00051000979 building a carbon neutral plan for an organization a case study in oil and gas company 00051000979 building a carbon neutral plan for an organization a case study in oil and gas company
The necessity of the research
Greenhouse gas (GHG) emissions are the principal drivers of anthropogenic climate change, leading to increased global temperatures and altered weather patterns (IPCC,
2021) In 2023, the total GHG emissions of Vietnam were approximately 524 MtCO2e Figure 1.1 illustrates the distribution of Vietnam's emissions across various sectors in
2023 The power industry constitutes the largest share at 30%, followed by industrial combustion at 21%, and agriculture at 18% The transport sector accounts for 7%, equivalent to 40 MtCO2e Overall, the data suggests that energy-related sectors (power industry, combustion and transportation) are the primary contributors to Vietnam's emissions profile In addition, the transport sector’s emissions have increased by more than 300% in 2023 compared to 1990 (Joint Research Centre, 2023)
Figure 1.1: Share of Vietnam emissions per sector 2023
As a party to the Paris Agreement under the United Nations Framework Convention on Climate Change (UNFCCC), Vietnam has voluntarily committed to mitigating GHG emissions, and the emission reduction target is communicated in its Nationally
Industrial Combustion Agriculture Processes Transport Fuel Exploitation Buildings
Waste second time, in which the GHG emission reduction targets by 2030 vs the Business as Usual (BAU) scenario will be 15.8% unconditionally (through domestic effort and resources) and 43.5% reduction in GHG emissions conditionally (with international support) These commitments are equivalent to reducing 146.3 million tCO2e unconditionally and 403.7 million tCO2e conditionally At the 26 th Conference of the Parties (COP), many countries, Vietnam, along with many other countries, pledged to achieve Net-zero emissions by 2050
Since the signing of the COP26 commitment, Vietnam has been actively working towards its net-zero goal by 2050, combining technological advancements with legislative actions These efforts include promoting the use of renewable energy, phasing out coal-fired power plants, enhancing energy efficiency across sectors, and integrating climate change mitigation targets into national planning and policy frameworks The Government has also encouraged the adoption of low-carbon technologies, green finance mechanisms, and circular economy practices to accelerate the transition to a sustainable and low-emission economy Legislatively, the government has been establishing mechanisms for mandatory carbon accounting and reduction the facility, sectoral and national level, along with carbon pricing and promoting green finance to support these initiatives
Government’s Decree No 06/2022/ND-CP dated 7 January 2022 on Regulations on Reduction of GHG Emissions and Protection of the Ozone Layer stipulates guiding details on the implementation of Law on Environmental Protection (LEP) 2020 on GHG inventory, GHG mitigation, and the domestic carbon market The Decree lays out the definition of which facility is obligated to report their GHG emissions starting from
2025 and reduce their GHG in the 2026 to 2030 period The facility subjected to this requirement includes the following:
Table 1.1: Facilities that must carry out GHG inventory by Decree 06/2022/ND-CP
The facility has an annual emission of ≥3,000 tons of CO2 equivalent Thermal power plants, industrial production facilities with total
Use (AFOLU) annual energy consumption ≥ 1,000 tons of oil equivalent (TOE)
Transport service company with total annual fuel consumption
The commercial building has a total annual energy consumption of ≥ 1,000 TOE
The solid waste treatment facility has an annual operating capacity of ≥ 65,000 tons
Table 1.1 defines the criteria for identifying sectors and facilities subject to GHG inventory and emissions reduction efforts, focusing on high‑emission sectors such as energy, transport, construction, industrial processes, agriculture, forestry, and land use At the facility level, mandatory reporting applies when an organization’s annual CO2e emissions reach or exceed 3,000 tons In addition, certain facility types within these sectors have thresholds based on energy or fuel consumption: thermal power plants and industrial production facilities are included if their total annual energy consumption is 1,000 tons of oil equivalent (TOE) or more; transport service companies with annual fuel consumption of 1,000 TOE or greater are included; commercial buildings are targeted if their total energy consumption is at least 1,000 TOE; and solid waste treatment facilities are included based on capacity, specifically 65,000 tons or more per year.
To confront the escalating climate crisis, the world has embraced a growing suite of international agreements, frameworks, and initiatives that urge both governments and non-state actors to cut greenhouse gas emissions These measures aim to limit global warming and achieve net-zero emissions by mid-century A leading example is The Race to Zero, a UNFCCC-driven campaign that mobilizes a global coalition of governments, businesses, cities, financial institutions, and educational institutions committed to advancing net-zero goals Participants pledge to halve GHG emissions by 2030 and reach net-zero emissions by 2050 at the latest.
Similarly, The Climate Pledge, co-founded by Amazon and Global Optimism, has set a more ambitious target by requiring signatory companies to achieve net-zero carbon emissions by 2040-ten years ahead of the Paris Agreement timeline (The Climate Pledge, n.d.) These initiatives reflect a growing consensus that climate action is not only a governmental responsibility but also a critical obligation of the private sector Companies are now expected not only to disclose their carbon footprints but also to establish concrete reduction and offsetting pathways, in alignment with science-based targets
Organizations worldwide, including those in Vietnam, are increasingly required to perform comprehensive GHG inventories, implement emissions reduction strategies, and develop long-term carbon neutrality or net-zero plans as regulatory frameworks tighten and market expectations rise National climate policies and environmental protection laws are gradually introducing legal duties, while global supply chains, investors, and environmentally conscious consumers push for greater transparency and accountability in corporate sustainability performance Consequently, businesses must adopt robust climate governance, disclose climate-related risks, and demonstrate credible progress toward emissions targets to maintain competitiveness and access to capital.
Vietnam has made notable progress at the national policy level, including its COP26 pledge to achieve net-zero emissions by 2050, but significant gaps remain at the sectoral and enterprise levels, particularly in transportation Many transportation companies lack the necessary tools, methodologies, and data systems to conduct GHG inventories, project future emissions, and evaluate cost-effective mitigation options This absence hinders their ability to develop robust and credible carbon neutrality strategies.
Developing a carbon neutral management plan at the company level is essential for bridging this gap Such a plan provides a structured approach for organizations to: Identify and quantify their emission sources; Analyze emission trends and future projections; Explore technical and financial options for emission reductions and implement offset mechanisms for residual emissions that cannot be eliminated
Ultimately, a well-founded carbon neutral management plan allows enterprises to strategically align with national climate goals and international sustainability standards, while also enhancing their competitiveness, operational efficiency, and reputation in the global market
This study will focus on a representative company in the oil and gas sector, whose main business involves fossil fuel distribution and has significant GHG emissions This study will help the company build a carbon neutral management plan based on the established standards so that it can be verifiable.
Literature review
Carbon neutral
Carbon neutral is defined by the ISO 14068-1:2023 standard as: “Condition in which, during a specified period of time, the carbon footprint has been reduced as a result of GHG emission reductions or GHG removal enhancement and, if greater than zero, is then counterbalanced by offsetting” (ISO, 2023) In short, to achieve carbon neutrality, an organization shall measure their GHG emissions, then reduce their emissions via mitigation measures and removal enhancement and neutralize the remaining emissions with emissions offset
According to the IPCC, carbon neutrality at the global scale, also referred to as net-zero carbon dioxide emissions, is achieved when anthropogenic CO2 emissions are balanced globally by anthropogenic CO2 removals over a specified period, while GHG neutrality, as defined by the IPCC, means the gross emissions of all GHGs (not just carbon dioxide) are balanced by the removal of an equivalent amount of carbon dioxide from the atmosphere At the organization or company level, carbon neutrality refers to all GHG emissions, not just carbon dioxide, to ensure the scope of the commitment covers the full climate impact of the entity, especially in sectors where methane emissions can be significant (IEA, 2023) Therefore, this document uses the ISO 14068-1:2023 definition of carbon neutrality for organization-level applications, which is equivalent to the IPCC definition of GHG neutrality.
Figure 1.2 outlines the periods for claiming carbon neutrality under ISO 14068-1:2023 In 2025–2027, the organization emits 100 tCO2e with no offset, resulting in net emissions of 100 tCO2e and thus no carbon-neutral claim In 2028–2030, the same emissions are offset to achieve net zero, but since no GHG mitigation measures were implemented, the organization does not qualify for carbon neutral status under ISO 14068-1:2023 From 2031 to 2050, the organization adopts mitigation measures and offsets the remaining emissions, meeting the standard’s conditions to qualify for a carbon-neutral claim Additionally, the organization can reach net-zero by further reducing GHG emissions through mitigation and offsetting only the residual emissions with carbon credits, as shown for 2046–2050 in Figure 1.2.
