Sustainability Insights #16

In late March, EU member states approved the European Commission’s “stop-the-clock” directive, which delays the implementation of key sustainability regulations:

• Corporate Sustainability Reporting Directive (CSRD)
• Corporate Sustainability Due Diligence Directive (CSDDD)

This directive is part of the Omnibus package, aimed at reducing the regulatory burden on companies, particularly small and medium-sized enterprises (SMEs).

CSRD:

1. A two-year delay in applying the directive for large companies not yet reporting and listed SMEs.
2. The scope of CSRD may be limited to companies with more than 1,000 employees and annual revenue exceeding €50 million, potentially excluding 80% of firms from its requirements.

CSDDD:

1. The transposition deadline and the first phase of application will be postponed by one year.

On April 3rd, the European Parliament voted to delay the application dates for these new EU laws. The Parliament and the Council are expected to formally adopt the postponements in the coming weeks. Discussions will continue to refine the proposed changes to the regulations.

Source: European Commission Press Corner

Starting in 2025, we are actively reducing greenhouse gas emissions by committing to 100% renewable electricity at our production facilities in Dongguan and Shanghai, China. Alongside generating solar energy on-site, we are sourcing all electricity from renewable energy providers to meet our sustainability goals and align with global climate action frameworks.

This initiative advances our sustainability goals by cutting Scope 2 emissions through renewable energy sourcing. It reflects our commitment to climate action, aligns with science-based targets, and strengthens our contribution to global environmental progress.

As the world faces the challenges of climate change, countries are increasingly adopting renewable energy to promote sustainable economic growth. China and Vietnam are leading examples of nations implementing forward-thinking policies to accelerate the transition to green energy.

China: Advancing the Green Electricity Certificate (GEC) Market

China has introduced the “Opinions on Promoting High-Quality Development of the Renewable Energy Green Electricity Certificate Market” (“Opinion”). This policy aims to establish a strong market for Green Electricity Certificates (GECs), which represent the environmental value of renewable energy.

Timeline and Goals:

• By 2027: A comprehensive trading system combining mandatory and voluntary consumption mechanisms.
• By 2030: Increased GEC consumption, enabling domestic and international circulation.

Key Strategies:

• Stabilize GEC supply through automatic monthly issuance.
• Expand green electricity trading and enhance transparency in cancellations.
• Introduce mandatory consumption requirements to drive demand, increasing the green electricity consumption ratio in industries.
• Optimize trading mechanisms to establish a reliable price formation system for long-term purchase agreements.

These measures will drive industrial adoption of renewable energy, boost market confidence, and encourage sustainable practices across sectors.

Vietnam: Prioritizing Renewable Energy Development

Vietnam’s Electricity Law, enacted in February 2025, places renewable energy at the center of its long-term energy strategy. The law prioritizes solar, wind, nuclear power, green hydrogen, and green ammonia to meet the country’s growing energy needs sustainably.

1. Decree 58/2025/ND-CP (March 2025)

• Offshore Wind Energy: Provides clear guidelines for self-production and self-consumption.
• Rooftop Solar Systems (RTS):
  • Developers can choose whether to connect to the grid.
  • If connected, up to 20% of RTS capacity can be sold to Vietnam Electricity (EVN) for surplus power.

2. Power Development Plan (PDP8): Revised in 2025, the plan aims to increase solar power capacity dramatically to 34,000 MW.

By creating clear policies and ambitious capacity goals, Vietnam is attracting investment and fostering innovation in renewable energy technologies.

Source: cnccounsel.com/ www.gov.cn

China’s evolving energy trading systems offer companies two distinct ways to support renewable energy:

• Green Energy Certificates (GECs): These represent the environmental value of renewable energy. Companies can purchase GECs to claim green energy use without receiving physical renewable electricity.
• Green Electricity Trading: This links GECs with electricity contracts, enabling companies to directly purchase and consume renewable energy, aligning production with consumption.

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