Viet Nam

Viet Nam’s current policies and action are rated as “Critically insufficient” when compared to its fair share contribution. The “Critically insufficient” rating indicates that Viet Nam’s policies and action in 2030 reflect minimal to no action and are not at all consistent with the 1.5°C temperature limit. If all countries were to follow Viet Nam’s approach, warming would exceed 4°C.

Viet Nam’s emissions under current policies will reach around 686–722 MtCO₂e in 2030 (excl. LULUCF) whereas a 1.5˚C fair share pathway is 344 MtCO₂e in 2030.

Further information on how the CAT rates countries (against modelled domestic pathways and fair share) can be found here.

The CAT estimates that Viet Nam's emissions, excluding LULUCF, will range from 686–722 MtCO₂e in 2030 under current policies. This estimate reflects a reduction compared to our last assessment, mainly due to the updated PDP8 in 2025.

Although Viet Nam has adopted several cross-sectoral policies in recent years, emissions under current policy projections (CPP) are increasing in 2030, between 26–32% higher than in 2024. To be aligned with its fair share contribution, emissions in 2030 need to be around half of what is projected under current policies. This is because, aside from the updated PDP8, most newly announced or adopted policies are at the framework-level or await detailed implementing regulations and quantifiable parameters; therefore, they are not yet included in our CPP. In addition, the updated PDP8 assumes GDP growth of around 10% per year in 2026-2030; this higher macroeconomic trajectory (compared with IMF projections averaging ~5% over the same period) feeds through to stronger assumed industrial output and energy demand. With no strong industrial decarbonisation plan in place and the domestic emissions trading scheme at its pilot stage, this is substantially lifting the upper bound of the CPP.

The architecture of Viet Nam’s climate action framework to 2050 is articulated in the National Climate Change Strategy to 2050, setting the goal of reaching net zero by 2050. Since COP27, important policy documents covering the energy sector have emerged, including the long-awaited Power Development Plan 8 (PDP8) and the Master Plan for National Energy, building on the foundations of the Climate Change Strategy.

In May 2025, Viet Nam adopted the updated version of PDP8 (2025 PDP8), which is more ambitious and diversified than its predecessor. The strengthened coal phase-out and sharp scaling up of solar and offshore wind are welcome steps toward aligning with Viet Nam’s net-zero by 2050 pledge. However, the increased emphasis on nuclear and LNG raises critical concerns (see further details below in the Power sector section).

Earlier National Energy Development Strategy (Resolution no. 55) was issued to support renewable energy uptake and the law on Environmental Protection provided the legal framework for the domestic carbon market. Energy efficiency is addressed through the Viet Nam National Energy Efficiency Program 3 (2019-2030), with a legislated target of reducing total final energy consumption by 8–10% over 2019–2030, relative to BAU.

Viet Nam’s new Electricity Law (2024) which came into effect on 1 February 2025, marks a significant reform of the country’s energy sector. It replaces the earlier framework from 2004 (and subsequent amendments) with a much more comprehensive and ambitious legal foundation. The law sets out detailed provisions on electricity planning, project development, licensing, market competition, grid operations, pricing, and state oversight.

However, the law’s effectiveness will heavily depend on the speed and clarity of implementing regulations, particularly those affecting renewable energy incentives, emergency project management, and pricing frameworks.

Viet Nam’s Just Energy Transition Partnership (JETP), launched in 2022 with a USD 15.5 billion pledge from International Partners Group (IPG), is designed to accelerate its shift from coal to clean energy. Progress includes an implementation plan, a Resource Mobilisation Plan unveiled at COP28, and a pipeline of 24 projects, with USD 7 billion already mobilised for hydropower and transmission projects. The updated PDP8 and the New Electricity Law 2024 provide a stronger policy framework by prioritising renewables, offshore wind, and grid upgrades, while enabling clearer investment rules. And yet, disbursement remains slow, funding gaps persist, and inclusivity and transparency concerns remain.

Viet Nam is actively addressing its grid stability challenges and reviving solar installations through a series of policy reforms. The government has prioritised upgrading grid infrastructure to accommodate higher renewable energy penetration, including expanding transmission networks and improving grid management systems. New regulations are being introduced to ensure more efficient integration of solar power, while financial incentives and revised feed-in tariffs aim to encourage further solar investment. Additionally, the government is focusing on energy storage solutions and enhancing grid flexibility to prevent curtailment and support continued growth in solar capacity.

Viet Nam's energy landscape is undergoing a transformation as the country works towards reducing its reliance on coal. This includes the expansion of renewable energy sources, their integration into the energy grid, and a determined push to phase out coal power by 2050. Nevertheless, the government is considering fossil gas as a “transition fuel” and is actively working to expand fossil fuel import infrastructure. Rapid historical and planned growth in coal and gas imports pose energy security concerns.

In the transport sector Decision No. 1679/QD-BGTVT signifies a crucial step towards the integration of green energy measures in the transport sector, marking a significant move towards the execution of the Prime Minister's Action Programme on green energy transition and the reduction of carbon dioxide and methane emissions in transport (Decision 876/QĐ-TTg), steering the sector toward net-zero by 2050.

In the buildings sector, energy efficiency has been strengthened by the 2023–24 amendment to the Law on Energy Efficiency and Conservation. This expanded mandatory labelling and minimum performance standards to include construction materials, while introducing stronger requirements for energy audits, monitoring, and financing mechanisms.

Agriculture, a major source of methane emissions in the country, has also undergone a policy shift. The 2022 Methane Emissions Reduction Action Plan set quantified limits on emissions from cultivation and livestock. A Low-Emission Crop Production Plan launched in 2023 targets a 30% cut in methane from crops and a 10% cut in overall agricultural emissions by 2030 from 2020 level.

