Vietnam’s National Energy Master Plan: Key Takeaways

The Vietnamese government has approved the National Energy Master Plan (NEMP) for the 2021-2030 period, with a vision to 2050. Here are the key takeaways.

Officially approved via Decision Number 893/ QD-TTg, the NEMP lays out the foundations for the Vietnamese energy sector broadly. This includes oil and gas, coal, electricity, and renewable energy. It also covers tasks including exploration, exploitation, production, storage, and distribution.

Key objectives/targets in the National Energy Master Plan

Broadly, the NEMP aims to ensure national energy security, reduce carbon emissions in order to meet Vietnam’s ‘net-zero by 2050’ commitment, and ensure the energy industry is independent and self-sufficient.

The plan aims to create a situation whereby Vietnam produces enough energy to feed an economy growing at 7 percent per annum between now and 2030 and 6.5 to 7.5 percent between 2031 and 2050.

The NEMP plan estimates that Vietnam’s total energy demand is expected to hit 107 million tonnes of oil equivalent by 2030 and 165 to 184 million tonnes of oil equivalent by 2050.

Vietnam intends to ensure its energy supply is in excess of these estimates, aiming to have an energy supply equivalent of 155 million tonnes of oil by 2030 and 294 million to 311 million tonnes of oil equivalent by 2050.

Oil and petroleum

• Petroleum reserves are to increase between now and 2030 by 16 to 22 million tonnes of oil equivalent per year and 16 to 27 million tonnes of oil equivalent each year by 2050.
• Vietnam’s petroleum reserve to reach 75 to 80 days of net imports by 2030. After 2030, a broad goal is set to gradually increase reserves to 90 days of net imports.
• Domestic petroleum production should meet at least 70 percent of domestic demand.
• Crude oil production is to reach 6 to 9.5 million tonnes annually by 2030 and 7 to 9 million tonnes a year from 2031 to 2050.

Natural gas

• Natural gas production is expected to reach 5.5 to 15 billion m³ each year by 2030. From 2031 to 2050 that number is expected to reach 10 to 15 billion m³ each year.
• Increase the import capacity for liquefied natural gas to between 15.7 to 18.2 billion m³ by 2030 and about 10.6 to 12.2 billion m³ by 2050.

Coal

• Coal mining is to reach an output of about 41 to 47 million tonnes of commercial coal each year by 2030. This number is set to decrease to about 39 million tonnes by 2045, and about 33 million tonnes by 2050.
• Around 328 thousand meters drilled in the Northeast Coal Basin, and about 102 to 131 thousand meters drilled in inland coal mines by 2030.
• From 2031 to 2050 to reach between 773 to 943 thousand meters drilled in the Northeast Coal Basin, and about 7 to 10 thousand meters drilled in local coal mines.
• Produce about 46 to 53 million tonnes of raw coal (excluding peat) each year, equivalent to about 41 to 47 million tonnes of commercial coal by 2030.
• From 2031 to 2050 for raw coal output to gradually decrease from 53 million tonnes in 2030 to about 44 million tonnes in 2045, and to about 36 million tonnes by 2050.
• Put into operation a test mine in the Red River Coal Basin before 2040 and proceed to industrial-scale mining by 2050 (if the test is successful).
• Build a new sieve factory with a capacity of about 1.5 million tonnes a year in Uong Bi to improve its coal screening and processing capacity by about 4 to 5 million tonnes a year.
• Expand and raise the capacity of coal screening in Hon Gai to about 5 million tonnes a year.
• The proportion of coal that undergoes screening and concentrated processing to reach about 60 to 65 percent.

Coal imports and exports

• Vietnam’s coal imports will reach 73 million tonnes by 2030, of which about 44 million tonnes will be earmarked for thermal power plants.
• Coal imports are expected to increase and peak at about 85 million tonnes in 2035, then gradually decrease to about 50 million tonnes by 2045.
• By 2050 Vietnam should no longer be importing coal.
• Up to 2030 Vietnam expects to export high-quality coal in the vicinity of 2 to 3 million tonnes per year.

Renewables

At the 26th Conference of Parties (COP26) in Glasgow in 2021, Vietnam committed to reaching net-zero carbon emissions by 2050. With this in mind, the NEMP sets out the following goals:

• Renewable energy will account for 15 to 20 percent of Vietnam’s power supply by 2030 and about 80 to 85 percent by 2050. (Note: the Power Development Plan 8 estimates about 48 percent of Vietnam’s power supply will come from renewables by 2030).
• Greenhouse gas emissions will peak at 399 to 449 million tonnes in 2030, coming down to about 101 million tonnes by 2050. This is in line with a target to reduce greenhouse gas emissions by between 17 to 26 percent by 2030 and about 90 percent by 2050. The NEMP, however, notes that this is on the proviso that commitments made under JETP are fully realized.
• Green hydrogen production will reach between 100 to 200 thousand tonnes annually by 2030 and 10 to 20 million tonnes a year by 2050.
• Renewables are to account for about 30.9 to 39.2 percent of Vietnam’s electricity supply by 2030, with a stretch target of 47 percent if international finance commitments in the JETP are realized. Renewable energy by 2050 is expected to reach 67.5 to 71.5 percent.
• By 2030, electricity exports should be scaled-up to about 5,000 to 10,000 MW.
• Total renewable energy sources for heat production and co-generation of thermal power in 2030 will be about 8 to 9 million tonnes of oil equivalent, and about 17 to 19 million tonnes of oil equivalent by 2050.
• To increase the absorption area of ​​solar hot water rigs in commercial, service, civil, and industrial production, providing about 3.1 million tonnes of oil equivalent by 2030 and about 6 million tonnes of oil equivalent by 2050.
• The use of biofuels is to reach about 0.28 million tonnes of oil equivalent by 2030 and 13 million tonnes of oil equivalent by 2050.
• Biogas is expected to be about 60 million m³ by 2030 and about 100 million m³ by 2050.
• Increase the yield of hydrogen produced through electrolysis and other processes that capture carbon to 100 to 200 thousand tonnes by 2030 and about 10 to 20 million tonnes by 2050.
• Increase the production of synthetic fuels aiming for 2 to 3 million tonnes by 2050.
• Expand carbon capture, use, and storage solutions in industrial production facilities and power plants to achieve a capture capacity of about 1 million tonnes by 2040 with the aim of reaching 3 to 6 million tonnes by 2050.

Demand for foreign capital

To achieve these goals, it is estimated that Vietnam will need up to VND 4,808 trillion (US$203 million) in investment capital between 2021 and 2030. It will also need up to a further VND 14,590 trillion (US$615 million) between 2031 and 2050 for a total of VND 19,398 trillion (US$818 million).

To meet these requirements, Vietnam will be looking for capital investment in a broad range of energy projects and foreign financing may be key. Energy projects, however, do often run into challenges in Vietnam, and firms looking to enter the market should consult boots-on-the-ground experts like the team at Dezan Shira and Associates for the most up-to-date and accurate advice.

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