Vietnam has the opportunity to form a renewable energy industry.

Expanding opportunities for cooperation in industrialization and modernization.

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

Ms. Hoang Le Hang stated 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 continuously grown from 2021 to the present, even during the most challenging periods such as the second half of 2023.

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

First Secretary Hoang Le Hang - Vietnam Trade Mission in the UK (also covering Ireland) speaks at the Conference of Trade Counselors in Europe held in Italy

In recent times, Vietnam has had many opportunities to consider approaching and cooperating with the United Kingdom in the industrial and energy sectors.

Accordingly, regarding the industrial policy of the United Kingdom, 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 United Kingdom one of the world's leading prosperous nations.

The UK Department for Science and Technology assessed over 50 technologies based on eight criteria: environmental sustainability, health and life sciences, digital economy, defense and security, international comparability, underlying infrastructure, market potential, threats, and resilience. Based on this approach, they identified a list of five key industries crucial to the UK's national economic development: Artificial Intelligence (AI); biomechanical technology; future telecommunications; semiconductors; and quantum technology. These also represent opportunities and areas for Vietnam to consider for industrialization and modernization.

In terms of energy policy, the UK is the world's second-largest offshore wind (OSW) market. It currently has 13.9 GW of fully operational offshore wind power, a fourfold increase from its 2012 installed capacity. In addition, there is a total project capacity of approximately 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 UK Energy Acceleration Plan, also known as "Powering Up Britain". This is an ambitious plan by the UK government aimed at achieving four goals: energy security; consumer security; climate security; and economic security.

Accordingly, the Powering Up Britain plan comprises 12 clean energy solutions, including: building eight carbon capture and storage (CCUS) projects in the Northeast and Northwest; constructing small-scale nuclear power plants to increase nuclear power production from the current 15% to 25% of total domestic electricity production by 2050; operating a hydrogen-based economy; accelerating the deployment of renewable energy projects; reducing energy consumption by increasing energy efficiency in households and businesses; reducing reliance on fossil fuels for heating; lowering electricity bills; accelerating the process of project planning, licensing, and implementation of energy infrastructure development projects using the most modern low-carbon technologies such as solar and wind power; greening the economy and attracting financing for green energy; decarbonizing the transport sector; mobilizing private investment; increasing exports and strengthening institutions; Addressing the problem of future carbon leakage.

Regarding emissions reduction policy, the UK views net zero emissions not only as a necessary target to protect the future of our planet but also as a great opportunity to develop the country's economy. From 1990 to 2021, the UK cut emissions by 48%, decarbonizing faster than any other G7 country.

In December 2023, the Department for Energy Security and Net Zero released the UK's roadmap towards zero emissions as follows: All UK emissions will reach net zero by 2050; Public sector and government emissions monitoring and reporting are instrumental in helping the UK; The UK ensures it is on track to meet its climate commitments.

Trade Counsellor Hoang Le Hang also stated that the UK's CBAM (Carbon Border Adjustment Mechanism) is an important step towards achieving the UK's decarbonization goals and combating climate change. The CBAM sets a limit on the amount of carbon that products must meet to be allowed to be imported into the UK/EU. Accordingly, importers will have to report the amount of emissions contained in imported goods. If these emissions exceed the UK standard, the exporting company will have to purchase an "emissions certificate" at the current carbon price in the export market (UK). A carbon tax will be applied in the UK from 2027.

The UK's CBAM will apply to the sectors of industrial goods that use the most carbon and are imported into the UK, setting the highest carbon prices for products in the aluminum, cement, ceramics, fertilizer, glass, hydrogen, iron, and steel sectors. Among these, Vietnam has two key export items to the UK: ceramics and iron and steel.

“ Businesses need to prepare for the UK CBAM and maintain competitiveness in the UK market by: Conducting thorough assessments of their carbon emissions; Implementing measures to reduce their carbon emissions; Partnering with lower-carbon suppliers; Investing in cleaner technologies ,” advised Trade Counselor Hoang Le Hang.

Prospects for energy cooperation and emissions reduction between Vietnam and the UK.

According to First Secretary Hoang Le Hang, the UK is a leading country in clean energy development worldwide, so Vietnam can promote cooperation and learn from the experience of the UK and other developed countries in the transition to clean energy and renewable energy.

Accordingly, the UK was the first country in the world to enshrine a net-zero target (reducing greenhouse gas emissions to as close to zero as possible) in law and committed to a 100% reduction in greenhouse gas emissions by 2050. The UK's clean energy sector continues to thrive despite the difficulties faced by many European countries. In 2022, although natural gas remained the leading source of electricity, accounting for 38.5% of the UK's total electricity production, wind power set a new record, providing approximately 27% and ranking second, while nuclear power came in third, at 15.5%. The UK prioritizes the development of clean energy sources to ensure energy supply and national energy security.

Ms. Hoang Le Hang suggested that Vietnam could cooperate with the UK to train human resources in the clean energy sector, as the UK has leading universities in this field. At the same time, Vietnam could learn from the UK's methods of attracting investment from major players in the industry and developing industrial and supporting supply chains for renewable energy, preparing for the energy transition.

Like the UK, Vietnam has a well-developed oil and gas industry over the past several decades, but it will face declining oil and gas reserves in the future, while energy demand will increase to support economic growth. Developing clean energy will be both a challenge and a great opportunity for Vietnam in the coming years.

First Secretary Hoang Le Hang also stated that the UK and the rest of the G7 countries adopted the first JETP declaration, "Just Energy Transition Partnership," at the 26th United Nations Conference on Climate Change (COP 26) in Glasgow, UK, in 2021. This declaration aims to support Vietnam and several other countries (India, Indonesia, South Africa, etc.) in achieving a just energy transition. Participating partners committed to mobilizing an initial $15.5 billion over the next 3 to 5 years to address Vietnam's needs for a just energy transition. Of this, $7.75 billion will be mobilized by the International Partnership Group (IPG) with more attractive loan terms than the current capital market.

In addition, the Glasgow Financial Alliance for Net Zero Emissions (GFANZ) has mobilized at least $7.75 billion in private financing to directly support businesses through investments from international corporations and enterprises.

" The active and effective implementation of the JETP Declaration is one of the important solutions for the just 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 just energy transition; attract investment for renewable energy development, improve energy efficiency, and upgrade power grid infrastructure. Along with that, Vietnam will have more impetus to develop renewable energy centers 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