The waste sector has seen particularly notable reform. The 2022 Environmental Protection Law introduced mandatory waste sorting and extended producer responsibility (EPR). In early 2025, the government approved a National Action Plan for Implementing the Circular Economy until 2035, setting a long-term vision for reducing waste, increasing reuse and recycling, and improving resource efficiency across all sectors.

Domestic carbon market in development

Viet Nam is undertaking a significant step in its climate policy with the launch of a pilot emissions trading scheme (ETS) in August 2025. This development builds on earlier legislation (Decree 06/2022/ND-CP), which introduced emissions reporting obligations—and was formalised through Decision 232/QD-TTg in January 2025, followed by Decree 119/2025/ND-CP in June (Viet Nam Government 2025b). Together, these measures create the legal framework for Viet Nam’s first emissions trading scheme, which is central to its strategy for meeting its Nationally Determined Contribution and long-term net-zero by 2050 target.

The pilot ETS will initially cover the thermal power, cement, and iron and steel industries, sectors that together account for about half of Viet Nam’s total CO₂ emissions (Enerdata 2025). During the trial phase, companies will receive allowances free of charge, allocated according to production-based emissions intensity benchmarks (ICAP 2025). Importantly, firms will also be able to use carbon credits from domestic or international markets to offset up to 30% of their emissions obligations—a more generous threshold than earlier proposals, which limited offsets to 10–20% (S&P Global 2025).

While the pilot marks an important milestone, it also highlights the complexity of designing a functioning emissions trading scheme. A national registry for tracking allowances is being developed, along with a trading platform to facilitate transactions, but these systems are not yet fully operational. Moreover, oversight will involve multiple ministries, raising concerns about coordination and consistency in enforcement (Reccessary 2025b).

Moreover, the market is based on intensity-based benchmarks and that could limit the scheme’s effectiveness (Reccessary 2025b). If production in covered sectors continues to expand, companies may reduce emissions per unit of output while still increasing their total emissions. In addition, the decision to allocate most allowances for free means that the market may initially deliver limited short-term emissions cuts, with the emphasis instead on building institutional capacity and familiarising firms with trading mechanisms (Reuters 2025b).

The success of the pilot will therefore be critical: if it is able to establish robust institutions, improve data quality, and generate confidence among participants, it could evolve into a well-functioning instrument for Viet Nam’s low-carbon transition. If not, the risk is that it remains more of a capacity-building exercise than a driver of deep decarbonisation.

Large facilities in cement, steel, and ceramics are now required to prepare greenhouse gas inventories. These inventories serve as the foundation for Vietnam’s first emissions trading scheme.

Master Plan on National Energy (2021-2030)

The Master Plan on National Energy for the period 2021-2030 serves as a foundational framework for Viet Nam’s energy sector, aimed at meeting the country's development goals while meeting its net zero target by 2050 (Viet Nam Government, 2023b). It sets an energy-related GHG emissions target of 399–449 MtCO₂e by 2030, (51–73% above 2021 levels) and 101 MtCO₂e by 2050 (62% below 2021 levels) covering CO₂, CH₄ and N₂O.

The National Energy Plan places a significant emphasis on fossil fuels, with clean energy taking a back seat. The plan outlines targets for coal, fossil gas, and oil production. Domestic coal production will remain prominent until mid-century, while coal imports are projected to peak in 2035 before being phased out by 2050. The Energy Master Plan takes into account the production of alternative fuels through the establishment of targeted metrics for biofuels, biogas, synthetic fuels, and technology-neutral hydrogen production.

The Master Plan was developed prior to the updated PDP8 (2025), which later provided a more detailed roadmap for the power sector and its decarbonisation trajectory. Although the updated PDP8 also has emphasis on fossil fuels in short to mid-term.

In terms of carbon capture, utilisation, and storage (CCUS), the Master Plan lays out a more comprehensive plan for its expansion compared to the original PDP8. By 2040, the goal is to reach a capture capacity of 1 MtCO₂ through the implementation of this technology, with an eye towards potential future expansion to 3 to 6 MtCO₂ by 2050. The updated PDP8 projected LNG-to-power capacity with CCS is expected to reach about 2 GW by 2050.

The Master Plan on National Energy estimates capital investments for the energy sector at USD 630–813 bn for the period 2021–2050, including USD 173–202 bn for the period 2021–2030.

Viet Nam's power sector is a significant contributor to the country's total emissions, accounting for approximately 49% of total energy related emissions in 2023 (IEA 2025). This is driven largely by the reliance on fossil fuels, particularly coal, which accounts for 50% of total generation in 2024 (Ember 2025).

In recent years, electricity demand has been rising sharply, reflecting rapid industrialisation and urbanisation. Large hydro plays an important role in the electricity mix, providing around 29% of electricity generation in 2024 (Ember 2025). However, there has been significant uncertainty around hydro generation in recent times due to drought. While electricity generation from renewable energy sources, including solar and wind, is gradually increasing, these still only accounted for 13% of generation in 2024 (Ember 2025).

2025 update of Power Development Plan 8 (PDP8)

The long-awaited Power Development Plan 8 (PDP8), adopted in May 2023, sets out the planning of the power sector for the rest of the decade. The plan defines numerous targets for 2030 and 2050, taking into consideration Viet Nam's abundant renewable energy potential. In 2025, a further modification of 2023 version of the PDP8 adopted, represents a significant evolution in the country’s energy strategy, shifting priorities across coal, fossil gas, nuclear, and renewables while grappling with the dual imperatives of energy security and climate commitments.

The revision of PDP8 is designed with an annual GDP growth aligned with historical expansion of around 10% between 2026–2030 and 7.5% between 2031–2050, compared to 7% in the 2023 PDP8. This elevated growth trajectory drives much higher projected electricity demand, which in turn has influenced policy choices.

