hydrogen and how to promote the usage and production of this type of fuel.
The role of green hydrogen with the net zero target is undeniable. The demand for hydrogen
in 2020 is approximately 87 million metric tons but the type of hydrogen was mostly produced is
grey hydrogen. Replacing them with green hydrogen can help reduce more than 800 metric tons of
Carbon Dioxide. More than that, green hydrogen plays a crucial role in reducing emission from the
production of Ammonia, Methanol and Steel2. This type of fuel is also considered as a factor to
make the hydrogen economy possible in the future. “Hydrogen economy” is a term used to describe
a reality where hydrogen became the main fuel for plants, households3.
Still, there are many hindrances for the widely usage of green hydrogen’s usage. First and
foremost, there are still lack of technologies for green hydrogen. This leads to an inevitable
consequence, the cost for producing green hydrogen is fairly high. When compared to grey
hydrogen, the cost to produce 1 kg of green hydrogen is roughly 3 times higher. As a result, the
cost of goods produced from green hydrogen will also increase. The barriers to the consumption
1 A. Ajanovic, M. Sayer, R. Hass, ‘The economic and the environmental benignity of different colors of hydrogen’
(2022) 47(57) International Journal of Hydrogen Energy 24136, 24139 - 24140.
2 International Renewable Energy Agency, ‘Green hydrogen for Industry: A guide to policy making’ (2022), 16 – 18.
3 Anh Tuan Hoang et al, ‘Green hydrogen economy: Prospects and policies in Vietnam’ (2023) 48(80) International
Journal of Hydrogen Energy 31050, 31050 - 31051. lOMoAR cPSD| 49981208
and development of green hydrogen also lie in its low demand. Though the ideas of developing
green material and advancing into the low carbon process of good production are being concerned
after the COP26, there is still little to no demand in green hydrogen. Most business focusing on
how to reduce their cost and leave the issue of environmental protection aside4. In 2020, 95% of
the total hydrogen is still produced by fossil-fuel5. Most importantly, we cannot deny one thing that
policies aiming for net zero are still not effective enough for the increased usage of green hydrogen.
Yet there has not been sufficient technology for reducing the cost of producing green hydrogen but
with the clear, stable and long-term frameworks, the potential of green hydrogen can be realized
more easily. Vietnam is a country that is considered to have huge potentials in developing green
hydrogen. However, Vietnam’s strategy and regulations for the development of green hydrogen
were still not establish, and this will make us miss some of the big opportunities with this energy.
Developing a policy for green hydrogen is a critical problem that we should deal with to achieve our target of net-zero.
From the authors’ perspective, the policies for motivating green hydrogen may focus on three
categories: Financial; Technology and Imposing Obligations. Seemingly, the Netherlands and the
United Kingdom (UK) have ambitious green hydrogen target of reaching 8 Gigawatt (GW) and 5
GW of low carbon hydrogen production capacity. Moreover, the two countries share many
geographical characteristics with Vietnam, they both have long shores, which is a good condition
for establishing offshore wind energy projects (electricity provider for green hydrogen projects).
The two countries have also established a green hydrogen strategy for a long-term development of
green hydrogen. Additionally, they have been building some large scales green hydrogen projects
such as the GROHW, the Hydrohub GW projects in the Netherlands and the H100 Fife project in
the UK. In this study, we will go deeper into the regulations of the Netherlands and the UK in
developing green hydrogen. From that, we will propose some of the main ideas for Vietnam.
2. Regulations regarding the developments of green hydrogen.
2.1. Implementing obligations
The green hydrogen was still not got its attention, so it is important to increase the demanding
of green hydrogen by imposing regulations that reduce fossil fuels and motivate the usage of green
energy. These regulations can be direct or indirect. For example, the direct regulation can be a ban
on the usage of fossil fuels. The indirect regulation can be the regulations that make company to emit less emission.
