Viet Nam

Viet Nam is highly vulnerable to the impacts of climate change, yet its fast growing economy is dominated by fossil fuels, a trend that continues into its future climate policy plans. We rate Viet Nam’s Paris Agreement NDC target as “Critically insufficient”. Its current policies, while on track to overachieve its conditional NDC target, are “Highly insufficient” in reaching a “fair” approach to climate policy in line with the Paris Agreement 1.5˚C limit that is of critical importance for the nation.

If it were to abandon plans for substantial coal-fired power generation in favour of a shift to renewable energy, Viet Nam could become a leader in South East Asia. This would also bring it into line with the objectives of the Climate Vulnerable Forum, of which it is a member. It could achieve significant benefits for sustainable development, in particular through transitioning to renewable energy while addressing the increase in energy demand through industrialisation and urbanisation. It could build on successfully delivering universal electrification for a growing population as well as on a range of policies to support expansion of renewable energy.

Viet Nam’s increasing electricity demand has resulted in its huge coal expansion plans. Coal currently represents 34% of electricity generation, but by 2030 coal is targeted to take up over a 50% share. These plans are at odds with the Paris Agreement. If they go ahead, they will lock Viet Nam into a fossil fuel intensive future. Its planned share of having two thirds of power generation from fossil fuels by 2030 are likely to result in stranded assets, especially given the need for the global phase-out of coal by 2040, including in Viet Nam and to reach a share of decarbonised electricity generation of 50% by 2030 in the ASEAN region.

Agriculture contributes a large share of more than a quarter (28%) of Viet Nam’s greenhouse gas (GHG) emissions and there are several programmes in place to reduce emissions in this sector.

The industry sector has the largest energy demand, accounting for 55% of energy consumption. The policies for this sector include green growth plans, energy efficiency and reducing cement emissions. However, emissions from industrial processes (mainly cement but also steel and ammonia production) are not yet included in the country’s NDC target, even though they represent a 13% of share of its 2014 emissions (excluding LULUCF), and are growing faster than energy-related emissions. This creates uncertainty when assessing the NDC.

Viet Nam’s unconditional target is to reduce its GHG emissions by 8% by 2030 and its conditional NDC target is to reduce GHG emission by 25% by 2030 below a business as usual scenario of 787 MtCO₂e incl. emissions from LULUCF and excluding industrial process emissions. This is equivalent to 234% (unconditional) and 200% (conditional) above 2010 levels (excluding LULUCF, including industrial processes).

Viet Nam also has an unconditional target to reduce its greenhouse gas emissions intensity by 20% and a conditional target of 30% by 2030 below 2010. This is equivalent to 217% (unconditional) and 196% (conditional) above 2010 levels (excluding LULUCF, and including industrial processes).

Viet Nam’s Paris Agreement commitment has a specific forestry target to achieve a 45% forest cover by 2030 - and government sources indicate its forests already cover 41%.

Viet Nam is currently revising its NDC, and plans to improve it by 2020, including covering all emissions. It has significant potential to increase its ambition, not just of its targets but for its current policy pathway.

If we were to recalculate Viet Nam’s unconditional emissions reduction pledge based on current policies, it would be an increase in ambition from 919 MtCO₂e/yr to 542 MtCO₂e/yr by 2030 (excluding LULUCF, including industry). This would be rated ‘Highly insufficient”. If we were to translate these emission levels to the language of Vietnam’s pledge (and include industrial processes, as planned in the update), this would be a reduction of 46% below business as usual levels by 2030 (including LULUCF and industry). In updating its NDC, Viet Nam will need to go beyond this level in order for it to be a true progression in scaling up climate action. 

For full details see pledges and targets section.

Viet Nam intends to meet its NDC predominantly with the energy and LULUCF sector (Viet Nam Government 2015). In 2017, LULUCF was a sink of 38 MtCO₂e and Viet Nam plans to increase the sink by 50% compared to the BAU sink level of 45 MtCO₂e in 2030. However, we do not include the forestry sector in our rating, as it is difficult to analyse it with effort sharing approaches (due to data uncertainty and dependency on country-specific circumstances). See the explanation why the CAT NDC ratings don’t include LULUCF.

Based on this target, we rate Viet Nam “Critically insufficient”.

The latest data shows the energy sector represents 53% of GHG emissions (excluding LULUCF) and it is a critical sector that needs to decarbonise. Viet Nam has shown effective leadership in meeting its 100% electrification target. This strength in leadership needs to be applied to decarbonising the energy sector which currently relies heavily on fossil fuels.

Key policies related to climate change include the Law on Energy Efficiency and Conservation and the National Energy Efficiency Program (NEEP3) for 2019-2030. Viet Nam developed a National Climate Change Strategy in 2011, with projects focused on 2011 to 2015, and objectives to 2050.

The Viet Nam Green Growth Strategy (VGGS) released in 2012, has GHG reduction targets and aims to reduce fossil fuels and increase renewables. The VGGS has a target of reducing emissions from energy activities by 10% to 20% by 2020 and 20% to 30% by 2030. The higher values of the targets are conditional on international support. The Renewable Energy Development Strategy (REDS) set renewable energy targets, which are reflected in the Revised Power Development Plan 7 (PDP7). These targets are backed up with policies such as the solar (now expired) and wind (current) feed-in-tariff.

The revised PDP7 is represented in our current policy scenario. It relies heavily on fossil fuels, (more than 50% of coal - up from the current level of about a third) planned for electricity generation by 2030, and only a share of 23% for renewable energy (including 12% for hydro power which currently represents 45% of the electricity generation mix). The current policy pathway is not in line with the Paris Agreement, and risks the creation of large stranded assets, given the need to phase out coal for power generation by 2040 and to reach a share of decarbonised electricity generation of 50% by 2030 in the ASEAN region.

According to our analysis, Viet Nam will meet its unconditional and conditional proposed targets with currently implemented policies, as the targets are unambitious and allow for a steep incline in emissions to 2030.

The current policy pathway is estimated to overachieve the unconditional targets by 38% to 41% and the conditional targets by 33% to 34% in 2030. Viet Nam has significant potential to create ambitious targets to go beyond the current policy pathway. Viet Nam’s climate policy is particularly important given its vulnerability to climate change. Climate policy can help achieve sustainable development and address energy security issues, particularly through transitioning to renewable energy to meet the domestic energy demand.

The government has developed some policies in place to reduce emissions in the agriculture sector - with a share of 28% (excl. LULUCF). For the industry sector, it has developed policies around energy efficiency, green growth, and cement emissions reduction. There is a national action plan for the forestry sector, and the NDC specifically targets this sector to increase forest cover to 45%.

For full details see current policy projections section