Vietnam targets higher coal imports as domestic demand climbs

Vietnam has forecast a substantial increase in coal imports over the next 12-15 years, particularly from the power sector, on rising domestic demand, according to a draft strategy for the coal industry from the Ministry of Industry and Trade, or MoIT.

Under the proposed strategy posted Aug. 15, Vietnam will import 50 million-83 million mt/year coal over 2025 to 2035. The volume will gradually decline to about 32 million-35 million mt/year by 2045 to meet the government's 2050 net-zero pledge announced at the UN Climate Change Conference.

The draft strategy for the coal sector's development until 2030 and a vision through 2045 is currently available for comments until Sept. 3 and will be followed by a central government approval.

Vietnam imported 36.4 million mt coal in 2021, down 33.6% from 2020, according to the country's customs data. The MoIT said Vietnam's domestic coal consumption rose to 53.52 million mt in 2021 mainly from the power sector, from 27.8 million mt in 2011 and 38.77 million mt in 2015.

The country's coal demand is expected to reach a peak of 125 million-127 million mt in 2030, from about 94 million-97 million mt in 2025, aided by consumption from the power generation, cement, metallurgy, and chemical industries.

Coal demand is estimated to decline to 73 million-76 million mt/year by 2045, in line with the country's plan to meet emissions reduction targets.

The ministry in the draft strategy said that by 2030 about 85%-90% (39 million-42 million mt) of commercial coal will be allocated for power production to ensure national energy security.

Domestic production is expected to be about 47 million mt/year until 2030 and drop to 45 million mt/year over 2031-2045 due to energy transition.

State-owned Vinacomin and Northeast Corp. currently make up about 95% of the country's domestic coal production, with the remainder coming from PT Vietmindo, a joint venture between Indonesia and Vietnam.

Vietnam aims to launch a pilot project to produce coal from its Red River basin in the northern region by 2040, with a plan to commercially produce 1 million mt/year volume by 2045. The basin is estimated to have a potential reserve of 41.91 billion mt.

Vietnam also plans to export about 2 million mt/year of high-quality coal until 2030 that will double to 4 million mt/year by 2045.