Viet Nam’s power sector is undergoing a transition, balancing rapid renewable growth with continued reliance on fossil fuels. Coal remains a central element of the energy mix: over 27 GW is currently in operation, and the government has a target of 31 GW for 2030, although the revised Power Development Plan (2025 PDP8) now commits to a full coal phase-out by 2050 (Viet Nam Government 2025a). This creates tension, given coal’s near-term dominance and rising import dependence.

In the revised PDP8 fossil gas, including LNG, is positioned as a strategic replacement, with capacity projected to grow to 33–37 GW by 2030 (16-18% of total installed capacity), though this risks long-term carbon lock-in and energy security vulnerabilities.

The 2023 PDP8 set emissions from electricity generation at 204–254 MtCO₂e by 2030, falling to 27–31 MtCO₂e by 2050—with a conditional “stretch” target of 170 MtCO₂e by 2030 if JETP support materialises (Viet Nam Government 2023a). The 2025 amendment narrows this band, tightening the 2030 ceiling to 197–199 MtCO₂e, while reaffirming the same 170 MtCO₂e peak under JETP.

This shift reflects greater policy alignment with climate commitments, but it also highlights Viet Nam’s dependence on international finance and technology to reach a lower peak of 170 MtCO₂e under the JETP.

Renewables are expanding rapidly, with solar, wind, and hydro already supplying over 40% of electricity in 2024 (Ember 2025). Revised PDP8 targets slightly lower near-term shares but set more ambitious long-term goals: up to 295 GW of solar, 139 GW of offshore wind, and 70% renewable capacity by 2050. Nuclear power, cancelled in 2016, has been reintroduced as a strategic option, with up to 14 GW planned by 2050, with total capacity share of 2%. PDP8 continues to rely on fossil fuels in 2050, particularly fossil gas and LNG.

The amendment places strong emphasis on addressing grid bottlenecks that have hindered renewable deployment in recent years. The government is prioritising investment in transmission and distribution, including new 500 kV and 220 kV lines, HVDC converter stations, and expanded energy storage. Operational reforms such as improved forecasting and regulatory adjustments are also planned. However, implementation lags remain a persistent risk.

Infrastructure constraints remain a critical bottleneck, as rapid solar and wind growth has outpaced grid capacity, leading to curtailments. The new Electricity Law (2024) and PDP8 revisions emphasise modernisation of transmission networks, market reforms, and investor-friendly mechanisms.

Overall, Viet Nam’s power sector reflects a dual strategy: scaling up renewables and overhauling regulation, while still relying heavily on coal and fossil gas in the medium term. This creates risks of stranded assets, import dependency, and misalignment with 1.5°C pathways, underscoring the importance of international finance and technology transfer for meeting climate and energy transition goals.

Just Energy Transition Partnership (JETP)

In December 2022, Viet Nam joined the Just Energy Transition Partnership (JETP). This partnership will provide USD 15.5bn in support until 2026–2028 from a group of donor countries (IPG; now comprised of the EU, the United Kingdom, Canada, Denmark, France, Germany, Italy, Japan, Denmark and Norway, and co-led by the EU and the United Kingdom) to help Viet Nam reach its net zero commitment by 2050. The JETP Resources Mobilization Plan detailing the conditions of the partnership had been released in December 2023 (Government of Viet Nam 2023).

Key elements of the agreement include the peaking of power sector emissions in Viet Nam at 170 MtCO₂e in 2030, and a targeted share of 47% of renewables in power generation by 2030 (European Commission 2022). The JETP aims at bringing forward Viet Nam’s peak emissions target from 2035 to 2030. The agreement also includes a biennial revision of the targets. The ambition and goals of the JETP are reflected in the PDP8, discussed below.

By mid-2025, Viet Nam had mobilised around USD 7 billion in financing linked to the JETP, representing early but tangible progress (The Saigon Times 2025). Three flagship projects have already secured commitments from IPG partners:

• A EUR 67 million (USD 78 million) loan from the French Development Agency (AFD) for a new 500 kV transmission line connecting Ho Chi Minh City and Dong Nai;
• A EUR 480 million (USD 561 million) package from six international institutions for the Bac Ai pumped-storage hydropower plant (1,200 MW); and
• A EUR 65 million (USD 76 million) loan from KfW to expand the Tri An hydropower plant of 200 MW.
• A wider pipeline of 24 projects worth over USD 7 billion has been identified, with 17 of these passing preliminary screening.

Institutionally, progress has been made to strengthen coordination. The JETP Secretariat has been placed under the Ministry of Industry and Trade (MoIT), which is responsible for the energy sector, and a five-step project screening process has been introduced to ensure greater transparency in how JETP funds are allocated (European Comission 2025). This is being aligned with Viet Nam’s updated eighth Power Development Plan (PDP8), approved in 2025, so that selected projects fit into the country’s long-term energy strategy.

Despite these advances, challenges remain. Although project pipelines are growing, actual disbursement of funds has been slow—as of early 2025, no JETP loans had yet been released, even though financing agreements had been signed (The Investor 2025).

The scale of funding is also a concern. While USD 15.5 billion is substantial, Viet Nam’s estimated energy transition costs reach USD 135 billion by 2030, and as much as USD 364–511 billion by 2050 (International Rivers and Vietnam Climate Defenders Coalition 2024). This means JETP resources will cover only a fraction of what is needed. To meet the full financing gap, it will be crucial to also leverage private capital and domestic resources and increased international climate finance beyond JETP commitments.

Following the United States’ withdrawal from Viet Nam’s JETP International Partners Group (IPG) in early March 2025, roughly USD 3 billion across Indonesia and Viet Nam, largely in the form of commercial loans/guarantees, narrowing the financing envelop (Reccessary 2025a). Given that U.S. disbursements under JETP were limited at the time of withdrawal, immediate project-level disruption appears limited; delays, where any, would stem from re-papering financing packages with remaining partners (Nangoy and Nangoy 2025).

