Vietnam has the opportunity to form a renewable energy industry.

Expanding cooperation opportunities for industrialization and modernization development

On July 19, at the European Trade Counsellors Conference held in Italy, Ms. Hoang Le Hang, First Secretary of the Vietnamese Embassy in the UK, shared the potential and opportunities for cooperation with the UK in industry, energy, green economy , and Vietnam-UK emission reduction.

Ms. Hoang Le Hang said that for Vietnam, the UK and Ireland are markets with good potential for trade development. In fact, bilateral trade between Vietnam and the UK has been growing continuously since 2021, even in the most difficult times such as the second half of 2023.

Specifically, in the first 6 months of 2024, the value of Vietnamese goods exports to the UK reached nearly 3.6 billion USD, an increase of 24.7% over the same period in 2023. Vietnam had a trade surplus of more than 3.2 billion USD (an increase of 28.5% over the same period in 2023). In the first half of 2024, the export value from Vietnam to Ireland reached more than 406 million USD, an increase of 70.5% over the same period in 2023.

First Secretary Hoang Le Hang - Vietnam Trade Office in the UK (concurrently in Ireland) speaking at the European Regional Trade Counsellors Conference held in Italy

In recent times, there have been many opportunities for Vietnam to consider approaching and cooperating with the UK in the fields of industry and energy.

Accordingly, regarding the UK's industrial policy, from the mid-18th century, Britain was the first country in the world to industrialize, marking the beginning of a modern industrial era that made the UK one of the world's leading prosperous countries.

The UK Department of Science and Technology has evaluated more than 50 technologies according to 8 criteria: Environmental sustainability, health and life sciences, digital economy, national security, international comparison, fundamentals, market potential, threats and resilience. Based on this approach, a list of 5 important industries in the UK's national economic development has been identified, including: Artificial Intelligence (AI); biomechanical technology; future telecommunications; semiconductors; quantum technology. These are also opportunities and areas for Vietnam to consider approaching and cooperating in industrialization and modernization.

In terms of energy policy, the UK is the second largest offshore wind (OSW) market in the world. The UK currently has 13.9 GW of fully operational offshore wind capacity, a four-fold increase from its installed capacity in 2012. There is also a total project capacity of around 77 GW across 80 projects under construction, approved or in development.

On March 30, 2023, Minister for Energy Security and Net Zero Grant Shapps announced the Green Industries Investment Acceleration Plan, abbreviated as the UK Energy Acceleration Plan "Powering up Britain". This is an ambitious plan of the UK Government to achieve the following 4 goals: Energy security; consumer security; climate security; economic security.

Accordingly, the Powering up Britain Plan includes 12 solutions to create clean energy sources, including: Building 8 carbon capture and storage (CCUS) projects in the North East and North West; building small-scale nuclear power plants to increase nuclear power output from the current 15% to 25% of total domestic electricity production by 2050; operating a hydrogen-fueled economy; accelerating the implementation of renewable energy projects; reducing energy consumption demand by increasing energy efficiency in households and businesses; reducing dependence on fossil fuels for heating; reducing electricity bills; accelerating the process of project planning, licensing and implementing energy infrastructure development projects using the most modern low-carbon technologies such as solar and wind power, greening the economy and attracting financial resources for green energy; decarbonizing the transport sector; mobilizing private investment; increasing exports and strengthening institutions; Solving the problem of future carbon leakage.

In terms of emissions reduction policy, the UK sees net zero emissions not only as a necessary target to protect the future of our planet, but also as a great opportunity to grow the country’s economy. Between 1990 and 2021, the UK has cut emissions by 48%, decarbonising faster than any other G7 country.

In December 2023, the Department for Energy Security and Net Zero set out the UK’s roadmap to net zero emissions as follows: All UK emissions to be net zero by 2050; Monitoring and reporting on public sector and government emissions is a tool to help the UK ensure it is on track to meet its climate commitments.

