Vietnam’s U-Turn on Coal Reflects Energy Reality
by Vijay Jayaraj
Ever since signing the Paris climate agreement, Vietnam has shown interest in reducing its dependency on fossil fuels, introducing in recent years a slew of measures to cut consumption.
However, in what is considered to be a major U-turn, Vietnam’s government announced last month that it will increase coal imports for the next 13 years.
Critics of fossil fuels, including most mainstream media, are out of sync with the world’s energy realities. They are consistently premature in their celebrations of the emission-reduction promises of developing nations like Vietnam only to see commitments yield to the need to meet growing energy demand with coal, oil and natural gas. Even developed economies like Germany and the UK have ditched — or suspended — grandiose plans for “carbon-free” utopias to fend off social unrest or economic collapse.
In a new strategy drafted to develop the coal sector, Vietnam’s Ministry of Industry and Trade says that it will increase annual coal imports to as much as 83 million tons during 2025-35.
This decision is a marked departure from ambitious emission-reduction plans that the country seemed keen to embrace, thus delivering another blow to the international campaign against fossil fuels.
Vietnam’s consumption of coal has increased rapidly in the last decade largely to generate electricity — from 27.8 million tons in 2011 to 38.77 million tons in 2015 and 53.52 million tons in 2021. Demand for coal is projected to peak at 125-127 million tons in 2030, mainly due to growing needs in power generation and in the cement, metallurgy and chemical industries.
For countries like Vietnam, there is no option but to increase fossil fuel consumption in the coming decades. Coal, oil, and gas together represent the most affordable, dependable, and abundant source of energy. In fact, a majority of the world’s primary energy comes from these fuels.
The favored technologies of climate alarmists — wind and solar — cannot meet energy needs of large populations. What little electricity they do produce is intermittent and expensive. So, developing countries cannot reduce fossil fuel consumption without a significant compromise in power reliability and economic growth. The consequences of energy shortages due to the anti-fossil fuel stance is greater in developing countries where poverty is still rampant.
Coal consumption correlates closely to Vietnam’s growth in gross domestic product (GDP). The doubling of consumption between 2011-21 tracks with a steady increase in the rate of growth over the same period.
Though correlation does not necessarily mean causation, we have observations that show GDP growth across the world has been driven by a growing energy sector’s dependence on fossil fuels. Vietnam realizes this and knows that only coal can sustain the kind of growth expected for the future.
As per the most recent World Bank economic assessment, Vietnam’s “GDP growth is anticipated to soar from an estimated 2.6 percent in 2021 to 7.5 percent in 2022.” Vietnam, the Philippines and Indonesia are projected to be the the fastest-growing economies in the Association of Southeast Asian Nations (ASEAN).
If projected growth rates are to become reality, Vietnam would need to continue using fossil fuels without restrictions. Being a top-performing ASEAN economy is, in fact, an impossible feat unless fossil fuels are employed.
Vietnam’s case is just one of the many stories emerging across the world. The shortage of Russian gas made many European nations go back to coal. The UK leadership has said that it will soon end a ban on fracking for natural gas. Both China and India have announced new increases in coal production. Multiple countries in South America and Africa are expected to start producing oil and gas from new fields in the coming years.