Policy and governance issues further complicate implementation. Viet Nam has made some progress in improving its legal framework for renewables and grid development, but gaps remain in areas such as ODA regulation, planning coherence, and debt management (European Comission 2025). Civil society groups have also raised concerns about whether the process is sufficiently inclusive and transparent, questioning how strongly the “just” element of the transition is being upheld.

Coal

Coal power

With 27 GW of installed capacity in 2024, coal accounts for 32% of Viet Nam’s capacity mix (Ember 2025). Coal will keep playing a key role in the country’s power mix, with a capacity target of 31 GW by 2030 in the updated 2025 PDP8. The 2023 PDP8 anticipated a gradual reduction but did not commit explicitly to a complete phase-out.

By contrast, the 2025 amendment takes a firmer stance, confirming that all coal capacity will be retired by 2050. This shift reflects international pressure and domestic recognition that coal is incompatible with Viet Nam’s net-zero by 2050 pledge. However, the near-term reliance on more than 30 GW in 2030 shows that coal will continue to lock in carbon emissions for another decade, creating challenges for Viet Nam’s Just Energy Transition Partnership (JETP) commitments of reaching peak GHG emissions in 2030. Around 25.8 GW of capacity is expected to be retrofitted to run on ammonia or biomass, though the economic feasibility of such conversions remains uncertain.

An increasing number of coal projects are already being cancelled in Viet Nam, mainly due to a lack of financial viability, with 60 GW of coal-fired projects shelved between 2010 and 2025 (Global Energy Monitor 2025). However, with around 4 GW of coal-fired plants under construction and around 2 GW still in pre-construction stages as of July 2025, questions remain around Viet Nam’s commitment to phasing out coal by 2050 (Global Energy Monitor 2025).

Coal Supply

Viet Nam mines roughly 43–45 million tonnes of coal annually, but this output falls far short of national consumption, particularly for the power sector, where demand has more than doubled over the past fifteen years (ASEM Connect 2023). In fact, domestic coal now provides less than one-fifth of the coal burned in Viet Nam’s power stations. The remainder is met through imports, which have expanded dramatically: in 2023, import volumes surged by nearly 60% year-on-year to more than 51 million tonnes, and this momentum has continued into 2025 (The Coal Trader 2023; theinvestor.vn 2025a).

The surge in imports also complicates Viet Nam’s balance of payments and raises questions about long-term affordability, particularly if coal prices rise again. Government planning documents acknowledge these realities. Imports are projected to increase from 51 Mtpa in 2023 to 73 Mtpa by 2030, 85 by 2035, before decreasing to 50 Mtpa by 2045 (Do and Burke 2023; VietNamNet 2023).

This reliance on coal—domestic or imported—sits uneasily with Viet Nam’s climate commitments. The country has pledged to reach net zero emissions by 2050, yet its coal consumption is still on a rising curve. The Master Plan on National Energy forecasts imports to suddenly drop from 50 Mtpa in 2045 to zero by 2050 (Viet Nam Government 2023b). While this is an ambitious goal, albeit too late to respect the Paris Agreement’s goal of limiting global warming under 1.5°C degrees, a complete elimination of coal imports within just five years is overly optimistic and may not be realistically achievable, especially without corresponding changes in the power mix. In contrast, a comprehensive and gradual planning of the transition would offer Viet Nam a more secure path to phasing out coal without jeopardising economic goals.

Fossil gas

Fossil gas currently plays a minor role in Viet Nam’s energy system, providing just 7% of power generation in 2024, but this is about to change (Ember 2025). Although the share of gas in total power generation and its absolute generation both have declined in past three years, the PDP8 identifies gas and LNG-fired power as a central element of the country’s strategy to secure energy supply while gradually reducing dependence on coal.

The 2023 plan projected 37 GW of gas-fired capacity by 2030. The 2025 revision continues this pathway, with 33–37 GW by 2030 and around 45 GW targeted by mid-century, placing stricter caps on LNG imports and prioritising domestic production. Nevertheless, fossil gas is presented as a cornerstone of the power system transformation in the country, falsely emphasising the “transition fuel” argument. In practice, however, the projected gas capacity by 2050 still risks locking in a substantial fossil base.

LNG-to-power projects are explicitly eligible for government support under Viet Nam's new Electricity Law 2024, which aims to promote gas-fired power generation, including the use of imported LNG (Ho 2025).Viet Nam’s fossil gas generation goals will necessitate fuel imports capacity of 16-18 billion cubic metres per year by 2030 and 11-13 by 2050 (Viet Nam Government 2023b).

Viet Nam is planning to increase the domestic production of gas up to 5.5-15 billion cubic metres per year by 2030, and 10–15 for 2031–2050 (Viet Nam Government 2023b). In 2021, the domestic gas production was 7.2 billion cubic metres (Energy Institute 2025).

Several major projects are moving forward. The Nhon Trach 3 and 4 plants, designed to run on imported LNG, are among the first large-scale facilities expected to come online. Other projects, such as the Son My LNG-to-Power complex, the Bac Lieu LNG project, and the Long Son LNG plant, have been announced or are in advanced planning stages. These complement existing gas capacity at the Phú Mỹ power complex (The Asset 2025).

In May 2023, the state-owned company Petrovietnam built the first LNG import terminal in the country (Enerdata 2023). The current plans for the development of LNG terminals suggest that their capacity will not be sufficient to meet the demand implied by the PDP8. The new LNG import terminals at Thi Vai and Hai Linh are being developed to account for the country’s growing dependence on imported fuel.

Fossil gas is not a transition fuel and hinders progress towards reaching both national and international climate objectives (Climate Analytics 2021). PDP8 further plans that gas plants projects will be transitioned to hydrogen when financial conditions allow it, despite uncertainties regarding the environmental sustainability of the type of hydrogen used.