Figure 1.2: Example of Carbon Neutral pathway according to ISO 14068-1:2023
Source: Interpreted by Author according to ISO 14068-1:2023
With the growing number of climate commitment, it is necessary to establish a common framework or standard to demonstrate and verify carbon neutrality claim, preventing over commitment and greenwashing ISO 14068-1 is a global standard that provides guidelines for achieving and demonstrating carbon neutrality at the organizational level
It aim to quantify, reduce, and offset GHG emissions, with a hierarchical approach prioritizing direct and indirect GHG emission reductions and removal enhancements within the value chain over offsetting (ISO, 2023) It's part of a broader series of standards (14064, 14065, 14066, 14067) that address various aspects of GHG accounting, reduction and verification This series provides a robust framework for organizations or products to quantify and report their total GHG emissions, GHG emissions reduction measures, which then can be verified by competent verification bodies, serving as a solid foundation for the carbon neutral plan The ISO series’ principles are also compatible with other prevalent GHG standards such as GHG Protocol
Aligning with global climate objectives such as the Paris Agreement, ISO 14068 stands as a global standard accessible to companies and organizations worldwide seeking to achieve carbon neutrality The ISO 14068-1 certification, specifically, is designed to be applicable to all types of organizations – irrespective of their size, industry, or operational complexity (ISO, 2023) Officially published in December 2023 and recently taking effect on January 1, 2025, this new standard has already witnessed early adoption, with several organizations achieving certification by April 2025
Crown Oil, which is a fuel supplier in the United Kingdom, is the first company in the
UK aims to be certified carbon neutral by BSI under the new ISO 14068-1 standards, as reported by Crown Oil in 2025 Under the ISO framework, the country has disclosed 2024 emissions of 5,695 tCO2e and set a target to reduce these by 42% by 2028 and achieve net-zero by 2050 The primary emissions-reduction strategy is the use of hydrotreated vegetable oil (HVO) in vehicle fleets, providing a diesel alternative to lower transport emissions.
In addition, other manufacturers such as Shanghai SOLID Stainless Steel Products Co., Ltd in China, or AU Optronics in Taiwan has also recently demonstrated carbon neutrality via ISO 14068 certification (Carbon Newture, 2025) (AUO, 2024) Financial organizations such as Taiwan Stock Exchange also strive toward carbon neutrality by becoming the first Exchange to be certified under ISO 14068-1 (TWSE, 2024)
Developing a carbon neutral plan in line with ISO 14068-1 enhances an organization's credibility and reputation worldwide The independent verification embedded in the certification process substantiates claims of carbon neutrality, signaling a genuine commitment to global climate goals By adhering to this international standard, companies position themselves as active participants in the global effort to combat climate change, aligning with pivotal agreements such as the Paris Agreement and relevant national policies.
The global movement towards carbon neutrality has gained significant traction, with a growing number of companies and organizations publicly announcing ambitious targets to reduce their carbon footprints across diverse sectors Research by Climate Impact Partners shows that in 2024, 45% of Fortune 500 companies have pledged to be carbon neutral by 2050, a significant rise from 39% the previous year and only 8% in 2020 (Climate Impact Partners, 2024) In addition, industry leaders such as Microsoft, Apple Google even make earlier commitments including carbon neutral or carbon negative by
2030 This ambitious commitment involves not only reducing its emissions across all three scopes but also investing in carbon removal technologies and aiming to remove all the carbon the company has emitted since its founding by 2050 Microsoft had previously achieved carbon neutrality through a combination of emissions reductions and purchasing renewable energy certificates, they recently acknowledged that its emissions have increased due to its significant investments in artificial intelligence infrastructure, necessitating a shift in its investment strategy towards long-term, higher- impact carbon removal projects and clean electricity procurement (Nakagawa, 2025)
The primary strategies employed to achieve carbon neutrality across the sector include making substantial reductions in GHG emissions through energy efficiency measures and the adoption of renewable energy sources, utilizing carbon offsetting mechanisms for residual emissions, and strategically investing in emerging technologies that offer pathways to deep decarbonization and even carbon removal For the energy and transportation sectors, which are the focus of this study, the emphasis is on shifting away from fossil fuels towards renewable energy sources, improving energy efficiency across the energy system, adoption of electric vehicles (EVs) for personal and commercial transportation and investing in carbon capture and storage (CCS) technologies to mitigate emissions from existing fossil fuel (Carbon Credit Capital, 2025)
To demonstrate their commitment to carbon neutrality, companies and organizations are pursuing third-party certifications, adhering to recognized reporting standards, and undergoing independent verification to boost credibility and transparency These certifications provide a structured framework that helps ensure their efforts align with established best practices Notable frameworks include PAS 2060, the internationally recognized British standard that specifies requirements for quantifying, reducing, and offsetting GHG emissions for organizations and products, and its successor ISO 14068-1:2023 In Vietnam, carbon neutrality efforts are increasingly integrated into corporate strategy as part of this global push.
As a member of the United Nations Framework Convention on Climate Change (UNFCCC), Vietnam has committed to reducing greenhouse gas (GHG) emissions with the goal of achieving net-zero emissions by 2050 These emission reduction targets are outlined in Vietnam's Nationally Determined Contributions (NDC) published in 2022 and in the National Climate Change Strategy (NCCS).
In the energy and transportation sectors, several studies on solutions towards carbon neutral economy have been conducted A study by Janne Hensen revealed the dependence of the energy sectors in Vietnam on fossil fuels, especially coal for power generation, while rapid economic growth will significantly increase the demand for energy The study analyzes the current energy mix and forecasts significant changes by
GHG emissions inventory policy and practice
a) Overview of Vietnam Policies, regulations and guidelines on GHG inventory, GHG reduction
Vietnam is actively addressing climate change by tracking and reducing greenhouse gas emissions It conducted its first national GHG inventory in 2003 as part of its initial communication to the UNFCCC, and has since regularly updated the inventory every two years while developing projections for future emissions under a BAU (business-as-usual) scenario.
Projections show a significant rise in emissions by 2030 and 2050 under the business-as-usual (BAU) scenario, underscoring the urgency of drastic action From 2022 to 2030, the Government has established sector-specific mitigation measures and targets in the NDC 2022 In the energy sector, Vietnam aims to reduce emissions by 24% relative to BAU with international support, achieved through measures such as improving energy efficiency in industry, promoting efficient energy use in transportation, limiting fuel consumption for motor vehicles, expanding the use of electric vehicles, and developing renewable energy To reach net-zero emissions by 2050, the Prime Minister issued Decision No 896/QD-TTg in July 2022 approving the National Climate Change Strategy for the period up to 2050, which provides a roadmap with phased targets By 2030, the energy sector aims to reduce emissions by 32.6%, keeping total emissions below the BAU trajectory.
457 million tons of CO2e By 2050, the energy sector's emissions reduction target is even more ambitious, aiming for a 91.6% decrease and limiting total emissions to 101 million tons of CO2e
The NCCS has outlined strategies to mitigate emissions within the energy and transportation sectors Regarding energy supply, the promotion of alternative sources such as hydrogen, ammonia, and renewable energy is prioritized On the energy demand side, emphasis is placed on enhancing energy efficiency through the adoption of efficient practices and equipment, alongside the development of green building infrastructure For the transportation sector, mitigation measures encompass the establishment of fuel consumption standards, the incentivization of electric and hydrogen vehicle adoption, and the development of sustainable transportation infrastructure (Prime Minister of Vietnam, 2022b)
In additions, to achieve the targets outlined in the NCCS, Vietnam has developed specific roadmaps for various sectors For the industrial and trade sectors, Decision 2600/2024/QD-BCT, issued in September 2024, outlines an emission reduction plan covering energy, industrial processes, and product use This plan details mitigation measures, implementation plans, and associated costs for the 2025-2030 period In the transportation sector, Decision 876/2022/QD-TTg has been promulgated to support the development of a green transport system This action plan aims to achieve the NDC targets for 2030 and net-zero GHG emissions by 2050 for the transport sector Specifically, this action plan sets out mitigation measures implementation roadmaps for each period For 2022 to 2030, the action plan encourages the development of electric vehicles, as well as imposing 100% usage of bio-gasoline E5 for road transport vehicles For the 2031 to 2050 period, the emphasis is shifted fully to electric vehicles and related infrastructure, highlighting the important of this measures in achieving carbon neutrality (Prime Minister of Vietnam, 2022a)
On the facility level, Decree 06/2022/ND-CP lays down the first obligation for GHG inventory and GHG emissions reduction reporting requirements The inventory needs to follow the methodologies outlined in the decree and referenced international standards
Guidelines aligned with IPCC methods indicate that, by September 2024, three Circulars issued under Government Decree No 06/2022/ND-CP require facility-level GHG inventories for solid waste treatment facilities, forestry facilities, and industry and trade facilities For emission reduction, facilities are encouraged to adopt the measures and methodologies identified in Vietnam’s Nationally Determined Contribution (NDC) There are no requirements or guidelines at the time of this research mandating companies to achieve net-zero emissions.
