Vietnam is reviewing changes to its electricity-market framework as industrial exporters face increasing demands to demonstrate the emissions linked to power consumption and manufacturing processes. The policy debate is bringing renewable electricity procurement, carbon reporting and the competitiveness of energy-intensive industries into closer alignment.
Reporting published on 30 October highlights a 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 relevant for 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. However, neither participation in a national carbon-trading system nor possession of a renewable electricity certificate automatically establishes eligibility for lower EU CBAM liabilities.
Electricity Law amendments on direct power purchasing and certificates
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 more relevant for 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. International customers are placing greater emphasis on how power is generated and how its associated emissions are calculated, while the legislative process aims to avoid additional obstacles to electricity investment or industrial expansion.
Vietnam’s generation mix remains dominated by coal
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.
Role of PPAs, certificates and CBAM-linked emissions methods
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.
The contribution of such arrangements to emissions reporting depends on the contractual structure and the methodology governing calculation of electricity consumption and associated emissions. Renewable electricity certificates can substantiate electricity-origin claims under an applicable reporting framework.
Certificates are not, by themselves, proof that electricity consumed in a particular production process qualifies for lower emissions treatment under every regulatory system. Under EU CBAM, treatment of electricity-related emissions varies by product and sector, and conditions for actual-emissions calculations for imported electricity are specific.
Manufacturers producing CBAM-covered goods are therefore expected to 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 pilot runs alongside power reforms
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, alongside a pilot emissions-trading phase before fuller implementation.
The initial coverage includes selected installations in thermal power, steel and cement. The pilot system provides substantial free allocation of emissions allowances intended to help companies adapt to administrative and financial requirements of carbon trading.
The approach is described as supporting development of monitoring, reporting and verification capabilities without immediately imposing the full financial burden associated with more established carbon-pricing systems. Free allocation also creates a distinction between nominal market price of carbon and the effective cost borne by an installation.
This 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. As the domestic market develops, Vietnamese exporters may strengthen their emissions-accounting systems even before substantial financial benefits arise through deductions for carbon costs paid domestically.
EU access requires installation-level data for steel and cement
Vietnamese steel and cement manufacturers are among industrial producers exposed to EU carbon-border requirements. For covered goods imported into the European Union, importers must meet applicable reporting and certificate obligations.
Exporters may be required to provide detailed installation-level emissions data and supporting documentation. These requirements can affect product pricing, commercial negotiations and supplier selection, with manufacturers able to demonstrate reliable emissions information potentially better positioned than competitors that cannot substantiate production characteristics.
Stronger reporting systems do not automatically reduce embedded emissions or carbon costs associated with imported goods. Outcomes depend on production technology, energy consumption, relevant precursor materials and the applicable verification methodology.
Implications for Southeast Europe’s power-export links
Vietnam’s policy debate is also presented as 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 generation may support industrial competitiveness, but benefits depend on product scope, contractual arrangements and applicable emissions methodology.
For electricity exporters, requirements governing cross-border contractual evidence and eligibility to use actual emissions calculations differ from those applying to industrial manufacturers purchasing renewable electricity within domestic markets. This distinction affects assessment of renewable PPAs, guarantees of origin and factory-level emissions claims under different regulatory frameworks.
Electricity policy ties into export competitiveness as reforms await adoption
The proposed reforms illustrate a growing connection between electricity policy and international manufacturing trade. While reliable and affordable power remains fundamental for industrial production, electricity origin, emissions measurement and contractual traceability are becoming additional considerations for exporters.
The proposed amendments to Vietnam’s Electricity Law have not yet been adopted. Final provisions covering direct power purchases and renewable electricity certificates remain subject to the legislative process.
The ability to combine affordable electricity, reliable supply and credible emissions information is described as increasingly important as international customers incorporate carbon performance into industrial purchasing decisions.