The massive efforts Viet Nam’s government is directing towards the gas sector development are not 1.5°C compatible and raise the spectre of significant stranded asset risks, with a phase-out timeline contingent upon the technological and economic viability of hydrogen as a fuel. Increasing the dependency on imported energy will risk the country's vulnerability to energy security threats in a complex geopolitical landscape.

Nuclear

Viet Nam’s nuclear power ambitions have undergone a significant transformation over the past decade. Initially, the country pursued an ambitious nuclear development programme, with plans for 14 reactors by 2030. But in 2016, the National Assembly suspended all nuclear plans (Naidu 2018). This stance has shifted markedly in recent years, and in 2025, the government revived nuclear energy as a strategic priority in its revised PDP8. For the first time since the suspension, nuclear power was formally included in the electricity mix by reviving the unfinished projects which were at the advance stage of planning in 2016.

The 2023 PDP8 excluded nuclear entirely, consistent with Viet Nam’s 2016 decision to cancel the Ninh Thuan project. The amendment, however, revives nuclear with 4–6.4 GW planned for 2030–2035, rising to 10.5–14 GW by 2050. The government argued that the increased dependency on nuclear is the result of growing concerns about grid stability, particularly after recent grid failures due to the sudden rise in solar.

Even optimistic government estimates suggest that the earliest operational date for Ninh Thuan 1 would be 2035, with realistic expectations pushing into 2037 or later (theinvestor.vn 2025b). Financing remains a major hurdle: nuclear projects are capital-intensive, and earlier cancellations were due to escalating costs. Viet Nam must also build a robust regulatory framework, ensure strong safety oversight, and develop the necessary human capital to operate and maintain nuclear plants. Public acceptance, land use issues, and environmental considerations add further complexity (NUCNET 2025).

Although nuclear electricity generation does not emit CO₂, the CAT doesn’t see nuclear as the solution to the climate crisis due to its risks such as nuclear accidents and proliferation, high and increasing costs compared to alternatives such as renewables, long construction times, incompatibility with flexible supply of electricity from wind and solar and its vulnerability to heat waves.

Renewables

In 2024, renewable energy sources accounted for 42% of electricity production, including hydro (Ember 2025). Hydroelectricity generated 29% of Viet Nam’s electricity in 2024, compared to just 13% from other renewable sources, including wind and solar (Energy Institute 2025).

Renewables continue to feature prominently, though with a recalibrated trajectory in the revised PDP8. The 2023 PDP8 targeted 31–39% capacity share by 2030, potentially rising to 47% under JETP conditions, and 68–72% by 2050. The 2025 amendment increases the near-term ambition, with the 2030 target to 40–47% (excluding large hydro). Within this, solar power stands out as the biggest winner: the 2025 plan now envisions up to 73 GW by 2030 and nearly 300 GW by 2050, with half of homes and offices deploying rooftop solar by the end of the decade.

Wind targets have also been substantially increased: onshore capacity is expected to reach 26–38 GW by 2030 and up to 91 GW by 2050, while offshore wind could expand to 17 GW by 2030 and as much as 139 GW by mid-century. Hydropower, already heavily exploited, will remain stable at around 33–35 GW in 2030 and increase to up to 40 GW in 2050, playing an important role in grid balancing.

At the same time, the target set by the PDP8 is underwhelming considering Viet Nam’s significant renewables potential, and the strong growth of rooftop solar PV deployment in the last few years. As per the PDP8, solar energy has a technical potential of 963 GW, onshore wind stands at 221 GW, and offshore wind is estimated at 600 GW (Viet Nam Government, 2023b). This represents a renewable energy potential that is more than 24 times larger than Viet Nam's installed power capacity in 2024.

In addition to the PDP8 and the 2022 National Climate Change Strategy, the New Electricity Law 2024 provides Viet Nam with a more modern, investor-friendly, and diversified energy framework. It replaces the older Electricity Law (2004, with amendments) and consolidates many elements of regulation under one updated, coherent law. It creates strong momentum for renewables, offshore wind, and emerging technologies such as hydrogen, while also exploring nuclear as a long-term option (FRASERS 2025).

One of the most notable aspects of the law is its emphasis on mechanisms that will support power development. These include the establishment of contractual guarantees for electricity output, transparent pricing systems, fuel cost pass-through arrangements, and clearer rules on the duration of investment incentives (Vietnam Briefing News 2024)

Renewable energy continues to receive strong backing. Offshore wind receives preferential policies and freedom for project and share transfers, while green hydrogen and green ammonia are explicitly supported. Nuclear energy is also reinstated under strict safety provisions.

A new category of emergency projects, fast-tracked to address shortages or disasters, will benefit from expedited approvals and exemptions, though these measures may compromise environmental safeguards.

Contractual and market reforms form another pillar. Detailed rules for Power Purchase Agreements (PPAs) and Power Service Supply Agreements (PSLAs) are set, with English allowed in foreign-invested projects(ho 2025).

Key uncertainties remain, as many critical provisions, including those for offshore wind, pricing, and contracts, await secondary regulations. Emergency project rules could also weaken transparency. Moreover, the dual push for fossil fuels and renewables risks tension with climate goals.

Solar

Solar PV deployment in Viet Nam has experienced rapid growth, particularly between 2019 and 2021. At the end of 2021, the installed solar capacity was 16.7 GW, including 7.6 GW of rooftop solar (Ember, 2023). Since then solar PV capacity has increased marginally to 18.7 GW by 2024 (Ember 2025). Between 2021 and 2024, solar installations slowed due to several factors.

Regulatory uncertainty, particularly changes to the rooftop solar feed-in tariff (FiT) scheme and restrictions on selling excess electricity to the grid, has discouraged investment (LTN & Partners 2024). Additionally, grid capacity limitations and curtailment issues have made it difficult to integrate growing solar generation (Intelligence 2025). Financial difficulties faced by the state-owned utility EVN, including delays in payments and retroactive tariff adjustments, further undermined investor confidence, contributing to the slowdown (Reuters 2025a).