Figure 1.3: GHG inventory and GHG mitigation reporting timeline
Source: Author complied based on Decree 06/2022/ND-CP
To further support the implementation of the Decree, on 18 January 2022, Prime Minister’s Decision No 01/2022/QD-TTg defining the List of Sectors and Establishment Required to Perform GHG Inventory was issued, listing 1912 facilities that are required to implement and report on GHG inventory and reduction activities according to the schedule up to 2030 Furthermore, the number of facilities will be reviewed and updated every two years On August 13, 2024, the government issued Decision No 13/2024/QĐ-TTg updating the List of Sectors and Establishment Required to Perform GHG Inventory was issued Accordingly, the number of facilities increased from 1,912 to 2,166 This demonstrates that more and more facilities will be imposed to mandatory report their emissions and reduce their emissions in the future, highlighting the importance of proactive actions such as building a carbon neutral management plan b) Overview of GHG inventory and emission reduction practices in facilities in Vietnam
Since Decree 06/2022/ND-CP is the first national requirement for GHG inventory, there were not many facilities and companies that have experienced or had conducted GHG inventory before (Khanh Ly, 2024) Only big corporations such as Vinamilk, Vingroup, etc had voluntarily conducted GHG inventory and disclosed their emissions for their Environmental Social and Governance Report In April 2025, Vietnam National Petroleum Group has been certified for their GHG inventory report according to ISO 14064-1:2018, marking the first large-scale state-owned corporation in Vietnam achieved this certification (Quang, 2025) Voluntary efforts at the facility level in Vietnam has been using international recognized standard such as GHG Protocol or ISO 14064-1 for their GHG inventory On the other hand, facilities that are mandatory to conduct GHG inventory will need to follow national guidelines Circular on their report However, both international and national guidelines are based on the foundation of IPCC Guidelines for National Inventory, thus they share many similarities and sometime can be used interchangeably
International firms and exporters to the European Union are increasingly conducting GHG inventories and calculating carbon footprints for their products to meet importer requirements In 2023, the European Union introduced the Carbon Border Adjustment Mechanism (CBAM), a carbon pricing scheme based on the GHG emission intensity of imported goods, which now requires Vietnamese exporters of affected products to carry out GHG inventories and emissions reporting.
In 2023, Vinamilk announced that 2 of their facilities had achieved carbon neutrality and they were certified according to PAS2060 standard (Linh Le, 2023) They were the first dairy facilities to achieve the certification in Vietnam, pioneer in the establishment of carbon neutral plan, setting a great example for other companies in the race to net- zero Overall, the awareness and experience in GHG emission reporting, especially in carbon neutral management is very limited in Vietnam c) Overview of GHG inventory and emission reduction policy and practices globally
Globally, countries are required to submit their national GHG inventories to the UNFCCC as part of their commitments under the Paris Agreement These inventories often follow guidelines provided by the Intergovernmental Panel on Climate Change (IPCC) and may be production-based (emissions within a territory) or consumption- based (emissions associated with goods and services consumed within a territory)
Emission reduction policies and practices worldwide are diverse and evolving, aiming to mitigate climate change by limiting the release of GHGs into the atmosphere These include a wide array of strategies implemented at international, national, and sub- national levels Regulatory policies such as emission standards for vehicles and industries, energy efficiency mandates for buildings and appliances, and renewable energy targets are common Market-based mechanisms like carbon taxes and cap-and- trade systems are also employed to incentivize emission reductions by putting a price on carbon Many countries are promoting the transition to renewable energy sources (solar, wind, hydro), improving energy efficiency across sectors, and developing sustainable transportation systems, including the adoption of electric vehicles Furthermore, efforts to reduce deforestation, enhance carbon sinks through reforestation and afforestation, and improve agricultural practices to lower emissions from land use are gaining momentum globally International cooperation, as seen in agreements like the Paris Agreement, plays a crucial role in setting global goals and facilitating the sharing of best practices and technologies for emission reduction
Global organizations rely on key frameworks and standards to guide the development of GHG inventories and the estimation of emission reductions The Greenhouse Gas Protocol (GHGP) Corporate Accounting and Reporting Standard is the most widely adopted framework, providing comprehensive guidance for quantifying and reporting emissions across an organization's value chain Complementing GHGP, the ISO 14064 series is also popular for quantifying GHG emissions within an organization and assessing emission reductions at the project level Together, these frameworks and standards ensure consistency and comparability in GHG accounting practices, which is crucial for effective climate change mitigation and for tracking progress toward global emissions reduction targets.
Carbon neutral approach for oil and gas companies
a) GHG emission sources in oil and gas companies
Since the mid-20 th century, oil & gas and its derived products have been the primary energy sources driving economic growth and societal development Their high energy density, ease of transportation, and relatively low cost made them ideal for powering industries, transportation, and residential sectors Consequently, oil and gas have played a central role in industrialization, urbanization, and the globalization of economies However, reliance on these finite resources has also contributed to significant environmental challenges, including climate change, air pollution, and resource depletion
A study by Comyns has analyzed the factors that influence the GHG reporting in oil and gas companies (Comyns, 2016) Larger companies with better financial performance tend to report more GHG emissions, likely due to increased regulatory scrutiny and stakeholder pressure Countries with stricter environmental regulations also have a greater influence on companies to report GHG emissions Membership in industry associations that promote GHG reporting can encourage companies to disclose their emissions Additionally, pressure from investors, customers, and other stakeholders can motivate companies to report GHG emissions, particularly those that prioritize corporate social responsibility These findings suggest that policymakers can encourage GHG reporting by implementing stricter regulations, providing incentives for companies to report, and promoting industry standards Investors, customers, and other stakeholders can also play a crucial role in driving GHG reporting by demanding transparency and accountability from companies (Comyns, 2016)
Due to these factors, oil and gas companies has improve their efforts in disclosing their GHG emissions information and climate impacts (Comyns & Figge, 2015) In this study,
245 sustainability reports of 45 oil and gas companies in the period of 1998 to 2010 were analyzed The results indicate that the rate of disclosure of GHG emissions has improved over time, but there were still gaps and inconsistencies in reporting Many companies exhibited a lack of transparency in reporting on their objectives and targets for GHG reduction While some companies failed to set reduction targets altogether, others, despite establishing targets, neglected to report any progress toward their achievement
Many oil and gas companies have announced varying levels of climate commitments, often centered around achieving "net-zero" emissions by a specific date, typically 2050 These commitments can include targets to reduce emissions from their operations (Scope 1 and 2) and, in some cases, emissions from the end-use of their products (Scope
3) (IEA, 2024) For example, Shell aims to become a net-zero emissions energy business by 2050, encompassing both their operations and the energy they sell They have set interim targets, such as halving Scope 1 and 2 emissions by 2030 compared to 2016 and reducing the net carbon intensity of their products (Shell, 2024) Similarly, TotalEnergies has a 2050 goal to have approximately half of its energy mix be low- carbon electricity b) Emission trends and future projections in the sector
The oil and gas sector remains one of the major contributors to global GHG emissions (IEA, 2024) In a business-as-usual (BAU) scenario, where current trends continue without significant new mitigation efforts, emissions from the sector are projected to rise, driven by increasing energy demand, particularly in developing economies (UNFCCC, 2021) These projections highlight the risk of locking in a high-emission pathway, making it increasingly challenging to meet global climate targets
BAU emission projections for the oil and gas sector vary across different models and assumptions but generally indicate a continued reliance on fossil fuels and a potential increase in emissions if aggressive mitigation strategies are not implemented (Nascimento et al., 2023) Several factors contribute to the projected increase in emissions under a BAU scenario Economic growth, particularly in industrializing nations, drives increased energy consumption, much of which is currently met by oil and gas Existing infrastructure and the long lifespan of oil and gas assets also lock in emissions for decades Additionally, the relatively slow adoption of renewable energy sources and carbon capture technologies in the sector contributes to the upward trend in emissions (IEA, 2024)
The discrepancy between BAU projections and the emissions reductions needed to limit warming underscores the urgent need for policy interventions, technological advancements, and a shift towards cleaner energy sources While there have been some recent declines in absolute emissions from oil and gas operations, such as the UK oil and gas sector saw an 11% decrease in overall upstream GHG emissions between 2018 and 2020 (Oil and Gas Authority, 2021), these reductions are partly attributed to improvements in emissions intensity, while demand remains a key driver c) Options for emission reductions
However, the inherent characteristics of oil and gas operations pose numerous challenges for setting net-zero targets These challenges include the need for significant investments in low-carbon technologies and infrastructure, the difficulty of decarbonizing existing oil and gas operations, the uncertainty surrounding future energy demand and technology development, and the potential for social and economic disruptions (Wang et al., 2023) The challenges are particularly intense for fast-growing economies such as Vietnam and China Current technologies for carbon capture, utilization, and storage (CCUS) and renewable energy integration may not be fully developed or cost-effective Ensuring effective implementation of government policies and regulations related to carbon neutrality can also be challenging Furthermore, collaborating with other countries to address global climate change challenges is crucial but can be complex (Zhang et al., 2023)
However, there are several studies that assess the potential mitigation measures that will support oil and gas companies to achieve carbon neutrality The study by Liu et al., 2023 suggests that improving oil and gas efficiency can play a significant role in mitigating climate change and achieving carbon neutrality by 2050 Other study by Jarboui, 2021 using a True Fixed Effect model suggests that investing in renewable energy can enhance the overall performance of oil and gas companies Carbon Capture and Storage (CCS), Hydrogen and electrification are also viable mitigation measures that would support a company transition to net-zero (Wang et al., 2023) d) Tackling the residual emission
Despite aggressive decarbonization efforts and breakthroughs in technology, the oil and gas sector faces a stubborn reality: completely eliminating greenhouse gas emissions is unlikely Residual or unavoidable emissions arise from inherent process limits, the ongoing operation of existing infrastructure, and certain applications where low-carbon options are not yet economically or technically feasible (IEA, 2023).