Trade Counsellor Hoang Le Hang also said that the UK's CBAM (carbon border adjustment mechanism) is an important step towards achieving the UK's decarbonisation and climate change targets. The CBAM sets a limit on the amount of carbon that products must comply with in order to be allowed to import into the UK/EU. Accordingly, importers will have to report the emissions contained in imported goods. If these emissions exceed the UK standard, exporting enterprises will have to buy "emission certificates" according to the current carbon price in the export market (UK). The Carbon Tax will be applied in the UK from 2027.

The UK CBAM will apply to the most carbon-intensive industrial goods imported into the UK, placing the highest carbon price on products in the aluminium, cement, ceramics, fertilisers, glass, hydrogen, iron and steel sectors. Of these, Vietnam has two main export products to the UK: ceramics and iron and steel.

“ Businesses need to prepare for the UK CBAM and stay competitive in the UK market by: Conducting a thorough assessment of their carbon footprint. Taking steps to reduce their carbon footprint. Partnering with less carbon-intensive suppliers. Investing in cleaner technology ,” Commercial Counsellor Hoang Le Hang advised.

Prospects for energy cooperation and emission reduction between Vietnam and the UK

According to First Secretary Hoang Le Hang, the UK is the world's leading clean energy developer, so Vietnam can promote cooperation and learn from the UK and other developed countries in the transition to clean energy and renewable energy.

Accordingly, the UK is the first country in the world to put the Net-zero target (reducing greenhouse gas emissions to as close to zero as possible) into law and commit to reducing 100% of greenhouse gas emissions by 2050. The UK's clean energy industry is still growing in the context of many European countries facing difficulties. In 2022, although gas electricity still leads with a rate of 38.5% of the UK's total electricity output, wind power set a new record, providing about 27% and ranked second while nuclear energy ranked third, accounting for 15.5%. The UK advocates developing clean energy to ensure energy supply and to ensure national energy security.

Ms. Hoang Le Hang said that Vietnam can cooperate with the UK to train human resources in the clean energy industry because the UK is a country with leading universities in this industry. At the same time, Vietnam can learn from the UK how to attract investment from big players in the industry and build and develop an industrial chain system and support for the development of the renewable energy industry to prepare for the energy transition.

Like the UK, Vietnam has had a strong oil and gas industry for decades but will face declining oil and gas reserves in the future, while energy demand will increase to develop the economy. Developing clean energy will be a challenge as well as a great opportunity for Vietnam in the coming time.

First Secretary Hoang Le Hang also said that the UK and the remaining G7 countries have adopted the first JETP "Just Energy Transition Partnership" statement at the 26th United Nations Climate Change Conference (COP 26) in Glasgow, UK in 2021, which will support Vietnam and a number of other countries (India, Indonesia, South Africa, etc.) in a just energy transition. Participating in the statement, the partners committed to mobilizing an initial amount of 15.5 billion USD in the next 3 to 5 years to address Vietnam's just energy transition needs. Of which, 7.75 billion USD will be mobilized by the International Partnership Group (IPG) with more attractive borrowing conditions than the current capital market.

In addition, the Glasgow Finance Alliance (UK) for Net Zero Emissions (GFANZ) mobilizes at least $7.75 billion in private finance to directly support businesses through investments from international corporations and businesses.

" The active and effective implementation of the JETP Declaration is one of the important solutions for the equitable energy transition in Vietnam. Through JETP, Vietnam will create a framework for cooperation with international partners that will help Vietnam improve policies, transfer technology, and provide financial support for equitable energy transition; attract investment in renewable energy development, improve energy efficiency, and upgrade grid infrastructure. Along with that, Vietnam has more motivation to develop a renewable energy center and form a renewable energy industry," affirmed Ms. Hoang Le Hang, First Secretary of the Vietnamese Embassy in the UK and Ireland .

Source: https://congthuong.vn/viet-nam-co-co-hoi-de-hinh-thanh-nganh-cong-nghiep-nang-luong-tai-tao-333610.html