The 2023 PDP8 foresaw about 12 GW by 2030 and up to 189 GW by 2050. The 2025 amendment raises the ambition to maximum 73 GW in 2030 and up to nearly 300 GW in 2050, with a strong emphasis on rooftop deployment. Half of all homes and offices are expected to deploy solar for self-consumption by 2030. This expansion reflects both declining solar costs and the need to exploit Viet Nam’s excellent solar potential.

Viet Nam added more solar power capacity than all other ASEAN countries combined in 2020 (Ember 2022). Between 2019 and 2020 alone, Viet Nam's solar capacity increased by 11.7 GW (EVN 2021). This solar boom experienced in Viet Nam can be attributed to a well-designed policy mix, which includes generous feed-in-tariffs and the exemption of renewable energy producers from income tax, import tariffs, and land lease payments. Viet Nam accomplished its 2025 solar targets as early as 2020 (Ember 2022). The average investment cost and levelised cost of energy for solar in Viet Nam are the lowest among the ASEAN countries, at respectively USD 690 per KW and USD 0.046 per kWh (IRENA 2022).

However, the FiT policy that once drove the solar boom is now facing a crisis of confidence. More than 170 solar and wind projects, representing an estimated USD 13 billion in investment, are at risk due to regulatory uncertainty surrounding the country’s feed-in tariff scheme (Guarascio and Guarascio 2025).

Hydro

Hydro power is the largest source of renewable energy in Viet Nam, representing 29% of the electricity generation mix in 2024 (Ember 2025). The riverscapes of Viet Nam are among the most exploited in the world (Sasges and Ziegler 2023).

The 2023 PDP8 reiterates Viet Nam's commitment to harnessing the full potential of its hydro resources which remains largely unchanged in the 2025 PDP8. With most viable domestic potential already exploited, capacity is expected to stabilise at 33–35 GW by 2030 and rise to up to 40 GW by 2050, with only minor additions from small and pumped storage projects. According to the National Climate Change Strategy, Viet Nam will pursue the development of small hydro plants that adhere to environmental protection standards, while also expanding medium and large-scale hydroelectric projects (Viet Nam Government 2022c:20222). Overall, hydropower’s role is increasingly one of grid balancing rather than major new supply.

Climate change risks disrupt water flows, intensify seasons, and heighten evaporation, directly impacting Viet Nam's hydroelectric production. The 2023 droughts caused the water levels in multiple reservoirs around the country to drop below the levels required for turbine operations (Asia News Network 2023).

Wind

The installed onshore capacity reached 6 GW at the end of 2024 (Ember 2025). The 2023 PDP8 plan expected about 21 GW of onshore wind by 2030 and 60–77 GW by 2050. The amendment raises these dramatically: 26–38 GW of onshore wind by 2030, and reaching 84–91 GW by 2050.

Viet Nam's vast coastlines offer substantial potential for offshore wind energy, estimated at 600 GW in the PDP8. Following that the revised PDP8 has increased the offshore wind capacity to maximum 17 GW by 2030 and then 113-139 GW by 2050.

The revised PDP8 also halts the initiative to prioritize or permit unrestricted offshore wind development. This decision stems from several major challenges, including the absence of consistent legal regulations, the requirement for significant capital investment, and issues related to national defence and security.

Grid and storage

Although the policies implemented have been successful in driving investment in Viet Nam’s renewable energy sector, the lack of planning in transmission and distribution resulted in a severe grid failure (GREENCIC 2023). Viet Nam's solar PVs boom has led the National Load Dispatch Centre to announce a pause in new renewable capacity deployments in 2022 (IUCN 2022).

The solar deployment has been concentrated in the centre and south of the country, with solar energy comprising over 60% of installed capacity in some regions (IUCN 2022). The lack of accurate production forecasts contributes to the challenges experienced by the grid (VNEEC 2023). Prioritising the fast-tracking of approvals and investments in upgrading the power grid’s transmission and distribution infrastructure, as well as fostering interconnectivity among regions are key to utilize the potential of renewables (World Bank 2023).

While the 2022 moratorium paused new grid-connected solar/wind projects to allow time for grid upgrades, as of the plan revisions, the government has laid out clearer conditions and capacity targets for new projects. There is no evidence the pause remains fully in force; rather, new deployment is expected to align with upgraded grid readiness under PDP8.

The revised PDP8 gives high priority to expanding and strengthening the grid: adding 500 kV and 220 kV transmission lines, new high-voltage substations, and even HVDC converter stations. This is meant to relieve bottlenecks that previously held up new solar/wind deployment.

The focus is not only on physical infrastructure, but also operational improvements: regulatory reforms, better forecasting, system flexibility, and investment in energy storage (especially Battery Energy Storage Systems) to help with frequency stability and handling variable renewables (MoIT n.d.).

Even with PDP8, implementation lags remain. Grid investment has historically been behind generation growth which has led to curtailment and infrastructure overload in some regions.

Industrial process emissions mainly stem from cement production, followed by steel and ammonia production (Viet Nam Government 2019). This sector is projected to be the second largest in terms of emissions by 2030 based on the current policy pathway. It is also set to be the sector with the biggest health impact (EREA & DEA 2021). Viet Nam’s first NDC excluded industrial process emissions, but its 2020 and 2022 NDC updates included it (Viet Nam Government 2022e).

Policy attention to the entire industry sector has historically been low. In 2015, the Ministry of Industry and Trade approved the Green Growth Action Plan 2015-2020 for the industry sector, and the Ministry of Construction has an action plan until 2020 to reduce cement industry GHG emissions. The two plans together aim to reduce emissions by 20 MtCO₂e by 2020 and 164 MtCO₂e by 2030 compared to BAU levels.