High-quality carbon offsets in the oil and gas sector offer a viable pathway to neutralize residual emissions by funding projects that avoid future emissions—such as renewable energy deployment and avoided deforestation—or by actively removing carbon dioxide from the atmosphere through afforestation and direct air capture Many leading oil and gas companies have used carbon credits to offset greenhouse gas emissions as part of achieving their climate goals Figure 1.4 highlights energy industry players like Shell, Primax Colombia, Eni, and Chevron as top buyers of carbon credits, with airline operators and other industries following.
Figure 1.4: Energy companies using carbon credits for offsetting
However, to ensure real climate benefits and environmental integrity, these carbon credits will need to be verified and registered under reputable standards such as the Gold Standard or mechanism under Article 6 of the Paris Agreement
An in-depth, company-specific study is essential to understand the emission profile and identify viable reduction opportunities For ONGC, India’s national oil company, a study was conducted to assess baseline GHG emissions across its diverse operational activities and to identify reductions through energy efficiency improvements, renewable energy integration, and carbon capture and storage (CCS) technologies, while also examining the associated challenges and barriers to implementation (Choudhary et al., 2018) The GHG emissions assessment was carried out in accordance with the GHG Protocol and ISO 14064-1:2006, ensuring consistent and credible data Such studies illustrate the value of GHG assessments for oil companies to inform their transition toward a low-carbon economy.
Based on the assessment, the suitable target for the case study can be established as net- zero by 2050, as it is consistent with the target of Vietnam and industry peers in the international context.
Introduction of the research site
This article analyzes a Vietnam-based oil and gas distribution company whose core business involves the transportation and retailing of petroleum products Headquartered in Hanoi, its primary operations are located in the northern provinces of Vietnam Petroleum products are transported from storage facilities to retail stores and clients by a fleet of tank trucks, enabling efficient distribution across the region The following details describe the company’s profile, network, and distribution activities.
• Company main activity: transportation of oil and gas products via tank trucks
• Boundary: offices, 10 stores, 6 tank trucks fleets with 267 vehicles
• Fuel consumption: >7,000,000 litter of Diesel
Research question and hypothesis
Based on the rationale of the study, the following research questions along with their corresponding hypotheses are developed as below:
Table 1.2 Research questions and hypotheses
1 What are the projected GHG emissions of the company by 2050 under Business-as-Usual (BAU) scenario?
1 The BAU emissions are dependent on company growth and vehicles fuel consumption
2 What is the necessary plan for the company to reach carbon neutral by
2 The most significant measure to reduce emissions of the company is transition to electric and biofuel for company vehicles
The following objectives and tasks along with their corresponding outputs and results have been introduced as follows:
Table 1.3 Research objectives and tasks
Research objectives Tasks Outputs Results
1 Estimate the company’s GHG emissions by 2050 under a Business- as-Usual (BAU) scenario, based on projected growth and fuel consumption patterns
Task 1.1: Desk review of national policy, requirements regarding GHG inventory and GHG emissions reduction
Task 1.2: Desk review the current practice of oil and gas companies in the
O1.1: Vietnam policy, requirements regarding GHG inventory and GHG emissions reduction
O1.2: current practice of oil and gas companies in the world
R1: GHG emissions by 2050 under a Business-as-Usual (BAU) scenario world
Quantify the current GHG emissions at the company in 2023
Estimate the future GHG emissions in the BAU scenario in
O1.3: GHG emissions at the company in 2023
O1.4: Future GHG emissions in the BAU scenario in 2050
GHG mitigation and offsetting plan for the company to achieve net-zero emissions by 2050
Task 2.1: Assess the available emission reduction measures feasible at the company
Quantify the potential of the selected emission reduction measures
Task 2.3: Build the carbon neutral plan
O2.1: Emission reduction measures feasible at the company
O2.2: Emission reduction potential of selected emission reduction measures
R2: A comprehensive and verifiable GHG mitigation and offsetting plan for the company to achieve net-zero emissions by 2050
Scope of the research: the scope of the research is all of the facilities in the company, with an assessment of the data in 2023 - 2050 period The duration of the research is six months, from December 2024 to May 2025.
Framework of research
This research will be conducted in accordance with VJU's established guidelines for thesis development The analysis will employ a rigorous methodology and maintain a logical flow of arguments throughout the document as in Figure 1.5
Figure 1.5: Framework of the Master’s thesis
Desk review
A comprehensive desk review was conducted to evaluate the current legal and policy framework related to GHG inventory and emission reduction in Vietnam The review aimed to: (i) identify national and sectoral GHG reduction targets, (ii) analyze the regulatory instruments and strategic plans guiding emission mitigation, and (iii) compile a list of officially recommended and technically feasible measures for emission reduction and offsetting applicable to the transportation sector
(i) National and sectoral GHG reduction targets
Several official documents have been reviewed to identify national and sectoral GHG reduction targets in Vietnam The summary of the results is shown in Table 2.1 below: Table 2.1: National and sectoral GHG emission reduction targets in Viet Nam
• Unconditional Target: 15.8% reduction in total
GHG emissions by 2030 compared to the Business- as-Usual (BAU) scenario
• Conditional Target: 43.5% reduction in total GHG emissions by 2030 compared to the BAU scenario, contingent on international support
• Energy: 32.6% emissions reduction (to or below 457
• Agriculture: 43% emissions reduction (to or below
• Forestry and Land Use: 70% emissions reduction;
20% increase in carbon sequestration (achieving at least -95 MtCO2e)
• Waste: 60.7% emissions reduction (to or below 18
• Industrial Processes: 38.3% emissions reduction (to or below 86 MtCO2e)
• Inline with NDC 2020 targets for 2030
• Net-zero GHG emissions by 2050
• Energy: 91.6% emissions reduction (to or below 101
• Agriculture: 63.1% emissions reduction (to or below
• Forestry and Land Use: 90% emissions reduction;
30% increase in carbon sequestration (achieving at least -185 MtCO2e)
• Waste: 90.7% emissions reduction (to or below 8
• Industrial Processes: 84.8% emissions reduction (to or below 20 MtCO2e)
Vietnam has demonstrated increasing ambition in its climate commitments, evidenced by its updated NDC in 2022 and its overarching goal of achieving net-zero emissions by
2050 The updated NDC sets an unconditional GHG emission reduction target of 15.8% below business-as-usual (BAU) by 2030, significantly higher than the previous 9%, and a conditional target of 43.5% below BAU with international support (Climate Action Tracker, 2023) Achieving the ambitious net-zero by 2050 target, which is enshrined in the National Climate Change Strategy to 2050, necessitates profound transformations across all key sectors, with a strong emphasis on the energy transition The energy sector (including transportation), being the largest emitter, aims for a drastic 91.6% reduction by 2050, primarily through massive deployment of renewable energies, enhanced energy efficiency, and a phase-out of new coal power plants after 2030(McKinsey & Company, 2022) (VNEconomy, 2024) The successful implementation of these targets is widely recognized as requiring substantial financial and technological assistance from international partners, as well as the development of a robust domestic carbon market (World Bank Group, 2022)
(ii) Regulatory instruments and strategic plans guiding emission mitigation
In preparation for the Decree 06/2022/ND-CP, line ministries have the responsibility to develop Circulars to provide guidance for sectors and facilities to conduct GHG inventory and GHG reduction calculations As of April 2025, the following Circular has been promulgated:
• Circular No.17/2022/TT-BTNMT on November 15, 2022 by Ministry of Natural Resources and Environment on Methods for Measurement, reporting, verification of reduction of GHG emissions and GHG inventory development in Waste management
• Circular No 23/2023/TT-BNNPTNT on December 14, 2023 by Ministry of Agriculture and Rural Development on Methods for Methods for Measurement, reporting, verification of reduction of GHG emissions and GHG inventory development in Forestry sector
• Circular No.38/2023/TT-BCT on December 27, 2023 by Ministry of Industry an Trade on Methods for Methods for Measurement, reporting, verification of reduction of GHG emissions and GHG inventory development in Industry and Trade Sector
Circular No 19/2024/TT-BNNPTNT, issued on December 3, 2024 by the Ministry of Agriculture and Rural Development, sets out the methods for measurement, reporting, and verification (MRV) of greenhouse gas (GHG) emissions and the development of GHG inventories in the animal husbandry sector The document defines standardized procedures for data collection, emissions calculation, validation of results, and inventory preparation to support accurate and transparent GHG accounting in livestock production, aiming to strengthen environmental governance and compliance within the sector.
