The Ministry of Industry and Trade promotes the development of green and renewable energy for sustainable growth - photo: Dinh Dung

Commitments, regulations

According to Nguyen Duc Hien, Deputy Head of the Central Economic Commission, for Vietnam, the target of achieving net-zero emissions by 2050 is both a challenge and an opportunity for ministries, sectors, localities and businesses to undergo green transformation and sustainable development, enhance competitiveness, promote trade cooperation, and invest in development, especially in the context of many countries moving towards establishing and applying carbon barriers to imported goods.

Hien also noted that in recent years, Vietnam has made significant achievements in green transformation and sustainable economic development. A notable example is the positive shift in energy, with renewable energy accounting for approximately 27.1 and 13.7 percent of the country’s total power capacity and electricity output, respectively. The renewable energy capacity-related targets set out in the Politburo’s Resolution No.55-NQ/TW are 15-20 percent by 2030 and 25-30 percent by 2045.

In 2023, Vietnam sold 10.3 million carbon credits through the World Bank, earning US$51.5 million. Green credit has been growing 20 percent per year since 2017 and accounted for nearly 4.5 percent of the economy’s loan balance last year. Vietnam issued almost US$1.16 billion worth of green bonds from 2019-2023.

Le Cong Thanh, Deputy Minister of Natural Resources and Environment, said Vietnam has taken urgent actions with the involvement of the entire political system to ensure the realization of the above-mentioned targets.

Power of business community

The business community has welcomed green targets. Foreign direct investment (FDI) companies, in particular, are taking the lead in greening production and trading activities. They have set forth trajectories and commitments to reducing greenhouse gas emissions and achieving net-zero emissions.

Nguyen Thanh Phuc, Head of Public Affairs at Heineken Vietnam, said his company strives to achieve net-zero emissions by 2030.

United Overseas Bank in Vietnam (UOB Vietnam) has committed itself to achieving net-zero emissions by 2050. “Compared to other ASEAN (Association of Southeast Asian Nations) countries, Vietnam’s target of net-zero emissions by 2050 is more ambitious. For example, Indonesia has set a target of net-zero emissions for 2065. The Vietnamese Government has pledged to turn Vietnam into the second-largest ASEAN economy in the next 20 years,” said Lim Dyi Chang, Head of Commercial Banking, UOB Vietnam.

Hong Sun, Chairman of the Korea Chamber of Business in Vietnam, said without the government’s guarantee through long-term contracts, it is difficult for foreign investors in Vietnam, including those from the Republic of Korea (RoK), to raise capital for projects worth billions of US dollars. With their limited capital, enterprises have to attract capital from financial institutions, he said.

Bui Khanh Nguyen, Vice President of Public Affairs, Communications & Sustainability of Coca-Cola Beverages Vietnam, said green transition challenges faced by Coca-Cola Vietnam, such as fulfilling multiple responsibilities simultaneously, including packaging collection and recycling, and various taxes, will burden the company and reduce its competitiveness.

“We hope that the Vietnamese Government will soon and more rapidly introduce a carbon credit system so that businesses can exchange, purchase/sell and sign contracts domestically and globally,” Nguyen said.

In developed countries, the transition process is relatively more challenging as their infrastructure was built many years ago. Meanwhile, for Vietnam, as a developing economy with improving infrastructure, the transition to a green economy would probably be easier.