Vietnam is reviewing changes to its electricity-market framework as industrial exporters face growing demands to document emissions linked to power consumption and manufacturing processes. The policy discussion connects renewable electricity procurement, carbon reporting and the competitiveness of energy-intensive industries.
Reporting published on 30 October describes a challenge for Vietnamese manufacturers: obtaining electricity that is reliable and competitively priced while providing international customers with credible information on the carbon footprint of production. The issue is tied to sectors including steel and cement, which are exposed to the European Union’s Carbon Border Adjustment Mechanism (CBAM) and to customer requirements for verified product carbon footprints.
Vietnam is developing a domestic carbon market and considering changes to electricity legislation. However, participation in a national carbon-trading system or holding a renewable electricity certificate does not automatically establish eligibility for lower EU CBAM liabilities.
Electricity Law amendments under consideration
Vietnam’s National Assembly is considering amendments to the Electricity Law aimed at addressing 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 proposed changes include refinements to the framework for direct power purchase agreements (DPPAs) and renewable energy certificates. These instruments are described as increasingly relevant for manufacturers supplying multinational companies that request evidence of electricity origin and emissions performance.
The legislative challenge is to align electricity procurement needs with international reporting expectations without adding obstacles to electricity investment or industrial expansion. Industrial consumers are described as requiring predictable electricity supplies to maintain production schedules and delivery commitments.
Vietnam’s generation mix and implications for supply contracts
Vietnam’s electricity mix remains heavily dependent on coal-fired generation. Vietnam Electricity (EVN) reported 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 (25.8%), while other renewable sources generated 33.6 TWh, representing about 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.
DPPAs, certificates, and emissions accounting for CBAM-covered goods
Corporate power purchase agreements provide a commercial framework through which renewable generators and industrial consumers can establish longer-term electricity supply relationships. For manufacturers, such contracts may improve procurement predictability and support investment in cleaner generation.
The reporting value of these arrangements depends on the contractual structure and the methodology used to calculate electricity consumption and associated emissions. Renewable electricity certificates can substantiate claims about electricity origin under an applicable reporting framework, but they do not by themselves prove that electricity used in a particular production process qualifies for lower emissions treatment under every regulatory system.
This distinction is particularly relevant under EU CBAM because treatment of electricity-related emissions varies by 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 are therefore required 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 alongside power-market 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, with a regulatory framework providing 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 intended to help companies adapt to administrative and financial requirements associated with carbon trading.
The approach is described as supporting 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 the 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. Vietnamese exporters may strengthen their emissions-accounting systems as the domestic market develops even before substantial financial benefits arrive through deductions for carbon costs paid domestically.
Installation-level data requirements for EU imports
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, while exporters may be required to provide detailed installation-level emissions data and supporting documentation.
The requirements can affect 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.
Stronger reporting systems do not automatically reduce embedded emissions or carbon costs associated with imported goods. Those outcomes depend on production technology, energy consumption, relevant precursor materials and the applicable verification methodology.
The documentation needed for compliance must be distinguished from physical reductions in industrial emissions, according to the reporting.
Regional relevance for Western Balkan power exports
Vietnam’s policy debate is 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 commercial and regulatory benefits depend on the product concerned, 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 applies when assessing renewable PPAs, guarantees of origin and factory-level emissions claims under different regulatory frameworks.
Electricity policy links to export competitiveness
The proposed reforms illustrate a growing connection between electricity policy and international manufacturing trade. Reliable and affordable power remains fundamental for industrial production while electricity origin, emissions measurement and contractual traceability become additional considerations for exporters.
The Electricity Law amendments have not yet been adopted, leaving final provisions on direct power purchases and renewable energy certificates subject to the legislative process. Vietnam’s 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.