VIETNAM: TO HONOR ITS INTERNATIONAL COMMITMENTS WITH RECIPROCITY TOWARDS CLIMATE CHANGE AND A CLEAR PATH FOR JETP

Overview

Earlier, on 15 May 2023, the Deputy Prime Minister Tran Hong Ha initialed on the Decision No. 500/QD-TTg, documenting the roadmap for Vietnam’s national electricity development for the period from 2021 – 2030, with a vision to 2050 (PDP-8).

Following the release of PDP-8 the Ministry of Industry and Trade (MoIT) submitted Report No. 4225/TTr-BCT dated 3 July 2023 on the National Energy Master Plan. The stakeholders opinions were called upon by the government and with internal alignment the Deputy Prime Minister Tran Hong Ha inked the Decision No. 893/QA-TTg dated 26 July 2023, laying down the National Energy Master Plan for the period 2021-2030, with a vision to 2050 (NEMP).

NEMP covers a number of key areas such as, oil and gas, coal, electricity, new and renewable energy with a streamlined planning ranging from basic research, exploitation, exploration, production, storage, distribution etc.

Strategic emphasis is given to ensure energy security with socio-economic advancement paralleled with a focus on sustainable development to build a self-reliant economy. NEMP stresses on exploiting domestic energy sources combined with reasonable import-export.

Green growth objectives and expectations

NEMP is in line with Vietnam’s COP commitments to combat climate change by meeting net zero target by 2050. It relies on developing the country’s energy ecosystem with a mix having renewable energy at around 15 - 20% by 2030 and 80 - 85% in 2050 and new energy sources with a capacity of green hydrogen production to be around 100,000 - 200,000 tons annually by 2030, aimed at 10 - 20 million tons annually by 2050 are welcomed on board while the entire region sails to reduce their carbon footprints.

SE Asia leading economy aims for a tag of clean energy hub and energy exporter in the region while at the same time it foresee to engage in equipment manufacturing, oil and gas processing, construction, installation services nationwide.

Speculations those are shaped up as targets where the estimated growth stands at 7% for annual GDP in the period 2021-2030 and maintaining the momentum at 6.5% - 7.5% in the span of 2031-2050.

Growth requires power and it is clear under the PDP-8 and the NEMP that the country’s electricity needs are ambitious with escalating investment and domestic advancement patterns. Numbers provide that total energy demand is 107 million tons of oil equivalent by 2030 and 165 – 184 million tons of oil equivalent by 2050. Whereas, the total primary energy is 155 million tons of oil equivalent by 2030 and 294 – 311 million tons of oil equivalent by 2050. While, energy saving parameters to be approx. 8 - 10% by 2030 and 15 - 20% by 2050.

On one hand, petroleum reserves are given an emphasis and a raise in the total national petroleum reserve (including crude oil) is planned to be 75 – 80 days of net import by 2030 with a gradual increase to 90 days by 2050. It is estimated that crude oil production should reach 6 - 9.5 million tons/year by 2030 and aim for 7 - 9 million tons/year by 2050. On the other hand, GHG emissions are approx. 399 - 449 million tons in 2030 and around 101 million tons in 2050. GHG emissions are critical to determine our shared planet’s future and thus, the NEMP aims to reduce GHG emissions by 17 - 26% by 2030 and around 90% by 2050, conditional to international partners honoring their commitments under Just Energy Transition Partnership (JETP). JETP acts as the main pillar to achieve the above stated targets, it goes hand-in-hand when we see that several geographical regions worldwide face limitations in terms of natural resources and Asia as a whole has been the leader in agro produce, manufacturing and exports for the inhabited regions to get adequate supplies to support human existence while ensuring a sustainable advancement for all with environment protection.

The world is undergoing fresh water crisis and although the technology is advanced to an extent that desalinization is a reality but the bag load comes with significant costs. In view of maintaining an ecological balance the NEMP provides for effectively exploiting and utilizing water resources.

Further, natural gas production to reach 5.5 – 15 billion m3/year by 2030 and aim for 10-15 billion m3/year by 2050. In contrast, coal mining is around 41 - 47 million tons for commercial coal per year, to reach around 39 million tons by 2045, around 33 million tons by 2050. Pilot exploitation in Red River Basin is important to test and if successful, proceed ahead at the industrial-scale before 2050.