In parallel, the Viet Nam National Energy Efficiency Program 3 (2019–2030) set intensity reduction targets for industrial subsectors, such as cutting chemical industry energy use by at least 10% and reducing the energy required to produce one tonne of cement from 87 kgOE in 2015 to 81 kgOE by 2030 (MoIT 2019). By 2025, all new industrial parks are also required to apply energy efficiency and conservation measures.

Since 2022, more substantial developments have emerged. Viet Nam is introducing an emissions trading scheme (ETS), beginning with the allocation of emission quotas to large facilities in the power, cement, and steel sectors—together responsible for nearly 40% of national emissions (Saigon Times 2025). Pilot quotas for 2025–2026 are being allocated now, with the scheme to be expanded in phases through 2030 (Vn Economy 2025a). Facilities are required to complete greenhouse gas inventories as a basis for quota allocation, marking a significant step in building a domestic carbon market.

A key foundation for Viet Nam’s industrial decarbonisation effort has been the gradual introduction of mandatory greenhouse gas inventories and reporting requirements. Under Decision 01/2022 and its subsequent updates, large facilities across energy-intensive industries—including cement, steel, and ceramics—are required to establish comprehensive emissions inventories (CIC 2024). These obligations are not only administrative: they underpin the allocation of emission quotas under the emerging domestic carbon market (S&P Global 2024).

International pressures, particularly the EU’s Carbon Border Adjustment Mechanism, are also accelerating Viet Nam’s regulatory reforms (S&P Global 2024). To respond, the government is combining emission quotas with sector-specific roadmaps. In 2024, a preliminary Industrial Decarbonisation Roadmap was published under the UNIDO-led Industrial Decarbonization Accelerator, outlining pathways for heavy industry transformation (UNIDO 2024).

In July 2022, Viet Nam adopted a roadmap for the transition to green energy in the transport sector, prioritising electrification and use of biofuels with expansion of E5 blending, targeting 100% of clean transportation by 2050 (Viet Nam Government 2022b). Since then, Viet Nam has moved beyond setting broad goals in the transport sector (such as universal electrification of buses, taxis, etc.) to developing more detailed policy instruments, roadmaps, and implementation plans.

The adoption of the Action Plan to Accelerate Energy Transition by the Ministry of Transport is a central step, giving specificity to what needs to occur through 2030 and beyond (e.g. infrastructure, fleet replacement, modal shifts toward rail/sea/inland navigation) (NDC Transport Initiative for Asia 2024).

In the urban transport sector, this roadmap sets goals: for all new buses to be using electricity or green energy by 2025, all new taxis to be electric vehicle by 2030, and for 100% of buses and taxis to either be electrified or to be using green energy by 2050. This roadmap also includes interim targets for the electrification of railways and shipping. Battery electric vehicles are already exempt from registration fees from three years starting March 2022 (Le, Posada, and Yang 2022).

Viet Nam remains one of the most motorcycle-dependent countries in the world, and two-wheelers continue to dominate its transport landscape. By 2023, the number of registered two-wheelers had surpassed 74 million, accounting for more than 90% of all motorised vehicles in the country (ICCT 2025). Motorcycle ownership has become nearly universal: close to nine in ten households own at least one, and in major cities such as Hanoi and Ho Chi Minh City, two-wheelers account for over 70–80% of travel demand.

Within this context, electric two-wheelers (E2Ws) have emerged as an important, if still modest, component of the national fleet. Viet Nam is the world’s fourth-largest market for E2Ws after China, India and Indonesia and their uptake has accelerated in recent years (ICCT 2025). The E2W market was valued at around USD 222 million in 2024, with projections suggesting it could nearly triple by 2033 (IMARC 2025). Although new sales of E2W is steadily increasing at more than 10% per year, E2Ws still represent only 3% of the overall two-wheeler stock (IMARC 2025).

To reduce energy use of this sector the National Strategy for Climate Change to 2050 includes measures for restructuring the transport market, including the transition from road transport to inland waterway and coastal transport; make the transition from road to railway, increase railway goods transport percentage; increase transport efficiency via building and expanding road network (Viet Nam Government 2022b).

Energy demand in the buildings sector has risen in the past decade as result of Viet Nam’s successful implementation of universal electrification and the increase in use of electrical home appliances (APEC 2022). As a consequence, the use of biomass has significantly declined.

The government has introduced some energy efficiency policies, including the VNEEP3 (MOIT, 2019). An official Prime Minister Decision (No.04/2017/QD-TTg) in 2017 sets out mandatory energy labelling and minimum energy efficiency standards roadmap for equipment and appliances (MoIT 2019). In the National Green Growth Strategy there are specific tasks relating to the development of green buildings, and energy efficiency of buildings (Viet Nam Government 2019).

A major milestone was the amendment of the Law on Energy Efficiency and Conservation in 2023–24 (VNEEP 2025b). This reform strengthened state oversight of energy efficiency, broadened the scope of mandatory energy labelling and minimum performance standards to include not only appliances but also construction materials, and created clearer mechanisms for energy audits, monitoring, and workforce training (VNEEP 2025a). It also introduced financial tools to support investment in efficiency improvements, signalling the government’s recognition that upfront cost remains a barrier for developers and households alike.

Meanwhile, VNEEP3 has continued to guide sectoral efforts, with explicit targets for reducing energy consumption in buildings. The results are becoming visible, as by 2024, Viet Nam had recorded over 550 green-certified buildings covering more than 13 million square metres of floor area, a number that already surpasses targets initially set for 2025 and 2030 (B-Company 2025a; Vn Economy 2025b).

In 2023, agriculture represented 15% of Viet Nam’s GHG emissions with methane from rice cultivation and livestock production as dominant sources (Gütschow, Busch, and Pflüger 2024).