In the UK and the Netherlands, both countries have established their emission trading
scheme (ETS) as a way to reduce emission and this is believed to be an effective way for increasing
4 International Renewable Energy Agency (n 2) 23 – 25.
5 Michael Kobina Kane & Stephanie Gil, World Bank, ‘Green Hydrogen: A key investment for the energy transition’
(2022) (Web Page, 25 October 2023) energytransition> lOMoAR cPSD| 49981208
the usage of green hydrogen. By applying an ETS, companies will be put under a capand-trade
system, which will issue them a specific number of allowances. This allowance represents the
amount of emission. At the end of each year, companies will have to surrender the number of
allowances as the same as the number of emissions that they emitted the previous year. One thing
that differentiates the ETS with other emission reducing policies is that allowances can be traded
between companies. The companies with high emission will buy allowances from the companies
with low emission. Moreover, ETS also allows other companies to invest in the green mechanism
such as the Joint Development and Clean Development Mechanism by building and facilitating
emissions cutting installations and be rewarded with carbon credits. Carbon credit can also be used
to trade on the ETS. This can help companies investing more on green hydrogen producing projects,
which are considered can reduce emission to make carbon credits6. Aside from that, managing an
effective ETS can lead to the less usage of fossil fuel and increasing usage of green energy, including green hydrogen.
For the case of the Netherlands, this state’s ETS is included in the Europe ETS (EU ETS).
In UK, after the Brexit event, this country has established operated a domestic ETS since 20217. To
decide whether an ETS is operated effectively or not depends on two main factors: The price of the
allowance and the number of emissions reduced. There are many factors that affect the allowance
price, but mostly is the number of allowances being circulated on the market. For better maintaining
the price of allowance, EU ETS and UK ETS have applied some solutions. First of all, both ETSs
use auctioning as the principal way to allocating allowance to companies. This can reduce the
abundancy of allowances, which is the reason for the sharp falling of allowance’s price in EU ETS
in its phase 1 (2005 – 2007) and phase 2 (2008 – 2012)8. Secondly, they used a mechanism for
securing the allowance price as a suitable amount. In EU ETS, this task is left for the Market
Stability Mechanism, which can increase or decrease the number of allowances circulated on the
market to adjust the appropriate allowance price9. In UK ETS, this is the job of the UK ETS
Authority, there are many solutions such as the Auction Reserve Price and the Floor price 9 .
Whichever they apply, those still showed to be an effective way for securing allowance price. In
the Covid pandemic when the economic situation came to a standstill, the price of the allowance
6 Amos T. Kabo-bah, Caleb Mensah, ‘Hydropower and the Era of Climate Change and Carbon Financing: The Case
From Sub-Saharan Africa’ in Amos Kabo – Bah, Chukwuemeka J, Diji, Sustainable Hydropower in West Africa, (Elsevier 2018) 43 – 44.
7 United Kingdom Government, ‘UK Emissions Trading Scheme markets’, (Web Page, 25 October 2023) schememarkets>
8 Takashi Kanamura, ‘Chapter 7 – Carbon market analysis and risk management’ in Hamdi Abdi et al, Handbook of
Energy Economics and Policy, ed Alessandro Rubino, Alessandro Sapio and Massimo La Scala (Elsevier, 2021) 278.
9 Decision 2015/1818 concerning the establishment and operation of a market stability reserve for the Union
greenhouse gas emission trading scheme (European Parliament) art 1 (6) – (7).
9 United Kingdom Government (n 7). lOMoAR cPSD| 49981208
on the EU ETS still remained around 18 – 20 EUR instead of falling to nearly 0 in 2008. Though
there are still some opinions on the effectiveness of the Market Stability Reserve, its role in the
covid pandemic is undeniable10. Through the strictly operated ETS, there has been some positive
affects on the energy transition process in the Netherland and UK. Even though the rate of fossil
fuel energy used is still fairly high, the usage and demanding for renewable energy has increased
gradually in the recent years. In the Netherlands, the production of renewable energy increased
from 14.68 (Terrawatt - hour) TWh in 2016 to 48.33 TWh in 2022. In the UK, this number increased
from 77.63 TWh in 2016 to 116.68 TWh in 202211. The increasing in production and usage of
renewable energy does mean that the demanding for green hydrogen has also increased for better
compliance with the ETS and avoiding being fined. In the long-term, when the ETS impose higher
reduction target, companies will have to research and invest more in better ways for coping with
their emission reduction regulation, which lead to a brighter future for green hydrogen.
Beside the ETS, there are some other regulations that oblige directly on the usage of fossil
fuels. In 2019, the Act of 11 December 2019, containing Rules for the production of electricity
using coal (Act banning coal in electricity production) has been ratified in the Netherlands.
