Piloting Policy Compliance Best Practices in Vietnam
Rapid growth and industrialization have seen electricity consumption triple over the past decade in Vietnam, with cooling demand contributing a major portion of that growth. CLASP and our local partners kicked off a series of pilot activities that will support effective policy compliance for air conditioners and help protect markets from inefficient and low-quality products.
This month CLASP and Ecology and Environment Institute (EEI) kicked off a series of pilot activities that will support effective policy compliance for room air conditioners (ACs) in Vietnam. Following a revised national commitment to reduce emissions growth by 2030, the activities will test new market surveillance tools and methods to help protect markets from inefficient and low-quality products.
Rapid growth and industrialization have seen electricity consumption triple over the past decade in Vietnam, generated primarily through the combustion of fossil fuels and driving an average 5% rise in greenhouse gas emissions annually. Demand for cooling is one driver of rising electricity consumption given both increasing average annual temperatures and an emerging middle class, whose size is expected to double by 2026. Vietnamese policymakers revised standards for room ACs in 2015—surpassing the 2020 Association of Southeast Asian Nations (ASEAN) Target.
The risks of non-compliance with energy efficiency policies globally are high. Even with minimal non-compliance, global electricity consumption could increase 11-fold by 2026 (compared to 2018 levels) and result in USD 11 million excess electricity costs to consumers.
In 2020, the Ministry of Industry and Trade (MOIT) established the General Directorate of Market Surveillance (GDMS) to monitor and enforce compliance with standards. At the request of MOIT, CLASP and EEI assessed the opportunities for new or strengthened policy compliance processes, focusing on market surveillance efforts. The assessment informed a series of pilot activities to assist GDMS in identifying any room ACs, either imported or locally manufactured, that fail to perform as claimed or in accordance with minimum energy performance standards (MEPS) and the energy label. This month, CLASP and EEI launched the pilot in a workshop with Vietnamese policymakers and provincial market inspectors.
The activities are taking place in Ho Chi Minh City (HCMC), Vietnam’s largest city and one of two main ports of entry for imported room ACs, and aim to:
- Identify high-risk products: Identifying products at high risk of non-compliance facilitates the swift removal of inefficient products from the market while simultaneously reducing expenditure on random verification testing of low-risk products. Under the pilot, Vietnam is testing the use of a new risk-assessment tool and guidance developed by CLASP.
- Train retailers: Retailers, when trained on the benefits of MEPS and energy labels, are empowered to better identify non-compliance and encourage consumers to purchase higher efficiency products within their budget.
- Inspect markets: During market inspections, local market inspectors check products in-stores to assess compliance with energy efficiency labeling policies and procure products for testing. The results of the in-store inspections will provide useful data for assessing non-compliance risk levels.
- Verify product performance: An accredited, government lab will test products suspected of non-compliance with MEPS or failure to verify performance against its labels, and the results can be used as evidence for enforcement actions.
- Strengthen enforcement: Any confirmed cases of non-compliance can incur appropriate consequences that consider the severity, intention, and impact of the incident.
CLASP and EEI hosted a retailer training workshop, initiated market inspections alongside HCMC compliance officers, and procured ACs for testing this month in HCMC. Through these activities, retailers, manufacturers, importers, and local and national policymakers were able to clarify various gray areas in Vietnamese regulations and identify common challenges that can prevent compliance.
Ultimately, CLASP’s recommendations will support cost-effective market surveillance practices in Vietnam—bolstering government credibility, protecting consumers, and creating a fair environment for manufacturers selling energy-efficient and high-quality products. The recommendations can also inform MOIT’s revisions of certain compliance regulations, currently underway by MOIT, and serve as an example to other ASEAN countries.