• Circular No 13/2024/TT-BXD on December 20, 2024 by Ministry of Construction on Methods for Methods for Measurement, reporting, verification of reduction of GHG emissions and GHG inventory development in Construction sector
• Circular No 63/2024/TT-BGTVT on December 30, 2024 by Ministry of Transport on Methods for Methods for Measurement, reporting, verification of reduction of GHG emissions and GHG inventory development in Transport sector
Overall, each line ministry has fulfilled their duties in providing the guidelines for GHG emissions reduction calculations for their sectors and facilities However, the Circular only provides a generalized approach for calculation of all emissions reduction activities as in equation (1):
Emissions reduction = Baseline emissions – project emissions (1)
Baseline emissions is the estimated emissions of the facility in a year where mitigation measure was not implemented (tCO2e)
Project emissions is the emissions of the facility in a year where mitigation measure was implemented (tCO2e)
Source: (Ministry of Industry and Trade, 2023)
These regulations require quantification to follow IPCC Guidelines (2006 and 2019 refinements), ensuring principles of transparency, accuracy, consistency, comparability, and completeness (Van Pham Dang Tri et al., 2023)(Pham, 2019) The overarching framework emphasizes the development of a robust Measurement, Reporting, and Verification system to track progress towards national mitigation targets and facilitate carbon market operations (Pham Thanh et al., 2021)
In addition, secondary data (emission factors, offsetting price, etc) are collected from available reliable sources such as published research Source of secondary data for emission factors includes:
• Decision No 2626/QD-BTNMT dated October 10, 2022 of the Ministry of Natural Resources and Environment Publishing the list of emission factors for GHG inventory development;
• Dispatch No 327/BĐKH-PTCBT dated March 19, 2024 of the Department of
Climate Change - Ministry of Natural Resources and Environment Publishing the results of calculating the emission coefficient of Vietnam's power grid in 2022
• 2006 IPCC Guidelines for National GHG Inventory
• 2019 Refinement to the 2006 IPCC Guidelines for National GHG Inventory
• The global warming potential (GWP) value of GHGs was collected from the Sixth Assessment Report (AR6) of the IPCC
GHG emissions factors used are summarized in Table 2.2:
Table 2.2: Emission factors used for GHG assessment
No Emission factor name Value Unit Source
CO2 emission factor of gasoline - Road transportation
69,300 Kg CO2/TJ Decision 2626/QĐ-
CH4 emission factor of gasoline - Road transportation
33 Kg CH4/TJ Decision 2626/QĐ-
N2O emission factor of gasoline - Road transportation
CO2 emission factor of diesel oil - Road transportation
74,100 Kg CO2/TJ Decision 2626/QĐ-
CH4 emission factor of diesel oil - Road transportation
3.9 Kg CH4/TJ Decision 2626/QĐ-
6 N2O emission factor of diesel oil - Road 3.9 Kg N2O/TJ Decision 2626/QĐ-
No Emission factor name Value Unit Source transportation
Table 7.SM7, Supplementary Material, Chapter 7, AR6, IPCC
(iii) Officially recommended and technically feasible measures for emission reduction and offsetting applicable to the transportation sector
The NDC establishes sector-specific mitigation measures, including those for the transport sector It also requires facilities to implement appropriate mitigation measures in accordance with the NDC as mandated by Decree 06/2022/ND-CP Table 2.3 provides a concise summary of the transport sector mitigation measures outlined in the NDC.
Table 2.3: Recommended mitigation measures in the transport sector
2030 period with domestic resources (MtCO 2 e)
Total emission reduction potential in
E.17 Limiting fuel consumption for new manufactured, assembled and imported motor vehicles
E.18 - E.18s Shifting passenger transportation from private to public transport
E.19 - E19s Shifting the transportation mode from roadway to railway
E.20 - E.20s Shifting the transportation mode from roadway to inland waterway and coastal way
E.21 - E.21s Encourage the used of CNG buses 0.01 0.01 0.01
E.22 - E.22s Increase load factor of truck 0.80 0.34 1.14
E.23 - E.23s Encouraging the use of biofuel 1.54 0.39 1.93
E.24 - E.24s Encouraging the use of electric car 0.86 3.45 4.31
Source: (Socialist Republic of Vietnam, 2022)
Numerous studies indicate that deploying fuel-saving technologies, shifting transportation mode preferences, and rapidly electrifying fleets can substantially reduce life-cycle GHG emissions for both passenger and freight vehicles, with effects especially pronounced in non-OECD countries like Vietnam due to less advanced baselines A literature review of 81 peer‑reviewed articles finds drivetrain improvements and careful fuel selection among the top recommended strategies Other analyses emphasize advancements in renewable energy integration, carbon capture and storage, and more efficient logistics as critical levers for cutting GHG emissions in oil and gas distribution, though these gains face challenges such as high capital costs, infrastructure gaps, and regulatory barriers.
In parallel, the study examined existing practices and strategies implemented by other companies-both domestically and internationally regarding GHG quantification, emission reduction target-setting, and the development of carbon neutrality roadmaps This benchmarking exercise provided a comparative perspective and enabled the formulation of tailored recommendations for the target company, focusing on the development of a verifiable and cost-effective carbon neutral management plan
For GHG inventory, GHG reduction and development of carbon neutrality, the ISO
GHG emission quantification
The GHG emission are identified according to ISO 14064-1:2018 Greenhouse gases - Part 1: Specification with guidance at the organization level for quantification and reporting of GHG emissions and removals (ISO, 2018) and the methods for calculation will be according to IPCC Guidelines for National Greenhouse Gas Inventories (2019 Refinement, 2013 Supplements, and 2006 versions) The emission of the company can be calculated by equation (2)
Emission = Activity data x emission factor x GWP (tCO2e) (2)
The emissions from each source of the company are calculated as follows: a) GHG emissions directly from fuel combustion activities
GHG emissions from the burning of stationary or mobile fuels are calculated using the equation (3)
𝑇𝑃𝑇 𝐹 is the total CO2 emission equivalent of GHG i directly from the combustion of fuel F (tons of CO2e); i is the type of GHG that is inventoried;
F is a fuel used for combustion activities to generate energy;
𝐴𝐷 𝐹 is the fuel consumption F (TJ);
𝐸𝐹 𝐹,𝑖 is the emission coefficient of GHG i for fuel F (kg/TJ);
𝐺𝑊𝑃 𝑖 is the global warming potential coefficient of GHG i, applied according to the latest IPCC guidelines b) GHG emissions leaking HFCs and HCFCs in refrigeration and air conditioning equipment
GHG emissions associated with refrigerant leakage from refrigeration and air conditioning equipment are calculated according to equation (4)
𝑇𝑃𝑇 𝑚𝑐𝑙 is the total amount of GHG emissions from the leakage of refrigerants j
(tons of CO2e); j is a type of refrigerant;
𝐴𝐷 𝑗 is the amount of refrigerant J leaks annually (kg)
The amount of refrigerant leaking is calculated as in equation (5)
𝐶 𝐴 is the amount of refrigerant J loaded into the new unit – the nominal load
(kg); k is the percentage of refrigerant leakage on the nominal charge c) Indirect GHG emissions due to the use of externally purchased electricity
Indirect GHG emissions due to the use of externally purchased electricity are calculated according to equation (6)
𝑇𝑃𝑇 𝑒𝑙𝑒𝑐 total indirect CO2 emissions from electricity use purchased from source n (tons of CO2e); n is the source of electricity purchased by the establishment, including grid electricity and/or electricity purchased directly;
𝐴𝐷 𝑛 is the total amount of electricity purchased from source n (MWh);
𝐸𝐹 𝑛 is the CO2 emission coefficient from source n (tons of CO2e/MWh).
GHG emission projection
The GHG emission level of the future were calculated based on emission intensity and future activity level in BAU scenario for each emission source The BAU scenario is the scenario where no emission reduction efforts were taken, thus the emission intensity will remain the same The activity level was based on company production and development plan i.e growth targets, expansion plan… The emission factors of each source will be assessed under the BAU scenario, taken into account the existing technologies and the
𝐸 𝐵𝐴𝑈,𝑦 BAU emission in year y (tCO2e);
𝐸𝐼 𝑗 Emission intensity of source j (tCO2e/unit)
𝐴𝐿 𝑗,𝑦 Activity level of source j in year y (unit)
For the case study, the main activities are oil and gasoline transportation via the truck fleet and retail at the stores Thus, the main activities levels and the growth rates are the transportation volume (m 3 km) and sale volume (m 3 ) were collected for the base year The emission intensities are calculated in the base year of 2023 and assume to remain constant as no emission reduction efforts were taken Only one BAU scenario, where the company retains their current technology and practice, is established for this study
The BAU emissions for the transportation activities for the period of 2024-2050 were calculated from the transportation emissions intensity of 2023 multiple with the annual activity levels The emissions intensity of the transportation activity in 2023 is calculated from the total mobile emissions from the tank truck fleets divided by the transportation volume, noted as kgCO2e/m 3 km The annual activity level for transportation activity is calculated from 2023 activity level multiple with the respective growth rate of transportation activity in 2024-2034 and 2035-2050
The BAU emissions from the retail activities for the period of 2024-2050 were calculated from the retail emissions intensity of 2023 multiple with the annual activity levels The emissions intensity of the retail activity in 2023 is calculated from the total remaining emissions (stationary combustion, refrigerant, electricity) divided by the retail volume, noted as kgCO2e/m 3 The annual activity level for retail activity is calculated from 2023 activity level multiple with the respective growth rate of retail activity in 2024-2034 and 2035-2050.