According to this Act, from 31 December 2024 onward, facilities that produce energy from coal
with an electrical efficiency less than 44% will be banned. From 2030 onward, there shall be no
electricity produced by coal13. Banning of coal may affect negatively on facilities, so the operator
may request the authority to compensate for the result of the Act. As can be seen, the Act banning
coal in electricity production does not wholly ban the usage of coal, but do it gradually until 2030.
In the UK, the banning of coal seems different, their target is to no longer use coal to generate
electricity from 1 October 2024. However, the UK has not established any specific regulations regarding this issue12.
The banning of coal or any other fossil fuels may seem to be a good way to quickly increase
the demanding of green hydrogen. However, states must consider really carefully before legislate
any regulations regarding the banning of fossil fuels since this can violate some of the rights of the
investors. After the establishment of the Act banning coal in electricity production, the Netherlands
was sued by RWE and Uniper, two germany companies in energy sector. Those companies own
three major coal-fired power plants in the Netherlands and they stated that the Act of the
Netherlands infringed their property rights because the Act was introduced without offering any
10 Reyer Gerlagh, Roweno J.R.K. Heijmans and Knut Einar Rosendahl, ‘Covid-19 Tests the Market Stability Reserve’
(2020) 76 Environmental and Resource Economics 855, 863.
11 ‘Data on the consumption of renewable energy in The Netherlands and the UK’, (Web Page, 25 October 2023) 13 Act banning coal in
electricity production art 2 - 3.
12 ‘End to coal power brought forward to October 2024’, (Web Page, 25 October 2023)
%201%20October%202024%20Great,(Wednesday%2030%20June%202021> lOMoAR cPSD| 49981208
financial compensation scheme. Moreover, they showed that the Act was a form of expropriation
and violated their right according to Article 1 of Protocol 1 of the European Convention on Human
Rights and the right to property in Article 17 of the EU Charter of Fundamental Rights. As for their
statement, they required the state to compensate 2.4 billion EUR for them. Luckily, the Netherlands
government was on the winner side of this case as the court stated that there was no expropriation
in this case and the Netherlands did not have to compensate13.
As there may be some ways to increase the usage and demanding of green hydrogen, they all
posed both pros and cons. It is important for states to use them with high consideration for the most
effectiveness. Both the Netherlands and the UK have some stand out experiences in applying
regulations that drive the energy usage trends. These are worthy experiences for Vietnam to study and apply. 2.2. Financial support
One of the things that strongly hinders investors and companies from using and producing
green hydrogen is its cost. The expense for developing facilities producing green hydrogen can be
very costly when compared with grey hydrogen. Take the example of making green hydrogen with
solar thermal and wind electrolysis, the cost of investing can climb up to around 300 to 500 million
dollars while investing in production of grey hydrogen with the traditional ways only cost around
200 million dollars14. With the high investment capital, the price of green hydrogen is indeed higher
than grey hydrogen, this falls around 4-6 USD/kg for green hydrogen and 1-2 USD/kg for grey
hydrogen15. As for this reason, companies still prioritise grey hydrogen to green hydrogen. More to
know, solar energy and wind energy play an important role for producing green hydrogen. The
electricity from solar panels and wind farms can help produce quite an amount of green hydrogen.
Thus, it is important to apply regulation that financially support renewable energy in a whole and not only green hydrogen.
To address the issue of financial support for renewable energy, both countries have applied a
feed-in premium scheme. With the feed-in premium mechanism, investors for renewable energy
projects can enjoy preferential price. Specifically, the investors of renewable energy projects will
always earn an amount of money that is higher than the average price on the electricity market.
Doing this can let investors earn more profit to compensate for the capital they spent on the projects.
In the UK, the feed-in premium is used as another variant which is called the Contract for
Difference (CFD). This supporting scheme is much the same as the feed-in premium. The generator
and Companies or so called CFD counter party will agree on a fixed price or “strike price”. When
13 RWE and Uniper v. the Netherlands [2022] No. C-09-608588-HA ZA 21-245, 30 November 2022, (the Hague Court), 40.
14 Muhammet Kayfeci, Ali Kecebas and Mutlucan Bayat, ‘Chapter 3 – Hydrogen production’ in Camilo A. Arancibia-
Bulnes et al Solar Hydrogen Production ed Francesco Calise et al (Academic Press, 2019) 81.
15 International Renewable Energy Agency (n. 2) 24. lOMoAR cPSD| 49981208
the “strike price” is higher than the market price, the CFD counterparty must pay the difference
between the “strike price” and the market price. What make CFD different with the normal feed-in
premium is that in case the “strike price” is lower than the market price, investors will be the ones to pay the difference.
