Clean H2 for Hard-to-Abate Industries, PVI Report: Potential Development of Green Hydrogen in Vietnam - Opportunities & Challenges

Clean H2 for Hard-to-Abate Industries, PVI Report: Potential Development of Green Hydrogen in Vietnam - Opportunities & Challenges

Based on Presentation by Dr. Nguyen Huu Luong (Senior Hydrogen Researcher at Vietnam Petroleum Institute), June 27 2025 at our VAHC Seminar on Clean Hydrogen: Technology and Solutions for Hard-to-Abate Industries and Innovative Financing Solutions for Hydrogen projects.

Executive Summary

Vietnam recognizes green hydrogen (GH₂) as critical for achieving net-zero emissions (NZE) by 2050. With abundant renewable energy (RE) potential and strong policy frameworks, Vietnam targets 100–500 kilotons/year (KTA) of clean hydrogen by 2030 and 10–20 million tons/year (MTA) by 2050. However, high costs, immature technology, infrastructure gaps, and market creation pose significant challenges. Strategic priorities include pilot projects, policy incentives, international partnerships, and sector-specific decarbonization.

1. Global Role & Status of Green Hydrogen

Strategic Importance

• Energy Transition Enabler: GH₂ is vital for decarbonizing "hard-to-abate" sectors (shipping, steel, chemicals) where direct electrification is infeasible (IRENA, 2022).

• Key Applications:

  • Grid stabilization for RE integration.

  • Long-haul transport decarbonization (trucks, ships).

  • Industrial feedstock (e.g., steel, fertilizers, refining).

  • CO₂ transformation via co-feeding.

Global Progress

• National Strategies: 74 countries have published or drafted hydrogen strategies (INFINA, 2024), including major economies (EU, USA, Japan, China).

• Technology Maturity:

  • Mature: Aluminum production.

  • Prototype/Demo: Steel, chemicals, aviation, shipping (IRENA, 2022).

Development Challenges

• Cost Gap: GH₂ production costs ($4–6/kg) exceed fossil-based hydrogen ($1–2/kg).

• Infrastructure: Lack of pipelines, storage, and refueling networks.

• Carbon Pricing: Requires $50–200/ton CO₂e to bridge the cost gap (IRENA, 2020).

2. Vietnam’s GH₂ Landscape: Opportunities & Challenges

Policy Framework

• Decision 165/QD-TTg (2024): National Hydrogen Strategy (NHS) targets:

  • Production: 100–500 KTA (2030); 10–20 MTA (2050).

  • Infrastructure: Pilot refueling stations (2030); scaled supply chains (2050).

  • Focus: Full GH₂ value chain, prioritizing power, mobility, and industry.

• Power Development Plan (PDP VIII, 2023–2025): Mandates co-firing GH₂ in coal/LNG plants post-2035; full clean fuel transition by 2050.

• Decree 80/2024: Enables direct RE procurement for large users (>200,000 kWh/month), facilitating GH₂ production.

Opportunities

• RE Potential: 750 GW solar/wind capacity (650 GW offshore), enabling low-cost GH₂ production.

• Demand Sectors:

  • Oil Refining & Fertilizers: Existing gray H₂ use; gas shortages create GH₂ substitution opportunities.

  • Power: Co-firing potential in gas/LNG plants.

  • Steel/Cement: Critical for CBAM compliance in EU exports.

• NZE Contribution: GH₂ could deliver 4% of Vietnam’s CO₂ reductions by 2050 (VPI, 2024).

• International Support: Green funds, technology partnerships (e.g., Japan, EU).

Challenges

• Investment Needs: $1.4 trillion required for NZE transition (64% > baseline scenario).

• Technology Gaps: Immature GH₂ production, storage, and end-use applications.

• Infrastructure: Limited H₂ pipelines, storage, and refueling networks.

• Cost Barriers: High production costs and insufficient carbon pricing.

• Market Demand: Limited offtake certainty for GH₂.

GH₂ Hubs & CO₂ Sources

• Priority Regions: Red River Delta, North Central Coast (proximity to industrial emitters).

• High-Emitting Sectors: Steel (12 Mt CO₂/year), fertilizers (8 Mt), refining (6 Mt) (VPI, 2024).

3. Implementation Roadmap

Policy Actions

• Demand Creation: Carbon pricing, sectoral GH₂ mandates, NZE roadmaps.

• Supply Incentives: Tax breaks (FIT, CTD), RE access priority, subsidies.

• Standards: GH₂ certification, safety regulations, and value-chain standards.

Technology & Infrastructure

• Pilot Projects: Demonstrate GH₂ in refining, steel (DRI), and co-firing.

• Infrastructure:

  • Short-term: Repurpose gas pipelines/ammonia networks.

  • Long-term: Build H₂ valleys/hubs and refueling stations.

• R&D: International collaboration for technology transfer.

Sectoral Prioritization

Enterprise Strategies

• Conduct pilot tests with green funding.

• Integrate GH₂ into corporate decarbonization roadmaps.

• Advocate for supportive policies (subsidies, carbon pricing).

• Invest in "no-regret" options: RE procurement, efficiency upgrades.

• Forge partnerships for secure GH₂ supply chains.

Conclusion

Vietnam possesses significant advantages for GH₂ development: robust RE resources, clear policy targets, and high-emission industries needing decarbonization. However, success hinges on reducing costs via technology scaling, infrastructure investments, and carbon pricing. Strategic pilots in refining, power, and steel—supported by international finance and policy certainty—will accelerate market formation. With concerted action, GH₂ could underpin Vietnam’s transition to a NZE economy by 2050.

Sources: VPI (2022–2024), IRENA (2020–2022), INFINA (2024), Vietnamese Government Decrees (2023–2024).

Please write to contact@vahc.com.vn for the full presentation by Dr. Luong