Vietnamese exporters face dual challenge over power supply
Ensuring an adequate power supply remains critical as Vietnam's manufacturing and exports expand rapidly. However, some companies in global supply chains must also meet requirements on renewable electricity use and emissions. A draft amendment to Vietnam’s Electricity Law, now under consideration by the National Assembly, seeks to refine mechanisms to address these needs.
On October 20, at a working session of the National Assembly, the country's legislature, Minister of Industry and Trade Le Manh Hung presented a proposal to amend and supplement several provisions of the Electricity Law. The draft focuses on resolving bottlenecks in power generation and grid investment, while refining the framework for direct power purchase agreements (DPPAs) and renewable energy certificates.
The proposals come as businesses’ electricity needs evolve. National Assembly member Trinh Tu Anh, representing Lam Dong province, said many companies, particularly those participating in international supply chains, need not only reliable electricity at competitive prices but also proof of energy origin, renewable electricity usage, and emissions generated during production.
This presents the power sector with two parallel challenges: ensuring sufficient electricity to support economic growth and enabling businesses to access clean power and verify its use to meet customer requirements.
Reliable power supply remains an immediate priority
Vietnam’s manufacturing and export activities continued to expand strongly in the first nine months of 2026. Merchandise exports reached $434.3 billion, up 24.5% from a year earlier, according to the National Statistics Office. Industrial production rose 12.3%, while manufacturing and processing output increased 12.9%.
The expansion in manufacturing has been accompanied by a substantial rise in electricity demand.
The Ministry of Industry and Trade reported that commercial electricity consumption nationwide reached 237.19 billion kilowatt-hours (kWh) in the first nine months, up 9.66% year-on-year. Industry and construction accounted for 122.18 billion kWh, an increase of 8.32%, representing around 51.5% of total electricity sales.
Accounting for more than half of consumption, industry and construction remain the largest electricity-consuming sectors. For factories, a stable power supply is essential to keep production lines running, operate equipment and meet delivery schedules.
The ministry said the power system operated safely and reliably during the nine-month period, meeting demand from businesses and households. Maintaining supply over the longer term, however, will require coordinated development of generation capacity, transmission networks and grid dispatch capabilities.
According to Vietnam Electricity (EVN), total electricity generated and imported across the system reached 265.79 billion kWh in the first nine months. Coal-fired power contributed 132.63 billion kWh, or 49.9%, while hydropower generated 68.48 billion kWh, or 25.8%. Renewable energy sources, as classified by EVN, supplied 33.6 billion kWh, accounting for 12.6%. Gas-fired power contributed 20.48 billion kWh, while electricity imports totalled 10.3 billion kWh.
Hydropower output fell nearly 9% from a year earlier amid hydrological conditions affected by the El Niño phenomenon.
By contrast, coal- and gas-fired power together increased their share of total generation and imports to 57.6%, from 53.9% a year earlier, despite growth in other renewable energy sources. The shift towards a greater share of fossil fuels adds pressure to greenhouse gas emissions at a time when environmental requirements are becoming increasingly linked to manufacturing and export activities.
At the "Clean Energy for a New Era of Growth" forum held in Hanoi on October 27, Mai Duy Thien, chairman of the Vietnam Clean Energy Association, stressed the need to consider energy development in the context of economic growth and national competitiveness.
Clean energy development would not only help diversify supply but also enable businesses to adapt to increasingly stringent environmental standards, he said. This highlights the need to address energy security and the transition to cleaner electricity in parallel.
Clean electricity becomes a gateway to global supply chains
Renewable electricity requirements are already being incorporated into the supply-chain policies of multinational corporations, rather than remaining a trend expected to emerge in the future.
According to its 2026 Environmental Progress Report, Apple has incorporated a requirement for 100% renewable electricity into its Supplier Code of Conduct. The company requires its direct manufacturing supply chain to use 100% renewable electricity for Apple-related production by 2030.
According to the U.S. technology company, electricity consumption at supplier factories is the largest source of greenhouse gas emissions across its supply chain. Switching to renewable power is therefore a key component of its 2030 carbon neutrality goal.
Environmental requirements are also being considered as part of trade policy. In the United States, the proposed Clean Competition Act, introduced in Congress in December 2025, would establish a carbon border adjustment mechanism based on the emissions intensity of goods.
Meanwhile, the European Union entered the definitive phase of its Carbon Border Adjustment Mechanism (CBAM) on January 1, 2026, with the purchase and surrender of CBAM certificates scheduled to follow a phased timeline beginning in 2027. The mechanism covers products in six sectors: iron and steel, aluminium, cement, fertilizers, electricity and hydrogen.
Under the scheme, EU importers must fulfil obligations linked to emissions embedded in covered goods. Carbon costs could affect purchasing prices and the competitiveness of foreign producers, making emissions management an economic consideration as well as an environmental responsibility for businesses.
In Vietnam, demand for renewable electricity has already translated into actual transactions.
On June 1, 2026, Samsung Electronics Vietnam Thai Nguyen (SEVT) announced that it had implemented a direct power purchase agreement through the national grid, becoming the first corporate customer to complete a transaction under the DPPA mechanism.
The electricity supplied under the agreement comes from the TTC Duc Hue 2 solar power plant in Tay Ninh province, with expected output of around 70 million kWh a year.
The government established the DPPA framework under Decree 57/2025/ND-CP, which was subsequently amended and supplemented by Decree 243/2026/ND-CP. Current regulations have expanded participation to eligible electricity retailers operating in qualifying industrial and economic zones, creating additional arrangements for industrial customers to purchase renewable electricity.
Samsung’s case demonstrates that demand for renewable power has moved beyond commitments to actual transactions. It also raises questions about how the DPPA mechanism can be expanded to give more manufacturers access to clean electricity.
However, transactions conducted through the national grid require participants to account for network usage, dispatch, reserve capacity and other system services. How these costs are calculated and allocated directly affects companies’ overall electricity bills, as well as the interests of customers that do not participate in DPPAs.
This was among the issues the National Assembly’s Committee on Science, Technology and Environment called for clarification in its appraisal report on the draft Electricity Law amendments on October 20. The committee said DPPA participants should fulfil their cost obligations in full to prevent unreasonable cost transfers to other customers.
Beyond access to renewable electricity, businesses also need tools to verify the environmental attributes of the power they consume. Renewable energy certificates (RECs) serve this purpose, but their trading and use require reliable registration, verification and traceability mechanisms.
The draft amendments seek to establish a more complete legal framework for the REC market. The appraisal committee has called for clear rules on certificate ownership, trading and cancellation after use to prevent the same environmental attributes from being claimed more than once.
The issues under consideration therefore go beyond expanding the right to purchase renewable electricity. They also concern the overall cost of transactions and businesses’ ability to demonstrate that they use clean power - conditions that matter to companies seeking to meet environmental commitments made to international partners.
Reuters recently reported that the U.S.-China tariff war had helped accelerate the relocation of manufacturing to Vietnam. The expansion of export-oriented production has brought rising electricity demand. However, Reuters warned that the high share of coal-fired power in Vietnam’s electricity mix could pose an emissions challenge as international buyers increasingly scrutinize the carbon footprints of their supply chains.
For domestic companies seeking deeper integration into global supply chains, the ability to secure reliable electricity, manage emissions and meet partners’ environmental standards is likely to become increasingly important. These factors could increasingly influence the competitiveness of Vietnamese businesses as environmental requirements across global supply chains become more stringent.
Source: Vu Dang, Nguyen Quang