Though these sound to be good ways to promote renewable energy projects, feed-in premium
and CFD still bear some risks for green hydrogen producers. As for the case of feed-in premium,
the equilibrium may not be maintained. Generator will be the mainly benefited party while
companies that buy green electricity shall suffer a higher electricity price since the feed-in premium
gives the result of the electricity higher than the market price. The same case with CFD, when the
strike price is too low compared to market price, the difference paid by the CFD counterparty could
be too high16. This could possibly increase the price for green hydrogen. For this reason, it is very
important to consider the benefit of every affected party when building the amount of feed-in premium or the strike price.
The condition to be qualified for feed-in premium is different in the two countries. In the
Netherlands, the renewable projects can be qualified for feed-in premium only after they have
submitted an application to the Dutch energy agency and got accepted17. The qualification criteria
is that the investors must prove that their projects produce electricity from renewable energy so this
means that feed-in premium can be applied to projects right after they have won tender. In the UK,
generator must apply for an allocation round of CFD to secure this contract20. Despite of the
difference, both countries chose to not widely apply feed-in premium, CFD. Because some
renewable projects, especially small and medium scale projects, the support deemed to be
unnecessary. They do not need to earn too many profits to really rebalance their expense.
Aside from that, direct financial support for building green hydrogen projects should also be
considered. Notably, the Netherlands has linked the financial support with the ETS. As a member
of the EU ETS, the Netherlands’ companies and investors are eligible for being financially support
through a funding mechanism called the Innovation Fund. This is a fund that use the revenues from
the EU ETS to support projects that contribute to the climate change mitigation progress. Through
the long operating period, the revenue of the EU ETS has reached to the total of 158.4 billion USD.
This amount can help reduce the pressure of expense on green hydrogen production investors. Up
to now, there have been 6 projects on green hydrogen in the Netherlands that have applied for the
fund and 3 were supported. The amount of fund granted for each project was around 99 million
16 Natalie Kozlov (2014), ‘Contracts for difference: risks faced by generators under the new renewables support
scheme in the UK’, The Journal of World Energy Law & Business, Pg. 285, Retrieved from: 10.1093/jwelb/jwu016
17 Regulation designating sustainable energy production categories 2018 (the Netherlands Government) Art 2 (3)
20 The Energy Act 2013 (the United Kingdom) Art 13. lOMoAR cPSD| 49981208
USD, accounted for most of the investment expense18. Even though until 2026 did these projects
start operating, but using ETS to fund green hydrogen project is a model worth studying.
Additionally, the European Union has also founded a subsidy scheme with have funded
860.67 million USD for green hydrogen projects in the Netherlands19. In the UK, even though there
is no linking between the ETS and hydrogen projects’ support, this country still establishes a fund
called the Net Zero Hydrogen Fund (NZHF). In 2023, the UK Government has cleared
46.8 million USD for 15 low-carbon hydrogen, including green hydrogen projects20.
As analyzed above, renewable energy and green hydrogen are two unseparated features. Thus
financing renewable energy projects can also mean financing green hydrogen projects. However,
the financial support for green hydrogen must be done with consideration to avoid any
counterproductive effects. Especially when using the feed-in premium, methods like this could
raise the price of green hydrogen. The main thing when financial supporting renewable projects is
to create an abundant and cheaper source of renewable electricity and from that, reduce the price
of green hydrogen. 2.3. Technology support
Technical barriers are also one of the main things that increase green hydrogen’s price and
make this fuel less favorable. Green hydrogen production uses the electrolysis process which take
electricity from renewable energy generator. Compared with grey hydrogen production method,
the electrolysis method is less efficient since it cannot be used as a heat sink as the process for
producing grey hydrogen. Additionally, the input of renewable electricity is still scare, which in
turn making green hydrogen less affordable24. These are also the reasons for the high price of green
hydrogen. Coping with the technical issues requires multiple approaches including transporting,
storage, grid connection, cross-border cooperation... In the Netherlands and the UK, the both
countries own a huge potential for offshore wind energy of 221 GW and 1.800 GW consecutively21.