In order to drive the planning a robust infrastructure is indeed a necessity and the NEMP provides a planning basis for enhanced development of transportation system, including encouragement to EV in order to realize its goals.

No.	Requisites	Period	Figures
1.	Investment	2021 - 2050	VND 15,304 – VND 19,398 trillion (approx.) (approx. USD 645 billion – USD 822 billion)
		2021 – 2030	VND 4,133 – 4,808 trillion (approx.) (USD 175 billion – USD 203 billion, approx.)
		2031 – 2050	VND 11,170 – 14,590 trillion (approx.) (USD 473 billion – USD 618 billion approx.), subject to updates.
2.	Land Area	2021 – 2030	93,54 – 97,24 thousands ha
		2031 – 2050	171,41 – 196,76 thousands ha
3.	Sea Surface Area (Offshore)	by 2030	334,800 ha
		by 2050	1,302,000 – 1,701,900 ha

Renewable and New Energy

In relation to the generation capacities, development for renewable energy sources (RE) (including, hydro, onshore and offshore wind, solar, biomass…), new energy, clean energy (such as hydrogen, green ammonia…) with power system safety is pushed with a view to ensure reasonable electricity pricing and spotlight remains on off-grid rooftop solar power sources.

In terms of forecast, RE generation stays at 30.9 - 39.2% by 2030, could be 47% with strong support from international financing, technology and assistance in accordance with JETP. Vision for 2050 stands at 67.5 - 71.5% by 2050. Vietnam has taken a step further with a synchronized planning among the PDP-8 and NEMP and other National level planning, and it aims to form two (02) inter-regional RE industrial and service hubs including RE production, transmission and consumption; RE manufacturing, construction, installation and ancillary services nationwide by following the objectives stated above. RE and new energy export is aimed at 5,000 – 10,000 MW.

RE counters global warming, recently quoted as global boiling by the UN, by keeping business and planet cooler with a modern trend and RE technology using biomass, biogas and solar energy for heat production (HP) in industrial, commercial and residential areas shall be promoted. RE sources for HP and co-generation of thermal power to be around 8 - 9 million tons of oil equivalent by 2030 and aim for 17 - 19 million tons by 2050. NEMP further provides room for increasing the area of solar hot water rigs in commercial service, civil and industrial production to provide around 3.1 million tons of oil equivalent by 2030 and fixed at around 6 million tons by 2050.

Additionally, biofuels for use to be around 0.28 million tons of oil equivalent by 2030 and aim for 13 million tons by 2050. Biogas for construction volume to be around 60 million m3 by 2030 and aim for 100 million m3 by 2050.

In terms of new energy, Hydrogen poses itself as a promising stable fuel to ensure combustion in a greener way. Vietnam, although it is keeping an eye on hydrogen technology to be time tested by other countries, it did include it under the National planning to escalate scale of hydrogen produced through electrolysis and other processes that capture carbon. i.e. as noted above, to be around 100,000-200,000 tons annually by 2030, aim for 10-20 million tons annually by 2050. NEMP also support production of synthetic fuels with an aim to reach around 2-3 million tons by 2050.

Carbon footprints are aimed to be balanced and promotion of solutions to capture, use and store carbon in industrial production facilities and power plants reach the ability to seize around 1 million tons by 2040 and aim for 3-6 million tons by 2050.

Gas Industry with LNG in the club

Vietnam plans to develop an entire gas industry with synchronization among exploitation, collection, transportation, processing, storage, distribution and import-export of gas products with advanced measures and regional, international integration.

To ensure development of the gas industry an entire infrastructure overhaul is required for further development and it shall invite huge investments in gas treatment plant, pipeline for gas transportation from the said plant to thermal power centers, gas processing plants and industrial consumers. Even a new tangent is visible where the investment in offshore gas collection by connecting with current pipeline networks is encouraged. We will see construction of LNG terminals to support facilitate import of natural gas (LNG, CNG), seek import from Malaysia, Indonesia, Brunei,… through existing infrastructure.