The International Tracking Standard Foundation (the I-TRACK Foundation) and the Local Issuer for Vietnam (GCC) have received inquiries from Registrants and Participants in Vietnam with respect to the classification of production facilities marked “supported” vs “non-supported.”
At the point of facility registration, Registrants are asked whether the asset has received financial support such as a feed in tariff (FIT) or subsidy. Facilities that have received financial support are required to be marked as “supported” by the Registrant. The purpose of this classification is to provide transparency as to whether facilities have received financial support, which may be used as a qualification of purchase by some buyers.
It has come to the attention of the I-TRACK Foundation that some Registrants in Vietnam have marked their facilities “supported” (based on evidence submitted in the asset registration process), while others with assets of similar categories have indicated their assets are “non-supported”, also based on the submission of corresponding documentation. As a result, there are facilities in Vietnam that have similar contract structures, but which have different classifications of “supported” and “non-supported”, leading to market concerns.
Given that the classification of “supported” vs “non-supported” can have commercial implications for the transaction of I-REC(E) certificates, the I-TRACK Foundation and GCC have conducted a detailed review of support mechanisms in Vietnam to unify facility classification practices. Updates to “supported” classification will be rolled out uniformly for all facilities in Vietnam to support balanced comparison between I-REC(E) certificates.
Evaluating classification of “supported” in Vietnam: A review of Vietnam’s current support mechanisms reveals that most renewable energy projects in the country benefit from FITs or subsidy, which offer higher rates for specified renewable generation facilities than for other fossil-based generation facilities.[1] Exceptions to this may exist, for example for some hydropower production facilities, which may not receive financial incentives or preferential rates. Whilst many Vietnamese facilities in the I-REC(E) ecosystem are already marked as “supported”, some registered facilities are marked “non-supported”, despite potentially benefitting from FITs or subsidy, which may have led to misclassification.
Process of Review and Implications for Registrants and Participants: Starting on 4 March 2025, Registrants with facilities marked “non-supported” in Vietnam will receive an email from GCC. This email will reference the present notice and request that Registrants urgently review the commercial documentation for their facilities and confirm, providing supporting evidence, that they meet the “non-supported” criteria or if their classification should be updated to “supported”. In the absence of confirmation, together with supporting evidence, that a facility meets the criteria for “non-supported”, the facility will be re-classified as “supported”. Please note that whilst issued and redeemed certificates will remain unaffected, as they cannot be modified, any new issuance requests will need to be accompanied by evidence that the facility is correctly classified as “non-supported”. Facilities currently registered will retain their registration status, with their classification either updated or maintained, and any new facilities will need to be correctly classified at the point of registration. This review process aims to enhance transparency and uphold the integrity of the Vietnamese market.
Welcoming feedback and the potential for new classification features. The I-TRACK Foundation and GCC welcome feedback from market participants and any other interested stakeholders. Based on requests from market participants, the I-TRACK Foundation, GCC, and other relevant Market Facilitators may introduce additional classification features to differentiate the use of the term “supported”. These features could indicate special circumstances, such as those in Vietnam, where all or most facilities receive some form of financial support. While no such requests have been made as of the date of this notice, the I-TRACK Foundation and associated Market Facilitators remain open to feedback and look forward to enhancing transparency features associated with the I-REC(E) instrument.
[1] Several sources were used in preparing this notice, including both text resources and interviews with experts. Core principles are effectively summarized here.