Leaders from Vietnam and the International Partners Group, including the European Union, the United Kingdom, France, Germany, the United States, Italy, Canada, Japan, Norway and Denmark, today (December 14) agreed on a bold partnership for a just energy transition ( JETP).
The partnership will support Vietnam in achieving its ambitious Net Zero 2050 target, accelerating the peak of its greenhouse gas emissions and transition from fossil fuels to clean energy.
The JETP will initially mobilize $15.5 billion in public and private funding over the next 3 to 5 years to support Vietnam’s green transition.
The partnership will support Vietnam in pursuing a number of ambitious new goals:
- bringing forward the projected peak date for all greenhouse gas emissions in Vietnam from 2035 to 2030
- reducing annual peak emissions in the energy sector by up to 30%, from 240 megatons to 170 megatons, and bringing the peak date forward by five years to 2030
- limiting Vietnam’s maximum coal capacity to 30.2 gigawatts, down from the current planned figure of 37 gigawatts
- accelerating the adoption of renewable energy sources so that renewable energy accounts for at least 47% of electricity generation by 2030, compared to the current planned generation share of 36%
The successful achievement of these ambitious targets will result in savings of approximately 500 megatons (0.5 billion tons) of emissions by 2035.
The first contributions to Vietnam’s JETP include $7.75 billion in pledges from the IPG along with the Asian Development Bank and the International Finance Corporation. This is supported by a commitment to work to mobilize and facilitate a matching $7.75 billion in private investment from an initial set of private financial institutions coordinated by the Glasgow Financial Alliance for Net Zero (GFANZ), including Bank of America, Citi, Deutsche Bank, HSBC, Macquarie Group, Mizuho Financial Group, MUFG, Prudential PLC, Shinhan Financial Group, SMBC Group, Standard Chartered.
Over the next 12 months, Vietnam will work with the support of partner countries to develop and adopt the Vietnam JETP Resource Mobilization Plan, which will enable the implementation of the JETP funding and strategy.
Vietnam is the third country to launch a JETP, following the successful launch of South Africa’s JETP at COP26 and Indonesia’s JETP at this year’s G20 Leaders’ Summit. Vietnam’s JETP, a fast-growing economy, will demonstrate that economic growth can be decoupled from fossil fuel consumption.
Vietnam’s JETP builds on the UK-launched G7 Partnership for Global Infrastructure and Investment (PGII), which aims to narrow the infrastructure investment gap in developing countries. G7 leaders agreed in June 2022 to continue negotiations with several countries on JETPs, which are a core delivery mechanism of the PGII.
Ensuring that the transition from fossil fuels is ‘normal’ is at the heart of the JETP. A just transition will not only help Vietnam meet its climate targets, but also secure a resilient and prosperous future for its people, reduce the impact of pollution and support economic growth and job creation. It is vital that all civil society is involved in the green transition at all stages and that no one is left behind.
British Prime Minister Rishi Sunak said: The JETP model is a game changer in the fight against climate change – it uses international aid to unlock billions of dollars in private finance.
Vietnam is a dynamic, emerging economy in the heart of Southeast Asia. The investment we are making today means the country can reduce its emissions while creating new jobs and growth.
Together we ensure a cleaner, greener future for Vietnam and our planet.
Ursula von der Leyen, President of the European Commission, said: I am delighted that during this important week for EU-ASEAN relations, we concluded a new Just Energy Transition Partnership with Vietnam. With investments from international partners, Vietnam can boost renewable energy and increase its energy security and autonomy. We will help Vietnam start reducing greenhouse gas emissions five years ahead of schedule and dramatically reduce coal use. This partnership will help Vietnam build a 21st century energy sector, boost its economic growth and provide environmental and health benefits to its citizens.
Canada’s Prime Minister Justin Trudeau said, Just Energy Transition Partnerships are a model for how contributors can work with partners like Vietnam to take action for cleaner energy sources. Canada will continue to be a committed partner for Vietnam’s clean energy transition and coal phase-out, which is in all of our interests for an inclusive, clean energy future in the Indo-Pacific region.
French President Emmanuel Macron said: France and the European Union continued their strong commitment to climate change mitigation by supporting the acceleration of a just energy transition in Vietnam. France’s contribution, part of a long-standing bilateral cooperation, will support energy planning, capacity building and network development, in parallel with renewable energy development. Our collective contribution should support Vietnam’s commitment to a sustainable development trajectory, phasing out coal, to limit global warming to 1.5°C. This partnership should ensure a just transition that engages and benefits civil society.
German Chancellor Olaf Scholz said: The JETP with Vietnam will support ambitious climate targets and a significant increase in renewable energy by 2030 as a concerted effort to keep 1.5°C within reach. The partnership is about working hand in hand with Vietnam to ensure that the necessary transition will be just and inclusive. Germany will actively support Vietnam in achieving the newly set goals.
Japanese Prime Minister Fumio Kishida said: Japan supports Vietnam’s decarbonization through renewable energy projects and welcomes Vietnam’s ambition to further accelerate the just energy transition to net zero by 2050. Japan is proud to be a member of the Just Energy Transition Partnership , which will promote support for low-emission and climate-resilient development in Vietnam, in coordination with partner countries and with further involvement of the private sector.
Norwegian Prime Minister Jonas Gahr Støre said: Norway is proud to be part of the Just Energy Transition Partnership and to support Vietnam’s efforts to accelerate the energy transition. We believe this can mobilize much-needed private capital to accelerate the ambitious transition from coal to renewable energy.
United States President Joe Biden said: Today, Vietnam has shown leadership in charting an ambitious clean energy transition that will deliver long-term energy security. The United States is proud to be a partner in this effort. Vietnam’s historic commitment will catalyze investment and economic growth and create tremendous opportunities for the Vietnamese people while advancing the fight against the global climate crisis.
UN Secretary-General António Guterres said: With today’s agreement, Vietnam is preparing a new framework of cooperation to achieve a fair, inclusive energy transition to renewable energy. These partnerships are a critical tool to unlock the emissions reductions our world needs in the 2020s.
We need all hands on deck to deliver an energy transition that is global, sustainable, equitable, inclusive and just. The United Nations stands ready to continue to support these partnerships and all other cooperative efforts.
Successful achievement of these ambitious targets will result in a cumulative reduction of approximately 200 megatons of greenhouse gas emissions by 2030, and an additional 300 megatons by 2035, saving a total of approximately 500 megatons or half a gigatonne of cumulative emissions from the JETP out through 2035, with further savings afterwards.