In 2022, the government issued the Methane Emissions Reduction Action Plan to 2030 (Decision 942) (Viet Nam Government 2022d). This was the first comprehensive plan to directly address methane, setting quantified limits for both cultivation and animal husbandry emissions. As per the Methane Emissions Reduction Action Plan, the objective is to limit methane emissions from agriculture, setting goals to limit cultivation emissions to 30.7 MtCO₂e and animal husbandry emissions to 15.2 MtCO₂e by 2030, aligned with Global Methane Pledge.

The National Strategy for Climate Change to 2050 also adopted in 2022, reinforced these targets, requiring the agricultural sector to cut emissions by 43% from its projected 2030 baseline, limiting total emissions to around 64 MtCO₂e (Gütschow et al., 2022a). The strategy framed this not only as a mitigation task but also as a development opportunity: restructuring the sector, promoting organic and circular agriculture, and deploying climate-smart practices that improve resilience while lowering emissions.

Since 2023, the Ministry of Agriculture and Rural Development has begun to translate these commitments into more concrete programmes. A major milestone was the design of a Low-Emission Crop Production Plan (Ministry of Agriculture and Environment 2025). This plan targets at least a 30% reduction in methane emissions from crop cultivation by 2030, and a 10% reduction in overall agricultural GHG emissions compared to 2020 levels.

The plan aims to apply low-emission farming practices across 2.5 million hectares, focusing on commodity production zones where mitigation potential is greatest. To underpin this, the Ministry has committed to building robust measurement, reporting, and verification (MRV) systems, with databases disaggregated by crop type, ecological zone, and cultivation practice.

Parallel to this, the government launched the flagship “One Million Hectares of High-Quality, Low-Emission Rice” programme in the Mekong Delta, Viet Nam’s most important rice-growing region and a global hotspot for methane emissions from paddy cultivation (IRRI 2024). The programme, designed to run to 2030, supports farmers in adopting alternate wetting and drying irrigation methods, precision fertiliser application, improved seed varieties, and sustainable residue management.

Viet Nam’s land use, land use change and forestry sector is currently a net sink and is intended to play a large role in meeting Viet Nam’s updated NDC. Under the government reported business-as-usual scenario (BAU), the LULUCF sector is estimated to be a sink of 49 MtCO₂e in 2030 (Viet Nam Government, 2022a).

In its 2050 National Climate Change Strategy, Viet Nam has set a target for the land use and forestry sector to reduce 70% of emissions and increase 20% of carbon absorption and achieve a total sink capacity of 95 MtCO₂e by 2030. Viet Nam’s forest coverage currently stands at just over 42%, equivalent to nearly 13.9 million hectares that meet national forest standards (News 2023). This is close to, but still below, the government’s target of maintaining 43% forest cover set out in the National Climate Change Strategy (Viet Nam Government 2022c).

The government is also seeking to improve forest quality and ensure sustainable management, recognizing that degraded or young forests provide far less carbon sequestration than mature, healthy ecosystems.

The 2017 Law on Forestry remains the backbone of forest governance, but new regulations have been introduced (MNRE, 2019). Most notably, Decree 27/2024/ND-CP, effective from March 2024, amended earlier forestry decrees to regulate the temporary use of forest land for infrastructure projects such as electricity networks (Viet Nam Government 2024).

The decree sets conditions to minimise damage, requires restoration after use, and aims to balance development pressures with the need to maintain forest cover. At the same time, the Government continues to maintain forest protection and restoration as part of its climate strategies (e.g. via REDD+-related programs, forest monitoring, improving forest quality). Some emphasis is being placed on digital tools: for example, digital forest monitoring, timber traceability, law enforcement aided by technology (B-Company 2024).

In 2023, the waste sector represented 5% of Viet Nam’s GHG emissions excluding LULUCF (Gütschow et al. 2024). In 2018, the Prime Minister approved the National Strategy for General Management of Solid Waste to 2025 with a 2050 vision, which included energy recovery and GHG reduction measures (MNRE, 2019).

According to the 2050 National Climate Change Strategy, the emissions reduction from the waste sector would be 61% by 2030 and 91% by 2050. This is supported by policy plans such as implementing solutions for managing and reducing waste from production to consumption, expand responsibilities of manufacturers; and an increased reuse and recycling of waste.

One of the most important milestones came in early 2025 with the approval of the National Action Plan for Implementing the Circular Economy until 2035 (Decision No. 222/QĐ-TTg) (B-Company 2025b). This plan sets out a long-term vision to reduce waste, improve recycling and reuse, and increase resource efficiency across sectors such as agriculture, manufacturing, construction, tourism, and services. It also calls for stronger institutional frameworks, clearer technical standards, and improved mechanisms for data sharing and monitoring (Viet Nam Circular Economy 2025).

The Law on Environmental Protection (effective 2022) created the legal basis for waste sorting and extended producer responsibility (EPR) (Law No. 72/2020/QH14 on Environmental Protection – Policies 2024). Recent updates to EPR regulations, most notably Decree 05/2025/ND-CP, broaden the scope of products covered and create more flexibility for recycling pathways (B-Company 2025b). From a mitigation standpoint, this expansion is significant, as it incentivises producers to design lower-emission products and packaging while diverting waste from high-emission disposal methods.

Viet Nam will also adopt advanced solutions in treating wastes and wastewater to reduce methane emissions (Viet Nam Government 2022a). The Methane Emissions Reduction Action Plan includes the goal of cutting methane emissions from solid waste management and wastewater treatment by 13% at 22 MtCO₂e by 2025, and by 30% at 17.5 MtCO₂e by 2030, compared to an implied 2020 baseline level of 25.3 MtCO₂e (Viet Nam Government 2022d).

The 2023 PDP8 promotes power generation through organic and solid waste combustion, with estimated potentials of 7 GW and 1.8 GW. In the 2025 update, although there is no specific mention of organic or solid waste, the plan aims for more than 2 GW waste to energy by 2030 and 5 GW by 2050, marginally lower than 2023 version of the PDP8.