This abundancy in offshore wind energy creates a perfect condition for the building and operating
18 ‘Innovation Fund projects’, (Web Page, 25 October 2023) climateaction/innovation-fund/innovation-fund-projects_en>
19 ‘H2 subsidies/The Netherlands grants 800m for over 1GW of green hydrogen projects for heavy industry’, (Web
Page, 25 October 2023) forover-1gw-of-green-hydrogen-projects-for-heavy-industry/2-1-1378340>
20 ‘UK allocates grants to 15 low-carbon hydrogen projects and unveils shortlists for further funding’, (Web Page,
25 October 2023) projectsand-unveils-shortlists-for-further-funding/2-1-1428396> 24 International Renewable Energy Agency, (n. 2) 23 – 24.
21 World Bank, ‘Offshore wind technical potential in the United Kingdom’, (Web Page, 25 October 2023)
Potential_GWECOREAC.pdf>; World Bank, ‘Offshore wind technical potential in the Netherlands’, (Web Page, 25 October 2023) Potential_GWECOREAC.pdf>. lOMoAR cPSD| 49981208
green hydrogen facilities. In this section, the technical support we focus will be mainly on the
offshore wind energy aspect and how the two countries take advantage of their capacity.
The Netherlands and the UK have established some regulations that make use of their
offshore wind energy projects. Regarding the grid connection, the Netherlands and the UK both
allowed the direct connection to offshore wind farm22. This enable the green hydrogen projects to
be supplied with the larger amount of renewable electricity. However, the electricity act of the two
countries still leaves the issue of responsibility of cable construction untouched. So far, there have
been no connection between the offshore wind electricity generator and the green hydrogen projects
using electrolyser in the Netherlands and the UK, leaving no specific guidance on this issue23.
Up to now, there has been no permission for producing green hydrogen simultaneously with
other activities that can be done onshore and offshore such as resources exploiting… or using
hydrogen production as a ancillary service24. However, green hydrogen production can reuse other
existing platforms. This appeared in the British Petroleum Act 1998 of the UK, where any
hydrocarbon installations before decommissioning must be taken into consideration of whether an
alternative (including building green hydrogen facilities) is possible25. The Netherlands has also
been preparing a bill on this issue26. Since green hydrogen production facilities can be installed on
existing platforms, reusing of existing pipelines may be possible. There is no legal restriction on
this, however, the injection of hydrogen into these pipelines must adhere to the overall rules
regarding the entry criteria. There have been not many regulations that help increasing the
efficiency of green hydrogen facilities because of their distinctive features. However, these
facilities can be built on used platforms, this can help reduce the time for planning places and
quickly increase the overall capacity of green hydrogen production.
Regardless of the importance of technical support, this is still an uncharted territory. Both the
Netherlands and the UK have not proposed any specific regulations on the promoting of green
hydrogen through the technical support way. To explain this, we may have to look on the technical
side of green hydrogen production. Green hydrogen is produced by the electrolysis of water
molecules using the “clean” electricity or the so called renewable electricity. Judging from the fact
that this process is used solely for producing green hydrogen, not many ways to increase its
efficiency as the ways of producing grey hydrogen, in which the facilities can also be used as a heat
sink. More than that, coping with this needs a long-term solution, this is for the best preparation of
the infrastructure that could utilize the process for production of green hydrogen.
22 Electricity Act (the Netherlands) art 1(4); Electricity Act 1989 (the United Kingdom) art 10A.
23 Andreasson, ‘The Regulatory Framework for Green Hydrogen Developments in the North Sea’ (2021) Vol XIV
European Energy Law Report 295, 303. 24 Andreasson (n. 26) 307.
25 Petroleum Act 1998 (the United Kingdom) Art 29(2B)(a).
26 Act Amending the Mining Act of 25 February 2021 (The Netherlands). lOMoAR cPSD| 49981208 3. The case of Vietnam
3.1. The potential of green hydrogen in Vietnam
With the target of net-zero by 2050, Vietnam will need to use every possible options. And for
this reason, green hydro should be paid more attention. Accordingly, the ability to reduce emission
is really high. Estimatedly, using green hydrogen can cut 3.9 million tones of carbon dioxide in
2030 and 363.8 million tones in 205027.
Across the Southeast Asia countries, Vietnam is a promising place to develop green hydrogen
projects. Sharing the same similarities with the Netherlands and the UK, Vietnam carries huge
potentials in offshore wind energy which is 599 GW28 in total. This is a good condition for
developing green hydrogen projects. According to the assessment of United Nations Development
Program (UNDP), the amount of green hydrogen that can be produced in Vietnam up to 2030 is
around 15,04 million tones and increase to 18.78 tones in 205029.
