HANOI, 31 OCTOBER 2026 — Vietnam is reviewing changes to its electricity-market framework as industrial exporters face increasing demands to demonstrate the emissions associated with their power consumption and manufacturing processes. The policy debate brings renewable electricity procurement, carbon reporting and the competitiveness of energy-intensive industries into closer alignment.
Reporting published on 30 October highlights the challenge for Vietnamese manufacturers: securing electricity that is both reliable and competitively priced while providing international customers with credible information about the carbon footprint of production.
The issue is particularly relevant to steel, cement and other energy-intensive sectors exposed to the European Union’s Carbon Border Adjustment Mechanism (CBAM) or to customer requirements for verified product carbon footprints. Vietnam is developing a domestic carbon market and considering changes to electricity legislation, but neither participation in a national carbon-trading system nor possession of a renewable electricity certificate automatically establishes eligibility for lower EU CBAM liabilities.
Proposed electricity reforms address direct power purchasing
Vietnam’s National Assembly is considering amendments to the Electricity Law intended to address constraints affecting power generation, grid investment and renewable electricity procurement.
Industry and Trade Minister Le Manh Hung presented elements of the proposed amendments on 20 October. The changes include refinements to the framework for direct power purchase agreements (DPPAs) and renewable energy certificates.
These instruments are becoming increasingly relevant to manufacturers supplying multinational companies that request evidence of electricity origin and emissions performance. Industrial consumers need predictable electricity supplies to maintain production schedules and delivery commitments, while international customers are placing greater emphasis on how power is generated and how its associated emissions are calculated.
The legislative challenge is to accommodate both requirements without introducing additional obstacles to electricity investment or industrial expansion.
Coal accounts for almost half of electricity generation and imports
Vietnam’s electricity mix remains heavily dependent on coal-fired generation. Figures reported by Vietnam Electricity (EVN) show that total electricity generation and imports reached approximately 265.79 TWh in January–September 2026.
Coal-fired plants supplied 132.63 TWh, equivalent to approximately 49.9% of the total. Hydropower contributed 68.48 TWh, or 25.8%, while other renewable sources generated 33.6 TWh, representing approximately 12.6%.
Gas-fired generation accounted for 20.48 TWh, and electricity imports reached approximately 10.3 TWh. Hydropower output was almost 9% lower year on year, reflecting less favourable hydrological conditions.
The generation figures illustrate the challenge of reducing emissions while meeting the electricity requirements of an expanding industrial economy. Manufacturers seeking lower-carbon power must consider renewable generation availability alongside grid constraints, contractual arrangements and the need for continuous supply.
Direct PPAs offer a route to renewable electricity procurement
Corporate power purchase agreements provide a commercial framework through which renewable generators and industrial consumers can establish longer-term electricity supply relationships. For manufacturers, these contracts may improve procurement predictability and support investment in cleaner generation.
Their contribution to emissions reporting, however, depends on the contractual structure and the methodology governing the calculation of electricity consumption and associated emissions.
Renewable electricity certificates can substantiate electricity-origin claims under an applicable reporting framework. They are not, by themselves, proof that electricity consumed in a particular production process qualifies for lower emissions treatment under every regulatory system.
This distinction is especially important under EU CBAM, where the treatment of electricity-related emissions varies according to the relevant product and sector. The conditions governing actual-emissions calculations for imported electricity are specific and should not be conflated with general corporate renewable-energy procurement.
Manufacturers producing CBAM-covered goods must therefore apply the emissions methodology relevant to their products rather than assume that a renewable electricity certificate automatically changes their regulatory emissions calculation.
Domestic carbon trading develops alongside electricity reform
Vietnam’s electricity-policy review is taking place as the country establishes its own carbon-pricing framework. A domestic carbon-trading platform opened on 29 June 2026, while the regulatory framework provides for a pilot emissions-trading phase before fuller implementation.
The initial coverage includes selected installations in thermal power, steel and cement. The pilot system provides for substantial free allocation of emissions allowances to help companies adapt to the administrative and financial requirements of carbon trading.
This approach can support the development of monitoring, reporting and verification capabilities without immediately imposing the full financial burden associated with more established carbon-pricing systems.
However, free allocation creates a distinction between the nominal market price of carbon and the effective cost actually borne by an installation. That distinction is relevant to EU CBAM because recognition of domestic carbon-pricing payments depends on qualifying costs incurred, rather than simply on the existence of a national emissions-trading scheme.
Vietnamese exporters may consequently strengthen their emissions-accounting systems as the domestic market develops, even before the scheme delivers substantial financial benefits through deductions for carbon costs paid domestically.
EU market access increases the importance of installation-level data
Vietnamese steel and cement manufacturers are among the industrial producers exposed to the EU’s existing carbon-border requirements. For covered goods imported into the European Union, importers must meet the applicable reporting and certificate obligations, while exporters may be required to provide detailed installation-level emissions data and supporting documentation.
These requirements can influence product pricing, commercial negotiations and supplier selection. Manufacturers able to demonstrate reliable emissions information and lower actual production emissions may be better positioned than competitors that cannot substantiate their production characteristics.
Nevertheless, stronger reporting systems do not automatically reduce embedded emissions or the carbon costs associated with imported goods. Those outcomes depend on production technology, energy consumption, relevant precursor materials and the applicable verification methodology.
Vietnamese manufacturers therefore need to distinguish between preparing the documentation required for compliance and achieving physical reductions in industrial emissions.
Lessons for Southeast European electricity markets
Vietnam’s policy debate also provides a point of comparison for Serbia, Montenegro and other Western Balkan markets, where industrial production and electricity exports are increasingly connected with European carbon-border requirements.
Expanding renewable electricity generation may support industrial competitiveness, but the commercial and regulatory benefits depend on the product concerned, the contractual arrangement and the applicable emissions methodology.
For electricity exporters, the requirements governing cross-border contractual evidence and eligibility to use actual emissions calculations differ from those applying to industrial manufacturers purchasing renewable electricity within their domestic markets.
That distinction is important when assessing renewable PPAs, guarantees of origin and factory-level emissions claims. These instruments and claims cannot be treated as interchangeable evidence under different regulatory frameworks.
Electricity regulation becomes a factor in export competitiveness
Vietnam’s proposed reforms illustrate the growing connection between electricity policy and international manufacturing trade. Reliable and affordable power remains fundamental to industrial production, but electricity origin, emissions measurement and contractual traceability are becoming additional considerations for exporters.
For policymakers, the task is to develop electricity and carbon-market rules that encourage industrial decarbonisation while maintaining conditions that support manufacturing investment. For lenders, investment in renewable generation, industrial electrification and emissions-monitoring systems requires an assessment of electricity prices, grid access and exposure to export-market requirements.
The proposed amendments to Vietnam’s Electricity Law have not yet been adopted. Their final provisions on direct power purchases and renewable electricity certificates remain subject to the legislative process.
Vietnam’s ability to combine affordable electricity, reliable supply and credible emissions information is becoming increasingly important as international customers incorporate carbon performance into industrial purchasing decisions.
