Vietnam accelerates coal imports as demand peaks in 2030

VCN- In order to meet coal demand for production, Vietnam is predicted to import about 50-83 million tons in the 2025-2035 period and gradually reduce it to about 32-35 million tons in 2045.
Illustration Photo: Nguyễn Thanh
Illustration Photo: Nguyễn Thanh

The Ministry of Industry and Trade has recently issued a draft Strategy for the development of Vietnam's coal industry. Currently, the coal industry consists of two main coal production units, namely Vietnam Coal - Mineral Industries Group and Dong Bac Corporation, accounting for about 95% of the total coal output of the whole industry.

The data shows that domestic coal consumption increased rapidly from 27.8 million tons in 2011 to 38.77 million tons in 2015 and about 53.52 million tons in 2021. Thus, the volume of coal consumed now rises more than twice as much as in 2011; in which, mainly coal for power production with an increase of nearly 4 times and accounts for a high proportion in the structure of coal-consuming households.

Vietnam is in need of primary energy especially since coal demand will be higher, peaking in the 2030-2035 period. After that, demand will gradually decrease as many coal-fired power plants will stop operating after 2035 which is in line with the energy sector development roadmap.

It is forecast that Vietnam's coal demand will range from 94-97 million tons in 2025 and peak at about 125-127 million tons in 2030. Thus, in the 2025-2035 period, coal demand will be up from 94 to 127 million tons/year, mainly due to more demand for power generation and economic sectors such as cement, metallurgy and chemicals. After that, coal demand will gradually fall, to about 73-76 million tons by 2045.

Meanwhile, domestically produced commercial coal only maintains about 45-47 million tons/year in the 2025-2035 period and gradually decreases to 42-44 million tons/year in 2045.

Therefore, to meet the demand for coal for production, Vietnam is expected to import about 50-83 million tons in the 2025-2035 period and gradually reduce it to about 32-35 million tons in 2045.

According to the Ministry of Industry and Trade, the potential of coal resources is limited. On the other hand, the limitation in exploration in addition to harder mining conditions due to deeper further mining sites lead to higher coal production costs and coal product prices.

Besides, the coal industry cannot suddenly increase mining output and depends heavily on natural factors. Mining enterprises also face a labor shortage due to the harsh environment and health effects. At the same time, the trend of energy transformation in the coal industry also requires reducing mining output or switching to products with fewer emissions.

In order to ensure the development of the coal industry, in terms of mechanisms and policies, the draft clearly states: The State organizes an investigation and assessment of the Red River coal basin and a number of other coal basins in the continental shelf of Vietnam to ensure requirements for exploration and development of coal mining projects; promulgate appropriate mechanisms and policies to attract more investment in coal exploration and exploitation abroad; seek and diversify sources of imported coal to Vietnam to serve domestic demand.

Localities with coal resources shall promulgate mechanisms and policies to support coal industry units in site clearance and resettlement for exploration and exploitation.

The Ministry of Industry and Trade proposed the Government direct and regulate the selling price of domestically produced coal in accordance with the market mechanism which covers actual production and business costs and ensures reasonable profit for sustainable development of enterprises; promulgate a coal price index in imported coal transactions in line with Vietnam's regulations and international practices.

Regarding the coal market in the period to 2030, most domestic coal will be given priority to power production to ensure national energy security, accounting for about 85-90% (equivalent to 39-42 million tons) of total coal production.

Vietnam is predicted to import the most coal about 80 million tons by 2030. During this period, Vietnam gradually forms a coal market with various sellers and buyers, diversify coal sources and charcoal providers.

By Thanh Nguyễn/ Thu Phuong

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