The UNDP has also promoted some of the recommendations for Vietnam to utilize the
potential of green hydrogen. The main idea of those recommendations is that Vietnam should
establish a clear legal framework for green hydrogen and advancing the technology relating to green hydrogen production34.
3.2. Regulations of Vietnam in developing green hydrogen potential and some proposals
Vietnam fully awares of the high potential in green hydrogen. In 2020, the Politburo has
promulgated the Resolution no. 55-NQ/TW on orientations of strategy for national energy
development by 2030 with a vision towards 2045 (Resolution no. 55-NQ/TW). In the Resolution,
one of the main missions for energy transition has been pointed out to be researching and
developing appropriate hydrogen energy. This was further specified in the Resolution no 140/NQ-
CP of the Vietnam Government. In other policies such as the Decision no. 888/QD-TTg dated July
25, 2022 of the Prime Minister of Vietnam, Decision no. 1658/QD-TTg dated October 01, 2021 of
the Prime Minister of Vietnam, many issues concerning green hydrogen were mentioned. These
including usage of green hydrogen in transportation, ammonia production, production green
hydrogen by using the electricity from renewable sources.
27 ‘Viet Nam co nhieu tiem nang san xuat va phat trien hydroxanh’ [Vietnam has many potential in producing and
developing green hydrogen], Indutry and trade magazine, (Online, 25 October 2023)
28 World Bank, ‘Vietnam offshore wind technical potential’, (Web Page, 25 October 2023) inVietnam-Map.pdf>
29 Thuy Khanh, ‘Tiem nang phat trien ve nang luong Hydro xanh tai Vietnam’ [Vietnam’s potential in developing
green hydrogen energy], Environmental Magazine, (Online, 25 October 2023) 34 (n. 30) lOMoAR cPSD| 49981208
Remarkably, in the electricity planning VIII, a target for green hydrogen was established. In
2030, there will be 7.030 MW of electricity from hydrogen and to 2050, to total electricity for
electricity from hydrogen will reach 25.400 MW. The linking with renewable energy, especially
offshore wind energy was also mentioned. However, Vietnam barely has any specific regulations
for the development of green hydrogen. Eventhough in short term, this type of energy still not has
many significance impact on the process of energy transistion or decarbonalization, in the long
term, this energy could play an important role30 . This emphasize the need for establishing the
framework on green hydrogen in Vietnam.
To address this problem, taking experience from the Netherlands and the UK is very
important since the two countries’ conditions are similar with Vietnam. On the issue of obligations
imposing, Vietnam still has no significant regulations. Even though we do have a target of carbon
market operating by the year 2027, the Decree no. 06/20222/ND-CP dated January 07, 2022 is the
only document legislates the operation of the ETS. However, Decree no. 06/2022/ND-CP just
regulates the basic elements of an ETS. This leaves many gaps in the ETS regulations of Vietnam,
especially the price security mechanisms. To ensure the efficiency of the ETS, some regulations on
this should be established. Studying the model of the Netherlands and the UK, the two countries
apply two different schemes. And Vietnam could establish a reserve for reserving of allowance,
reducing the total allowance on the ETS and maintaining the allowance price, enough to make
companies adapt low carbon technologies, including usage of green hydrogen. As the same time,
using the floor price deems to be possible in ETS of Vietnam. However, these mechanisms should
also be used with avoidance of increasing the allowance price too high. In the EU ETS, the Market
Stability Reserve can release some allowance in the reserve to reduce the allowance price and this
should be adapted in Vietnam. On the issue of banning the using of fossil fuel, we should quickly
promulgate the regulations on banning of coal and gradually reduce the usage of this fuel the same
as the case of the Netherlands. Additionally, banning coal facilities should go with the appropriate
compensation mechanism, this could help Vietnam avoid being sued by investors, which happened
in the Netherlands when this country has just rectified the Act on banning of coal.