GHG emissions reduction quantification
Emissions will be identified according to ISO 14064-2:2018 Greenhouse Gases – Part 2, which provides specifications and guidance at the project level for quantification, monitoring and reporting of GHG emission reductions or removal enhancements (ISO, 2019) This approach integrates previous studies on mitigation measures and aligns with Vietnam's national strategy The potential for emission reductions can be calculated using equation (8).
Emission reduction = Baseline emission – project emission (tCO2e) (8)
The baseline emission is the emission in the scenario where no emission reduction project was implemented, calculated using the BAU activity level and emission factors The project emissions are calculated when an emission reduction project is implemented, taking into account new emissions factors For the emission reduction estimation, 2 scenarios were established, reflecting a high and low reductions potential The high scenario represents the optimistic case where the mitigation measures are highly effective On the other hand, the low scenario shows a pessimistic case where the reductions are not as drastic and more efforts in offsets are needed
For energy efficiency measures, the high scenario represents a future where the most cutting-edge efficient equipment and energy efficient management practices such as smart HVAC or BMS are implemented, resulting in high energy savings rates Alternatively, in the low scenarios, only less than ideal energy savings measures were employed, leading to low emissions reduction results This measure is also influenced by the GHG emissions of electricity In case where full renewable energy is implemented and the emission from electricity is zero, then the energy efficiency measures do not result in direct emissions reduction, even though they still conserved electricity Thus, energy efficiency and renewable energy measures were assessed in tandem
Only one scenario was assessed for renewable energy: reaching 100% capacity by 2050 This choice reflects the readily available renewable energy technologies and a practically feasible capacity requirement for the company The assessment was confirmed by the company in an interview.
Route optimization presents two scenarios: a high scenario with advanced optimization algorithms and best practices that significantly lower fuel consumption for the same volume of goods, and a low scenario with less optimal practices that yield smaller efficiency gains Like energy efficiency measures, the emissions reductions from route optimization depend on the emissions intensity of the vehicles, which is shaped by complementary vehicle measures Therefore, these two measures were evaluated jointly to understand their combined impact on fuel use and emissions.
For alternative vehicles, the high scenarios represent high level of electric vehicles adoption along with clean electricity to fuel the fleet This is the optimal scenario that can reduce the most emissions for the company Nevertheless, in the low scenario, traditional vehicles are only partially replaced by electric vehicles, while others type of vehicles such as biodiesel are still in operation, resulting in lower decarbonization potential In summary, all of the high and low scenarios for each measure were consolidated to establish the high and low scenarios for the company
Project emissions associated with mitigation measures are estimated based on existing research, typically quantified as a percentage reduction from the baseline practice or technology The proposed reduction level is then reviewed with the company's technical staff to refine the estimate, ensuring it is practical and accurate.
Data collection and validation
Data for the study were gathered through GHG emissions measurement and emissions reduction quantification activities The GHG data collection period spans 1 January 2023 to 31 December 2023 Primary data, including the company’s activity records and development plans, were collected using questionnaires and interviews.
A data collection questionnaire (see Appendix) was developed according to the requirement of ISO 14064-1 to collect the activity data for the case study The development of the data collection questionnaire in accordance with ISO 14064-1 ensures that the collected activity data is relevant, complete, consistent, transparent, and accurate, aligning with internationally recognized best practices for GHG quantification The questionnaire is also generalized so that any company can use it to collect data and conduct the GHG quantification The questionnaire then was sent to the case study companies via email on 2 nd December 2024 and the company has 20 days to submit the information After that, the data and information were reviewed to analyze possible mistakes and inconsistencies, and the company was asked to revise the data in 1 week based on the findings of the assessment Only minor adjustments regarding the measurement unit were adjusted from the result of the review
In addition to the questionnaire, two interviews with the case study company were conducted to identify future developments plan, possible mitigation measures and feasibility of those measures, as well as to discuss the results and recommendations of the research The interviews were conducted with the head of the transportation operation department, who has comprehensive knowledge of the company operation and development strategies Due to the demands of the company's commercial operations, only one interviewee was available for participation in this study Nevertheless, the interviewee's managerial position ensured that their insights were highly influential and valuable for the research
This study uses qualitative data from interviews to ensure the results and recommendations are practical and aligned with the company's needs The first interview, conducted in January, focused on identifying applicable mitigation measures to support emission reduction estimation and to set the carbon neutral target The second interview, conducted in March after the initial carbon neutral plan was developed, assessed the plan’s practicality and implementation feasibility Continuous input and feedback from the company were collected to refine the carbon neutral plan and strengthen the overall research findings.
The list of primary data collected for the assessment is summarized in Table 2.4
Table 2.4: Type of primary data collected
Company boundaries, list of facilities and emissions sources n/a Business registration, inventory
List of company vehicles, categorized by type n/a Equipment inventory
Amount of fuel used/distance travelled by each vehicle annually l/year or km/year
Fuel consumption export sheets, fuel invoices
Amount of fuel used for stationary combustion such as generators l/year Fuel consumption export sheets, fuel invoices
Amount of refrigerants leakage for vehicles and office air conditioning t/year Technical specification of the equipment: equipment types, capacity and refrigerant type
Amount of electricity consumption annual by the organization
Amount of goods transported per year t.km/year Annual report
Future development plan for the company
Carbon neutral target year n/a Interview
Input on the mitigation measures n/a Interview
Input on the results and recommendations of the research n/a Interview
The primary data was validated via checking the original documentation of the activity data and interview with the staff of the company The documentation, which includes the bill of purchased fuel or electricity bill from 1/1/2023 till 31/12/2023, was collected in tandem with the primary data This step is important to ensure that the data collected are accurate and verifiable
Data validation was conducted over a two-week period from 6/1/2025 to 17/01/2025 During validation, any discrepancies identified were discussed and confirmed with the case study company Figure 2.2 provides an example of the original document used for data validation The vehicle transport orders recorded the fuel usage for transporting the vehicles, and the total across all transport orders was cross-checked against the questionnaire data Likewise, electricity consumption reported in the questionnaire was validated against the original monthly electricity invoices to verify accuracy.
The collection of primary data through questionnaires and interviews was essential to obtain company-specific activity data and future development plans, providing a nuanced and accurate understanding of the case study company's emissions profile and mitigation potential In addition, the qualitative data gathered through interviews provided invaluable insights into the company's operational realities and future strategies, ensuring that the resulting carbon neutral plan is not only theoretically sound but also practically implementable Any inaccuracies in the underlying GHG data could lead to flawed emission reduction projections and an unrealistic carbon neutral plan, thereby undermining the practical value of this research
Figure 2.2: Example of original documentation for vehicle transportation order (left) and electricity bill (right)
Source: Provided by the case study company
Primary data are presented in the Appendix; these comprehensive and validated data collected through the methods used in this study provide a robust and reliable foundation for subsequent analysis and for developing practical, evidence-based recommendations.
Carbon neutral plan building
The carbon management plan was established based on the ISO 14068-1:2023 (ISO,
2023), in combination with the findings of the previous activity and discussion with the company technical staff The steps to establish the carbon neutral plan includes:
• Identify the carbon neutral targets
• Quantify the GHG emissions reduction, prioritizing operational changes and technological improvements
• Establish pathways to implement measures for each phase of carbon neutral plan
Carbon neutral targets will be identified according to the company ambitions, allowing for a tailored approach that reflects its unique circumstances and strategic priorities This internal drive will shape the specific targets and timelines the company ultimately adopts However, recognizing the broader context of national responsibility, the company's minimum commitment shall align with the established national targets for instance at least a 15.8% reduction in emissions by 2030 compared to the projected business-as-usual scenario, and net-zero by 2050
GHG emissions reductions will be quantified using established scientific evidence and nationally approved calculation methodologies, ensuring progress toward carbon neutrality is measurable, transparent, and credible By integrating current scientific understanding with sector-specific lessons learned, the company will produce an accurate and informed assessment of achievable emissions reductions that will serve as a crucial input to its strategic pathway to carbon neutrality.
