Vietnam Spurns Coal as Southeast Asia Aims to Kick Dirty Habit – EQ Mag Pro

Vietnam made a surprise commitment at the COP26 climate summit to stop building new coal power plants, as Southeast Asian nations once seen as growth markets for the fuel start to turn their backs on it.

Vietnam was a full signatory to a U.K.-backed pledge at the conference calling for countries to stop permitting and building new coal power plants, and to fully transition away from the fuel by the 2030s for major economies and by the following decade for developing countries.

The move, along with Vietnam’s pledge on Monday to reach net zero emissions by 2050, came as a surprise, said Caroline Chua, an analyst with BloombergNEF. Coal power has grown from about 18% of Vietnam’s total to more than 50% in the past decade.

“This really came out of nowhere,” Chua said. “Southeast Asian nations haven’t made as much progress in renewable technology, and power demand is expected to grow fast so they’ll add more and more emissions if an alternative solution to coal isn’t on the table. That’s why it’s crucial to address it now.”

The Philippines and Indonesia also signed onto the pledge, but with caveats. Neither agreed to halt new coal plant construction, and the Philippines refused to set a timetable for coal’s phase-out. Indonesia said it would consider accelerating its coal phase-out into the 2040s if it receives financial and technical assistance from abroad.

While not as bold as Vietnam’s pledge, it shows the countries are willing to move away from coal if they get international support, Chua said. Both countries were chosen as pilot partners for an Asian Development Bank program that would dedicate two multi-billion-dollar funds to invest in clean energy and retire coal plants early.

For all three countries, the next step will be seeing how the broad statements play out in specific policies. As recently as a few years ago, Southeast Asia was seen as one of the last major growth markets for coal.

Vietnam has been deliberating on a new national power plan for ages, recent drafts of which have called for continued coal power expansion.

Indonesia says shutting down coal power plants will need increased investment in renewable energy in addition to foreign finance and technology help. The country so far has identified about 9.2 gigawatts of power plants that can be retired earlier than 2030.

Source: Bloomberg