The reason G7 pledged $15.5 billion USD to assist Vietnam in its transition away from coal

Vietnam is the second largest power sector polluter in the region behind Indonesia (another target of JTEP efforts).

LITTLETON, Colo., Dec 14 (Reuters) - The Group of Seven (G7) industrialized nations have pledged $15.5 billion to help Vietnam transition away from coal, as part of a Just Transition Energy Partnership (JTEP) effort aimed at luring influential economies onto greener energy road maps.

There are several reasons why the G7 targeted Vietnam for special treatment, including that it was the ninth-largest coal consumer and relied on coal to produce roughly half of its electricity in 2021, according to the BP Statistical Review of World Energy.

Vietnam generates more than 50% of its electricity from coal.

Between 2017 and 2021, Vietnam's power sector emissions from burning fossil fuels jumped by 65.3% to more than 121 million tonnes of CO2 or equivalent gases, data from Ember shows.

That's the fastest growth in all of Southeast Asia and places Vietnam as the second largest power sector polluter in the region behind Indonesia (another target of JTEP efforts).

Vietnam is the 2nd largest but fastest-growing power sector emitter in Southeast Asia

What's more, Vietnam's power emissions have grown nearly three times faster than Indonesia's since 2017, putting Vietnam on track to overtake Indonesia before the end of the decade if the average power sector emissions pace of the past five years remains unchanged in both countries.

However, regarding the expanding reach, the Observatory of Economic Complexity reports that Vietnam's economy ranked as the 16th largest exporter in the world in 2020, while being the world's 41st largest economy (OEC).

In addition, hydropower already accounts for almost a third of Vietnam's total electricity production, and it can be quickly deployed to make up for the intermittent nature of other renewable energy sources.

That means Vietnam is in a good position to benefit fully from a timely energy system improvement that might maintain the country's economic momentum while also reducing its reliance on highly polluting coal.

In addition, due to its proximity to other fast-growing economies with similar ambitions to develop manufacturing hubs - including the Philippines, Thailand and Cambodia - any successful retooling of Vietnam's energy system can be used as a template elsewhere.

Source: Reuters