Finally, the implementation pathway will be developed based on the targets, available mitigation measures and resources and company priorities for each period The specific emissions reduction targets for each period will serve as crucial milestones, guiding the pace and scale of action In the context of the company's available resources and priority, including financial capital, technological capabilities, suitable mitigation measures will be proposed to meet the reduction targets This holistic approach will result in a practical and achievable roadmap that strategically balances ambition with feasibility, paving the way for a successful transition to carbon neutrality
Results
GHG emissions quantification
Oil and gas transportation companies generate emissions from a variety of sources, encompassing both direct and indirect GHG emissions Primary emission sources include combustion of fuels for transportation fleets (trucks, ships, trains), which predominantly release carbon dioxide (CO2), and methane (CH4)and Nitrous oxide (NO2) Additionally, fugitive emissions, particularly CH4, occur throughout the transportation process via leaks from pipelines, valves, and other equipment, as well as the refrigerants used on mobile transportation vehicles (EPA, 2024) Furthermore, energy consumption in supporting infrastructure, such as storage facilities, retail stores, gasoline pumps, contributes to indirect emissions through electricity usage, often derived from fossil fuel power generation (EPA, 2024)
This study focuses on Scope 1 and Scope 2 greenhouse gas (GHG) emissions for the case study company, aligned with Vietnam’s regulatory framework as stipulated in Decree 06/2022/ND-CP Although international best practices advocate including Scope 3 emissions for a comprehensive environmental assessment, reporting of Scope 3 is optional under current Vietnamese guidelines Despite recognizing the importance of Scope 3 data, its exclusion in this study is driven by the absence of reliable and comprehensive data for indirect emissions, along with methodological constraints in accurately quantifying them within Vietnam’s context As a result, the findings deliver a robust analysis within the mandated reporting boundaries, offering valuable insights into direct emissions and energy-related indirect emissions in Vietnam.
Figure 3.1: Boundary and emissions sources in case study company
For the case study, the data collections questionnaire has provided a deep look at the company’s emission profile, summarized in Figure 3.1 The main emission sources are from combustion of fuels, including diesel oil and gasoline However, the case study company does not have any pipeline transport or transportation via waterway, thus there were no emissions in those sources However, there are direct emissions from fuel combustion in stationary sources such as the backup diesel generators and emergency fire extinguishers pumps in the retail’s infrastructures There are also fugitive emissions from the leakage of air conditioning units on the vehicles and the retail stores Finally, electricity consumption in retail and office buildings The main emission sources identified are consistent with the EPA study, thus this case can be representative of the sector Table 3.1 summarizes the emission sources for the case study company
Table 3.1: Summary of emissions sources from the case study
Scope Type of emissions Emission sources Example of equipment
Using diesel oil for backup generators and emergency fire extinguisher pumps
Hyundai-Pentax 50HP fire extinguisher pump
Using diesel oil for petroleum tank trucks and gasoline for passenger vehicles
Leakage of air conditioning equipment on vehicles and in offices
Using purchased electricity in retail stores and offices
Lighting, HVAC, office equipment, fuel pump
Based on the data collected in the questionnaire, the emissions from these sources were validated and quantified in Table 3.2
Table 3.2: GHG emissions quantification for the case study
Activity data tCO 2 tCH 4 tN 2 O HFCs tCO 2 e ct
Diesel oil for stationary combustion
Diesel oil for mobile combustion
Source: Calculated by the author
These results form the basis for modeling the company's business-as-usual (BAU) emissions, which are projected in line with the growth of transportation volume and retail volume Growth factors are derived from historical growth or projected development plans; in this case study, the company supplied growth factors based on historical growth rates These factors are also used to inform the future production plan and development vision, representing theoretical assumptions that provide a rough estimate of future emissions The company should update the BAU emission scenario annually or biannually to reflect actual growth These growth factors were collected via questionnaire and discussed with the company Table 3.3 presents the parameters used for BAU emissions estimation.
Table 3.3: Parameter for BAU emissions
Beyond internal company growth, Vietnam's energy transition is incorporated into the BAU projection Vietnam's national Power Development Plan VIII (PDP VIII) outlines substantial increases in electricity production and imports over the coming decades By 2030, the total electricity output and imported volume are projected to reach about 567.0 billion kilowatt-hours (kWh) The forecast further anticipates a significant expansion through 2050, with electricity production and imports expected to range from 1,224.3 to 1,378.7 billion kWh, signaling a strong growth trajectory in the nation's energy supply.
However, this growth necessitates a parallel and urgent drive to reduce emissions, aligning with the nation's net-zero target by 2050 Consequently, the PDP VIII emphasizes the development of renewable energy sources (hydropower, wind, solar, and biomass) and emerging clean energy technologies like green hydrogen and ammonia Furthermore, the plan outlines a roadmap for phasing out high-emitting coal-fired power plants, capping their total capacity at approximately 30,000 MW by 2030 and achieving complete phase out by 2050
This results in a significant reduction in the emissions of the power sector For the year
2030, the PDP VIII aims to limit these emissions within an approximate range of 204 to
254 million tons A more stringent target is established for 2050, where the projected GHG emissions from electricity generation are intended to be reduced to a significantly lower range of approximately 27 to 31 million tons, demonstrating a long-term commitment to decarbonization within the energy sector As a result, the emissions factors for the national grid significantly reduces to only 0.45 tCO2e/MWh in 2030 and 0.02 tCO2e/MWh in 2050 The BAU projection will extrapolate the GHG emissions factors based on the 2030 and 2050 value to reflect the energy mix of Vietnam according to the latest Power Development Plan
For other sources of emissions, namely fuel consumption, default emission factors from Decision 2626/QĐ-BTNMT were used These value stem from the Tier 1 emissions factors from the 2019 Refinements to the 2006 IPCC Guidelines for National GHG Inventories Thus, these values are considered constant and will remain the same till
2050 Table 3.4 summarizes the emission factors used for BAU emissions projection
Table 3.4: Emission factors assumption for BAU projection
Based on the collected data and assumption for emission factors, the projected emissions for the BAU scenario in 2024 – 2050 period was calculated as in Table 3.5
Table 3.5: Projection of BAU emissions
Year Retail activities Transportation activities Total projected emission (tCO 2 e)
Figure 3.2: Projected BAU emissions for retails activities of the case study company
Figure 3.3:Projected BAU emissions for transportation activities
Source: Calculated by the author
Projected BAU emissions for retails activities
Stationary diesel oil A95 Gasoline for vehicles Refrigerants Grid electricity
Projected BAU emissions for transportation activities
Source: Calculated by the author
Figure 3.5: Contribution of emission sources in BAU scenario in 2050
Projected BAU emissions for the case study
Stationary diesel oil A95 Gasoline for vehicles Refrigerants
Grid electricity Diesel oil for vehicle
GHG reduction quantification
Oil and gas transportation companies are implementing a range of measures to reduce their emissions, focusing on both technological advancements and operational improvements The desk study has revealed the best practices by industrial peers, including improving operation efficiency (route optimization…), adopting alternate vehicles, investing in renewable energy, and CCS These measures are also in line with the development pathway and strategies of Vietnam NCCS
For the case study, a number of mitigation measures have been consulted with the company, including Applying Energy efficiency measures, Optimizing delivery Route, Switching to alternative vehicles and Using Renewable energy
Within organizations, the major energy end-uses in buildings are HVAC systems, lighting, appliances and equipment, and water heating HVAC systems are typically the largest energy consumer, maintaining air quality and comfortable indoor temperatures and accounting for about 40-60% of a building’s total energy use, with lighting as the second-largest end-use The remaining energy consumption comes from equipment and appliances, and in the studied company, fuel pumps in retail stores also contribute to overall energy use.
A range of energy efficiency measures can be implemented to reduce energy consumption and the associated GHG emissions Implementing Building Management Systems (BMS), also known as Building Automation Systems (BAS), provides a centralized platform to control and monitor various building systems, including HVAC, lighting, energy, fire, and security (SME Climate Hub, n.d.) A well-implemented BMS can optimize building performance, enhance occupant comfort, and drive down energy costs through integrated control and monitoring (CIM.io, n.d.), resulting in a reduction of GHG emission of up to 29% (BrainBox AI, n.d.) On the other hand, using energy efficient HVAC system or LED lights can lead to 40% to 75% improvement in energy efficiency compared to baseline technology such as incandescent bulbs (PlanA.Earth, n.d.)
