Viet Nam

At COP26, Viet Nam pledged to reach net zero emissions by 2050 and, in November 2022 at COP27, submitted its updated NDC target. The updated NDC claims to be aligned with the commitments Viet Nam made at COP26, but it is not a true progression in scaling up climate action. Grid integration of renewables and coal phase-out from the power sector remain critical issues for the country’s energy transition. Viet Nam’s large coal pipeline is at odds with its pledges to phase out unabated coal from the power sector in the 2040s to reach net zero emissions by 2050, and the recent rapid development of RE installations.

While the targets are stronger than the previous NDC on paper, Viet Nam will easily be able to achieve them with its current level of climate action, and the new targets will not drive further emission reductions. Viet Nam’s overall CAT rating therefore remains unchanged at “Critically insufficient”.

There is some improvement in the updated NDC, which now transparently provides detailed sectoral financial requirements and implementation plans to achieve those targets.

In December 2022, Viet Nam joined the Just Energy Transition Partnership, under which it will receive USD 15.5 bn from a group of donor countries. Key elements of the agreement include the peaking of power sector emissions in Viet Nam at 170 MtCO₂ in 2030 and a share of 45% of renewable energy generation by then. These targets enhance previous plans and, according to our preliminary assessment, exceed the level of ambition of our current policies scenario. The agreement also includes a biennial revision of the targets to increase their ambition. With this agreement in place, Viet Nam could strengthen at least its conditional NDC target.

In July 2022, Viet Nam’s net zero pledge was enshrined in law and supported by its National Climate Change Strategy to 2050, which includes sector-specific reduction targets and broad priority areas. While the adoption of the National Climate Change Strategy to 2050 is an important step for guiding Viet Nam’s climate action, more detailed plans and policies are needed at the sectoral level to achieve net zero emissions by 2050.

The Eighth Power Development Plan (PDP8), which was supposed to be issued in 2021, is still under revision and will be critical to Viet Nam’s energy transition. The latest version of the draft significantly scales down coal capacity (from 46% in 2021 to 9.5% in 2045), increases renewable energy plans, and ramps up fossil gas.

In recent years, Viet Nam has added significant solar capacity to the grid, which accounted for 10% of electricity generation in 2021 compared to less than 1% in 2015. In the same year, the share of all renewables reached 43% of generation, owing to a high share of hydro (31%). However, the recent renewables boom has highlights the need for infrastructural development, including improved transmission network and energy storage, to ensure stable supply.

At COP26, Viet Nam signed the global pledge to phase out unabated coal-fired power generation and stop construction of new plants. Viet Nam has also adopted plans to not develop new coal-fired power plants after 2030 and gradually reduce its coal fleet after 2035. However, Viet Nam’s coal capacity grew by around 57% between 2014 and 2021. Viet Nam has a further 15.6 GW coal capacity in the pipeline – 7.4 GW under construction and 8.3 GW at pre-construction level. This is the fourth largest coal pipeline in the world, after China, India, and Indonesia, even after cancelling projects with a total of 45 GW capacity between 2010-2022 mainly because they were not financially viable.

The latest version of draft PDP8 suggests that 24 GW of new LNG capacity through 22 LNG-fired power plants will be constructed by 2030 and an additional 34 GW will be operationalised by 2045. This expansion of gas capacity will lead to an increase in LNG imports and, to support that, Viet Nam is also expanding its LNG infrastructure. In 1.5°C scenarios, fossil gas in the power sector phases out at the latest by 2045, and large-scale investments in fossil gas infrastructure today are at risk of becoming stranded assets or causing a lock-in that will endanger the 1.5°C temperature limit. Transporting large amounts of fossil gas also leads to more methane emissions, potentially at odds with the Global Methane Pledge which Viet Nam signed up to.

The CAT rates Viet Nam’s climate targets and policies as “Critically insufficient”. The “Critically insufficient” rating indicates that Viet Nam’s climate policies and commitments are not consistent with the Paris Agreement’s 1.5°C temperature limit.