In the time prior to the year 2021, offshore wind projects can enjoy the feed-in tariff scheme
which let them trade electricity with fixed and higher price. However, after 2021, feed-in tariff will
no longer be available, leaving offshore wind projects and other renewable energy projects in
financial difficulties31 . This leads to a hesitation in investment and building of new renewable
projects and could hindrance the production of green hydrogen. Despite of having established a
30 Le Viet Cuong, Nguyen Van Thao, ‘Phat trien hydo trong lo trinh chuyen dich nang luong va goi y tu goc do chinh
sach khoa hoc va cong nghe’ [Developing green hydrogen in the energy transistion of Viet, some proposals to the
science and technology policies] (2023) 8, Journal on Science and Technology Vietnam 22, 24 – 25.
31 Nghi dinh so 37/2011/QD-TTg ve co che ho tro cac du an dien gio o Viet Nam [Decision no. 37/2011/QD-TTg on
the mechanism supporting the development of wind power project in Vietnam] (Vietnam Government) art 14. lOMoAR cPSD| 49981208
temporary price for some renewable energy projects, Vietnam will need a long-term solution for
the financial support of renewable. From what applied in the Netherlands and the UK, the feed-in
premium mechanism in the two countries seem to be appropriate for supporting renewable projects.
However, Vietnam is a country with a special model of state monopoly in energy to ensure the
energy security, which in turn, no existence of market price. At the moment, the government of
Vietnam has drawn out the ideas of liberating the electricity and energy market, which makes feed-
in premium applicable in the future32. From the authors perspective, Vietnam should prefer the feed-
in premium mechanism, this could help protect green hydrogen projects avoid high electricity price
by letting earn the price when the average price on the electricity market is too high. This could
also help financially support for renewable energy projects and create abundancy in renewable electricity.
On the perspective of direct financial support, Vietnam could establish a fund for green
hydrogen projects. This mechanism has appeared in the Netherlands and the UK. The revenue for
this fund could be earned from the ETS when it is officially operated in Vietnam. On the
methodology for choosing financing projects, the investors could join through submitting
applications or a tendering process. And most importantly, quickly establishing an ETS will greatly
increase the overseas investment. Through the crediting mechanism of the ETS, overseas investors
could seek for carbon credits in Vietnam through investing in green hydrogen projects. This method
along side with the direct and indirect financial support that we state above could contribute to
make Vietnam a promising country for investing in green hydrogen projects.
In the field of technical support, the UK has accepted for existing platforms of hydro carbon
production to be reused to build electrolyser. Vietnam could take experience from this and amend
the Article 34 Law of the sea 2012 to make use of the existing facilities on the Vietnamese sea to
produce green hydrogen. On the other hand, Vietnam should establish further regulations on the
grid connection and transportation. The problems of the Netherlands, the UK and Vietnam is that
no specific regulations on the technical side of green hydrogen have been promulgated. Investors
will find it difficulties to build and operate green hydrogen projects in Vietnam. At the moment,
Vietnam has a proposal on piloting for direct grid connection. This is a good sign for green
hydrogen projects to directly connect to renewable energy projects. Thus, we should quickly put
this in action and quickly establish a regulation that allow direct grid connection from renewable
energy projects to green hydrogen facilities. In March 30th 2023, a green hydrogen factory was
constructed in Vietnam with the total capital of 8.000 billion Vietnam dongs38. This is a good sign
32 Phan Trang, ‘Can som trien khai thi truong ban le dien canh tranh’ [Need to implement competitive electricity market
in Vietnam], Socialist Republic of Vietnam Government News, (Online, 25 October 2023) som-trien-khai-thi-truong-ban-le-dien-canh-tranh-102230609162310515.htm> 38 Hoai Thuong, ‘Khoi cong xay dung
nha may san xuat hydro xanh gan 8.000 ti dong’ [Building a 8.000 billion vietnamdong green hydrogen factory],
Tuoitrenews, (Online, 25 October 2023) 000-ti-dong-20230330172716287.htm> lOMoAR cPSD| 49981208
for the development of green hydrogen in Vietnam, but still, there will be problems of transportation,
storage of green hydrogen in the future when the factory was fully built. Making a complete
framework on green hydrogen is very important.
Conclusion: The role of green hydrogen to net-zero is undeniable. However, the regulations
regarding the promotion of this energy in Vietnam are still scare. After studying the regulations
Netherlands and the UK, the authors realize that there are some precious lessons that can be learnt
from the two countries. Notably, the ETS policies will play the main role for promoting green
hydrogen in Vietnam through implementation of obligation and financial support. More than that,
technology support mechanism such as direct grid connection, erection of green hydrogen
platforms… should also be greatly considered. These factors would contribute to the enhancement
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