In this case study, consultation with staff of the company revealed that in the baseline year 2023, the company had already used energy efficient equipment such as LED or air conditioning with inverter technology Thus, the potential for energy efficiency measures is not significant, estimating about 2% - 5% improvement annually The emission reduction potential of energy efficiency measures is presented in Table 3.6 Table 3.6: Emission reduction though energy efficiency vs BAU emissions
*From 2041, it is assumed that renewable energy measure reaches 100% capacity, resulting in zero emissions for electricity consumption Thus, energy efficiency measures do not directly reduce any emissions However, this measure would still reduce the overall electricity consumption
Although the GHG reduction potential is not substantial, these measures are cost- effective as it reduces energy consumption For example, an upstream Texas oil and gas company that achieved a 28% reduction in electricity expenditures (roughly 350,000 USD) by implementing AI-driven energy management solutions (Arcus Power, n.d.) Thus, it is worth applying these energy efficiency measures as they are still beneficial for the company However, energy efficiency measures still require initial investment in energy efficient equipment or BMS system One source indicates an average cost to deploy a basic BEMS of €20 to €30 per square meter (WBCSD, n.d.) For the case study company, the energy efficiency measures would cost around 15,000 to 22,000 USD
Route optimization emerges as a powerful strategic approach, offering the potential to significantly reduce fuel consumption and enhance the overall efficiency of fleet operations Route optimization software achieves this by analyzing a multitude of variables, including real-time traffic conditions, road closures, delivery schedules, and vehicle capacities, to design the most fuel-efficient travel paths for a fleet (SafetyCulture, n.d.) Route optimization is also recognized as a valuable tool in the oil and gas industry for enhancing efficiency and reducing operational costs (NextBillion.ai, n.d.)
Route optimization software reports indicate that implementing this measure can cut fuel consumption in a commercial truck fleet by approximately 15% to 30%, leading to lower operational costs and reduced greenhouse gas (GHG) emissions (Ridecell, 2024; Dispatch).
In 2024, the case study company has not applied route optimization before the baseline year 2023, indicating a high potential to reduce fuel consumption and greenhouse gas (GHG) emissions from its truck fleets The emissions reduction potential of route optimization is presented in Table 3.7.
Table 3.7: Emission reduction though route optimization vs BAU emissions
Even though these options can save the operation cost, route optimization tools or software usually come at a premium For the fleet of around 300 trucks, the estimate annual subscription fees could range from 15,000 to over 200,000 USD There are established route optimization software providers, thus this measure can be implemented in the near future In addition, it is important to invest in robust software, in combination with capacity building for truck drivers to take full advantage of this mitigation measure
Emissions from the combustion engines of a company’s truck fleet account for about 98% of total emissions, making switching to alternative vehicles and fuels a critical step toward carbon neutrality For commercial fleets such as oil and gas tanker trucks, viable low-emission options include electric trucks, hydrogen-powered trucks, and biodiesel tankers, enabling companies to reduce greenhouse gases and advance sustainable logistics.
Electric truck technology is advancing, with various manufacturers developing heavy- duty electric vehicles suitable for freight and potentially fuel transport (Huong &
Posada, 2022) Electric tank trucks have significant potential for reducing GHG emissions compared to their diesel counterparts Studies indicate that battery electric trucks can emit 63% to over 90% less GHG over their lifecycle, especially when powered by electricity generated from renewable sources (Heinrich, n.d.) The initial purchase cost of electric trucks, including heavy-duty variants, is generally higher than that of comparable diesel trucks (Pandya, 2025) Some reports suggest that electric trucks can cost two to four times more than diesel equivalents upfront (Thunder Said Energy, 2020) However, research indicates that the total cost of ownership (TCO) of electric trucks can become competitive with diesel over a five to seven-year period due to lower fuel and maintenance costs, especially with potential tax credits and declining battery prices (Pandya, 2025)
Hydrogen fuel cell technology for heavy-duty trucks is under development and has shown promise for long-range, zero-emission transportation Hydrogen fuel cell trucks have the potential for significant GHG emission reductions, with zero tailpipe emissions However, similar to electric vehicles, the emissions level is dependent on the source of hydrogen If hydrogen is produced from renewable energy sources, it can lead to an 85% to 89% reduction in GHG emissions compared to diesel, while fossil-based hydrogen can only reduce GHG emissions ranging from 15% to 33% (O’Connell et al., 2023) Similar to electric trucks, investment in hydrogen transportation is significant It is estimated that they can cost two to four times as much as a diesel truck (Thunder Said Energy, 2020) While costs are expected to decrease with increased production and technological advancements (Buysse, 2022), the current high upfront investment remains a significant barrier The cost for an electric HDV truck is around 273,000 EUR, compared to 117,000 EUR for a diesel HDV truck(The Association of European Vehicle Logistics, 2022) For the case study company, replacement of all 267 trucks would require a massive investment of 72,891,000 EUR or 82,866,200 USD However, the truck should be replaced in phases at the end of the lifetime of the existing trucks, thus the investment is gradual and more feasible
Lastly, the truck fleet can be powered by biodiesel as an alternative renewable fuel often blends with traditional diesel to reduce emissions Biodiesel can offers a significant reduction in GHG emissions compared to petroleum diesel, with lifecycle reductions ranging from 40% to 86% depending on the feedstock and blend (Xu et al., 2022) Since biodiesel can be used by existing trucks, the cost for this can be competitive However, the readiness to produce high concentrations of biodiesel such as B20 or B100 might be limited in Vietnam
Overall, the alternative options for diesel truck fleet are summarized in Table 3.8 Table 3.8: Alternatives options for reducing GHG emissions for diesel truck
Features Diesel Electric Hydrogen Biodiesel
Purchase Cost Baseline 2-4x higher 2-4x higher Similar
High Low Very Low Medium
*Dependent on the carbon intensity of the electricity grid
**Dependent on the production method and blend
Building carbon neutral management plan
After GHG quantification and GHG emissions reduction assessment, the BAU emissions and suitable mitigation measures were established The cost savings and readily available measures (such as energy efficiency and renewable energy) will be prioritized to implement first, while the costly measures will be gradually implemented from 2024 till 2050 as the cost for these are expected to drop in the future
From this assessment, two scenarios were established representing a high (optimistic) and low (pessimistic) case (Figure 3.8) In the high scenario (Figure 3.6), the mitigation measures achieved a high estimate of reduction level, assuming that the company had sufficient resources to implement them The projected scenario envisions the complete electrification of the company's vehicle fleet by 2050, resulting in a substantial emission reduction potential of 90% This transition will be implemented through the phased replacement of existing diesel vehicles with electric vehicles upon reaching the end of their service life, ultimately culminating in a fully electric fleet by the designated timeframe In addition, the other measures such as route optimization and energy efficiency also reach their high estimate of emission reduction potential of 30% and 5% respectively Route optimization software shall be applied to 10% of the vehicle fleet by
2025, then increase 5% annually till full implementation by 2042 The total reduction of this plan reaches 93% of the BAU emissions in 2050, and only 7% of the total emissions need to be offset by carbon credits
Figure 3.6: Carbon neutral pathway high scenario
In order to achieve this pathway, significant investment is necessary, especially in upgrading the vehicle fleets Based on the current cost of vehicles, the company will need to invest roughly 7 billion VND per new vehicle (The Association of European Vehicle Logistics, 2022), totaling 2.1 thousand billion VND for 300 vehicle fleet in the
2024 to 2050 periods to reduce its emissions In addition, around 3,000 tCO2e in 2050 and onward will need to be offset by carbon credits
In the low scenario depicted in Figure 3.7, the company faces challenges implementing mitigation measures, resulting in a less effective emission reduction Although the vehicle fleet shifts to a mix of electric and biofuel vehicles, decarbonization does not reach high levels Route optimization and energy efficiency contribute smaller savings, with estimated reductions of 15% and 2% respectively The mitigation plan’s structure mirrors the high scenario, but its impact is reduced in practice Consequently, only 69% of business-as-usual (BAU) emissions are mitigated, leaving 31%—approximately 12,600 tCO2e—to be offset by purchasing carbon credits.
Figure 3.7: Carbon neutral pathway low scenario
Figure 3.8: Carbon neutral pathways of the case study
Under this scenario, achieving the targeted emissions reduction requires a relatively modest investment of about 1.5 trillion VND, assuming that 70% of the fleet is replaced with electric vehicles By 2050 and beyond, the company will also need to offset approximately 12,600 tCO2e.
These pathways also provide interim targets, which are useful for tracking the progress of the carbon neutral plan For the high scenario, the near-term target is to reduce 44% of emissions compared to the BAU scenarios by 2030 For the low scenario, the near- term target is to reduce 30% of emissions compared to the BAU scenarios by 2030, reflecting lower levels of reduction The company can compare the actual emissions with these interim targets to correspondingly updates the mitigation actions implementation to ensure the carbon neutral plan is on track
Table 3.12: Contribution of mitigation measures in carbon neutral achievement
Contribution to carbon neutral in High scenario in 2050
Contribution to carbon neutral in Low scenario in 2050
Table 3.12 and Figure 3.9 illustrate the varying contributions of different mitigation measures towards achieving carbon neutrality by 2050, under both 'High' and 'Low' scenarios Notably, the adoption of new vehicles emerges as the most impactful factor in both scenarios, contributing substantially to carbon neutrality (89.51% in the High scenario and 62.66% in the Low scenario) This highlights the critical role of transitioning to cleaner vehicle technologies Route optimization plays a moderate role, with its contribution slightly higher in the Low scenario (5.52%) compared to the High scenario (2.98%) Renewable energy contributes a small but consistent amount (