The transition toward a green and sustainable energy system is not merely a matter of technology or market dynamics. It is, above all, a process of institutional development. Over the past decade, Vietnam has gradually established a legal and policy framework aimed at promoting renewable energy, reducing emissions, and moving toward a low-carbon economy. These policies range from national renewable energy strategies and preferential electricity pricing mechanisms for wind and solar power to the development of a carbon market and biofuel programs.
The need to strengthen the legal framework has become even more urgent after Vietnam committed to achieving net-zero emissions by 2050 at COP26. This commitment requires a deep transformation of the national energy system and calls for close coordination between policy development, investment flows, and technological innovation. In this context, clear, transparent, and stable regulations are considered the foundation for turning climate commitments into practical actions.
One of the earliest major policy milestones in Vietnam’s energy transition was Decision No. 2068/QĐ-TTg issued in 2015, which approved the Renewable Energy Development Strategy to 2030 with a vision to 2050. This strategy established specific targets for the share of renewable energy in the national energy mix and provided direction for developing wind, solar, biomass, and biofuel resources. It also emphasized the gradual reduction of dependence on fossil fuels and encouraged financial and technological mechanisms to support clean energy development.
Building on this strategic foundation, Vietnam introduced a series of concrete policy mechanisms to attract investment into renewable energy. One of the most important tools was the Feed-in Tariff (FIT) mechanism, which guaranteed fixed electricity prices for renewable power projects.
In 2017, the government issued Decision No. 11/2017/QĐ-TTg on mechanisms to encourage solar power development in Vietnam. This regulation established a fixed electricity purchase price for grid-connected solar power projects, creating strong momentum for investment in renewable energy. The policy contributed significantly to the rapid expansion of solar power installations across the country.
Later, the policy framework was refined through Decision No. 13/2020/QĐ-TTg, which introduced additional mechanisms for rooftop solar systems and further clarified regulatory conditions for solar power projects. Alongside solar power, wind energy also received strong policy support. Decision No. 39/2018/QĐ-TTg amended earlier regulations and increased the feed-in tariff for wind power, making wind projects more financially attractive to investors. These policies helped Vietnam emerge as one of the fastest-growing renewable energy markets in Southeast Asia between 2018 and 2021.
Beyond individual policies for specific energy sources, Vietnam also developed a broader strategic framework for the national energy sector. Resolution No. 55-NQ/TW issued by the Politburo in 2020 on the orientation of Vietnam’s national energy development strategy to 2030 with a vision to 2045 marked a major step forward. The resolution emphasizes the need to strongly promote renewable energy development, improve energy efficiency, and gradually establish a transparent and competitive energy market.
Another key milestone was the approval of the country’s long-term electricity planning. In 2023, the Prime Minister issued Decision No. 500/QĐ-TTg approving the National Power Development Plan VIII (PDP8). This plan significantly increases the share of renewable energy in Vietnam’s electricity mix, particularly wind and solar power. It also outlines the development of emerging technologies such as offshore wind, green hydrogen, and energy storage systems.
In parallel with renewable energy development, Vietnam has also begun establishing policies to reduce greenhouse gas emissions and create a domestic carbon market. The legal foundation for this initiative was laid in the Law on Environmental Protection 2020, which introduced provisions on carbon market mechanisms and emission quota systems for the first time.
Following this law, the government issued Decree No. 06/2022/NĐ-CP on greenhouse gas emission reduction and ozone layer protection. This decree sets out the roadmap for establishing Vietnam’s carbon market, including greenhouse gas inventories, emission quota allocation, and the development of a carbon trading platform.
According to the current roadmap, Vietnam plans to pilot its carbon market starting in 2025 and gradually move toward full operation later in the decade. Once operational, the carbon market will help put a price on emissions, encourage businesses to invest in cleaner technologies, and create a new financial channel for green energy projects.
Biofuel policy also forms an important component of Vietnam’s energy transition strategy. The government previously introduced a national biofuel program through Decision No. 53/2012/QĐ-TTg, which established a roadmap for blending biofuels with traditional fossil fuels. By 2018, E5 biofuel gasoline had been widely implemented nationwide, marking an important step toward reducing dependence on conventional petroleum products.
In recent years, policy discussions have continued to focus on expanding the use of biofuels by increasing blending ratios, including the potential adoption of E10 gasoline. Such measures could support the development of the domestic ethanol industry, while also contributing to emission reductions in the transportation sector. Expanding the biofuel market is also expected to create additional value for agricultural products and strengthen green supply chains.
In addition to regulatory policies, Vietnam has implemented several financial incentives to encourage investment in renewable energy. Renewable energy projects benefit from corporate income tax incentives under Vietnam’s Corporate Income Tax Law, reductions in land-use fees, and access to green financing programs from both domestic and international financial institutions. These incentives help reduce upfront investment costs and make large-scale renewable energy projects more financially viable.
International cooperation also plays a significant role in Vietnam’s energy transition. The country is working with organizations such as GIZ, the World Bank, and the International Energy Agency to develop policy frameworks for green hydrogen, offshore wind power, and energy storage technologies. These partnerships provide not only technical expertise but also access to global climate finance.
Despite these developments, the legal framework for green energy in Vietnam still faces several challenges. One of the key issues is the lack of coordination and consistency among technical standards and regulations across different ministries and government agencies. This can create uncertainty for investors and complicate the implementation of new energy projects, particularly those involving emerging technologies such as green hydrogen or energy storage.
Administrative procedures also remain complex in some cases. Investors often need to go through multiple approval stages, including planning approval, environmental impact assessments, and grid connection procedures. Streamlining administrative processes and establishing more efficient approval mechanisms could help remove these bottlenecks and accelerate project development.
Another challenge lies in electricity transmission infrastructure. During the rapid expansion of solar and wind power in recent years, several regions experienced grid congestion because generation capacity grew faster than transmission infrastructure. This highlights the need to coordinate renewable energy expansion with grid modernization and the development of smart electricity networks.
Despite these obstacles, the transition toward clean energy in Vietnam appears irreversible. The combination of national strategies, market-based mechanisms such as the carbon market, and investment incentives is gradually building a solid foundation for a more sustainable energy system.
As global attention increasingly focuses on emission reduction and green economic development, energy policy has evolved beyond traditional power sector management and become a central pillar of national development strategy. With a policy framework that has been gradually developed since 2015, Vietnam is steadily building an ecosystem for clean energy development. This framework will play a crucial role in enabling the country to achieve sustainable growth and its net-zero emissions target in the decades ahead.