Viet Nam updated its NDC targets in 2022 without increasing ambition. Its updated NDC strengthened its targets on paper, but will not drive real world emission reductions beyond its current level of climate action. The CAT rates these updated targets as “Critically insufficient” against both modelled domestic pathways and what a fair contribution for Viet Nam would be. Viet Nam’s current policies result in emissions levels lower than its targets, but are still “Critically insufficient”. The “Critically insufficient rating is consistent with more than 4°C of warming. Viet Nam needs to set more ambitious targets for emissions reductions and implement the associated policies to get a better rating.

The CAT rates Viet Nam’s climate policies and action as “Critically insufficient” when compared to its fair share contribution. Under Viet Nam’s current policies and action, emissions will continue to rise to around 603-692 MtCO₂e (excluding LULUCF) in 2030 and are consistent with more than 4°C warming. Under a fair contribution for 1.5°C, emissions would roughly stabilise at today’s level, at about 350 MtCO₂e in 2030.

In July 2022, the Viet Nam government enacted the National Climate Change Strategy to 2050 which is an important step towards achieving Viet Nam’s net zero emissions commitment by 2050. According to the strategy, by 2030, total GHG emissions will decrease by 43.5% compared to the business-as-usual scenario, which also includes reduction targets at the sectoral level.

Viet Nam is currently developing its Power Development Plan 8 (PDP8). The energy sector represents over 60% of its emissions, with the largest share from the power sector. Though there is decline in coal capacity, the draft PDP8 remains focused on fossil fuel for baseload power as it plans to switch from coal to natural gas, and it is at odds with global and regional decarbonisation trends. The latest draft proposes a 50.7% share of wind and solar power in 2045.

In January 2022, a new Law on Environmental Protection took effect. The law includes more detailed regulations for environmental impact assessments, introduces a domestic carbon market and allows for a carbon tax which will impact the industry sector. Details of the carbon market are still under development.

Regulatory developments have been limited in recent years - under its current policies and action, Viet Nam’s emissions (excluding LULUCF) will see a 118-150% increase from 2010 levels.

The full policies and action analysis can be found here.

We rate Viet Nam’s 2030 conditional target against a 1.5°C modelled domestic pathway as “Critically insufficient”. Viet Nam’s conditional target equates to 620 MtCO₂e by 2030 (excluding LULUCF). Viet Nam will likely achieve this target without any additional effort beyond current policies and action, which we estimated to be 603-692 MtCO₂e by 2030. With the help of international support, Viet Nam would need to reduce the emissions level of the current policies and actions trajectory to 210 MtCO₂e by 2030 (65-70% reduction), to be in line with 1.5°C. Substantial improvement is needed in this target and Viet Nam will need international support to get onto a 1.5°C pathway.

Viet Nam’s unconditional target equates to 863 MtCO₂e by 2030 (excluding LULUCF), which we rate as “Critically insufficient”. Viet Nam will achieve this target without any additional effort beyond current policies and action. Viet Nam would need to reduce the current policies and action pathway by 42-49% (to 350 MtCO₂e) to be in line with a 1.5°C fair share pathway.

Viet Nam updated its Paris Agreement target in November 2022. The target was 39 MtCO₂e (excluding LULUCF) stronger than the previous NDC, and the transparency and sectoral coverage has improved. Yet, the target does not drive real climate action as it will be easily overachieved with current policies and action. Both Viet Nam’s NDC targets are consistent with a warming of over 4°C: if all countries were to follow Viet Nam’s approach, warming would exceed 4°C.

Viet Nam announced a target to achieve net zero by 2050 during the COP26 World Leaders' Summit in 2021. In July 2022, Viet Nam enshrined its net zero target into law, and also developed a National Climate Change Strategy to guide its planning to achieve net zero by 2050. Viet Nam’s net zero target is conditional on international financial support. The net zero target covers most of the ten key elements of a good net zero target design, and so CAT rates Viet Nam’s target as “Acceptable”.

The full net zero target analysis can be found here.