On 26th July 2023, the Prime Minister signed Decision No. 893/QD-TTg to approve the national energy master plan for the period of 2021 – 2030, with a vision to 2050.
The plan aims to firmly ensure national energy security, meet the requirements of socio-economic development, modernize the energy industry with a focus on renewables, and become a regional clean energy center. Successfully implementing the energy transition plays an important role in meeting the net zero emission target by 2050.
The plan sets out the below targets:
– Regarding national energy security enhancement: 155 million tons of oil equivalent energy supply by 2030 and 294-311 million tons by 2050.
– Regarding equitable energy transition: share of renewable energy in the total primary energy is 15-20% by 2030 and about 80-85% by 2050. The goal is to cut the emissions by 17-26% by 2030 and about 90% by 2050 compared to the normal development scenario.
– Regarding energy industry development: the plan aims to establish and develop several clean energy centers in the northern, central and southern regions when favorable conditions are available.
It also aims to develop new energy production to serve domestic and export demand. By 2030, the capacity of green hydrogen production is expected to be about 100 -200 thousand tons/ year.
To achieve these goals, six implementation solutions were set out, involving capital mobilization and allocation; mechanisms and policies; environment, science, and technology; human resource development; international cooperation; and implementation and supervision of the plan.
This plan shows Vietnam’s strong desire to become a leading clean energy hub and renewable energy exporter in Southeast Asia, making us a driving force in the global transition towards sustainable energy.
We examine Vietnam’s commitments with regard to energy development under the Comprehensive and Progressive Trans-Pacific Partnership (‘CPTPP’) and the EU-Vietnam Free Trade Agreement (‘EVFTA’) as below.
EVFTA
Under Chapter 7 on Non-tariff barriers to trade and investment in renewable energy generation, Vietnam commits to promoting, developing and increasing the generation of energy from renewable and sustainable sources, particularly through facilitating trade and investment. Specific commitments include:
• refrain from adopting measures providing for local content requirements or any other offset affecting the other Party’s products, service suppliers, investors or enterprises;
• refrain from adopting measures requiring to form a partnership with local companies, unless those partnerships are deemed necessary for technical reasons and that Vietnam can demonstrate those reasons upon request of the other Party;
• ensure that any measures concerning the authorization, certification and licensing procedures that are applied, in particular, to equipment, plants and associated transmission network infrastructures, are objective, transparent, non-arbitrary and do not discriminate among applicants from the Parties;
• ensure that administrative fees and charges are transparent and non-discriminating.
Vietnam has not made any commitments in the EVFTA on:
• production, transmission and distribution of electricity on private-owned line;
• production of gas and transmission of gas through a private-owned tube; and
• production of hot water and steam, distribution of hot water and steam through private-owned line.
For all service and non-service lines related to energy, at least 20% of managers, executives and specialists must be Vietnamese citizens, unless those positions cannot be replaced by Vietnamese citizens. However, a minimum of three non-Vietnamese managers, executives and experts are allowed per business.
CPTPP
Under the CPTPP, Vietnam commits its transition to a low emissions and resilient economy. Vietnam shall cooperate with other CPTPPP countries to address energy efficiency, development of cost-effective, low emissions technologies and alternative, clean and renewable energy sources; sustainable transport and sustainable urban infrastructure development; addressing deforestation and forest degradation; emissions monitoring; market and nonmarket mechanisms; low emissions, resilient development and sharing of information and experiences.
Regarding power development, foreign investment to own or operate power transmission facilities in Vietnam may not be permitted. Vietnam Electricity Corporation (‘EVN’) is currently the sole authorized owner and operator of power transmission facilities in Vietnam.
In addition, Vietnam reserves the right to adopt or maintain any measure with respect to investment in hydroelectricity and nuclear power.
Regarding Services incidental to energy distribution (CPC 887), Vietnam does not allow foreign services suppliers to supply such services cross-border and Vietnam also does not allow foreign investment in this sector.
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Please do not hesitate to contact Dr. Oliver Massmann at omassmann@duanemorris.com if you have any questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.