Vietnam has decided to increase the feed-in-tariff (FiT) for biomass power projects to VND1,634/kWh (7.03 US cents) for co-generation heat power projects and VND1,968/kWh (8.47 US cents) for other types of biomass projects. The adjustment in FIT was stated in Decision 08/2020/QĐ-TTg dated March 5 by the Prime Minister, which amends and supplements part of Decision 24/2014/QĐ-TTg issued on March 24, 2014. The adjustment is vital to attract more investment in the biomass electricity sector and enables the country to achieve the objectives of the revised Power Development Plan VII by 2030, in which biomass electricity capacity is targeted to reach 3,000 MW in 2030. In 2019, only 175 MW of installed biomass capacity was fed into the grid.

The IKI-funded project “Climate Protection through Sustainable Bioenergy Markets in Vietnam” (BEM) has been working with its political partner, the Electricity Regulatory Authority of Vietnam (ERAV) under MOIT, since 2019 to improve the preconditions for sustainable use of biomass for electricity and heat generation in the country. The project staff considers the increase of the FIT as a very positive signal from the government demonstrating that bioenergy will have its place in the future energy matrix.