This ambitious hydrogen strategy from Vietnam sends a clear signal to the global market: a new player is ramping up to claim a significant share of the burgeoning green hydrogen arena. But the path from ambition to reality is fraught with challenges, and the sector is watching closely to see how Vietnam navigates these hurdles.
Firstly, let’s consider the domestic implications. Vietnam’s current hydrogen demand, mainly from fertiliser production and oil refineries, is a mere fraction of the government’s 2030 target. To meet these goals, Vietnam must rapidly scale up production and create a comprehensive hydrogen infrastructure from scratch. This includes storage, transportation, and distribution systems, all of which require substantial investment and technological prowess.
The government’s recognition of the potential in both blue and green hydrogen is a pragmatic approach. Blue hydrogen, though not entirely clean, can serve as a transitional source while green hydrogen technology matures. Piloting hydrogen and ammonia cofiring in power generation is another strategic move that could pave the way for a more sustainable power sector.
However, the cost factor remains a significant barrier. The Vietnam Petroleum Institute’s findings—that clean hydrogen production is up to 2.1 times costlier than grey hydrogen—underscores the need for robust government policies to enhance cost competitiveness. This could come in the form of subsidies, tax incentives, or mandates for clean hydrogen adoption in industries.
Minh’s suggestion to involve traditional energy sectors like oil and gas in hydrogen production is shrewd. Leveraging existing expertise and infrastructure can streamline the transition and reduce initial costs. But it also requires a willingness from these sectors to pivot towards cleaner energy, which could be a challenge in itself.
Internationally, Vietnam’s move could ripple through the global hydrogen market. Collaborations with China could indeed reduce production costs, given China’s prowess in renewable energy technologies. But it also raises questions about technology transfer, intellectual property, and geopolitical dynamics.
Engagement with the EU, the US, and other hydrogen technology leaders could provide Vietnam with advanced technologies and access to global markets. However, it also means Vietnam will be competing with these established players, necessitating a strong value proposition to attract international investments and partnerships.
The ongoing and potential hydrogen production projects scattered across Vietnam indicate strong investor interest. But the success of these projects will hinge on clear investment policies, regulatory support, and infrastructure development. Delays or failures in these projects could deter future investments and tarnish Vietnam’s reputation in the global hydrogen market.
Moreover, Vietnam’s strategy could influence regional dynamics. Other Southeast Asian countries might follow Vietnam’s lead, sparking a regional race for hydrogen supremacy. This could drive innovation and competition, but also risks fragmenting the market and creating inefficiencies.
Lastly, Vietnam’s hydrogen ambitions align with global decarbonisation goals. If successful, Vietnam could become a case study for other developing nations aiming to transition towards clean energy while fostering economic growth. But if it falters, it could serve as a cautionary tale about the challenges of scaling up hydrogen production.
The global energy sector is in a state of flux, with renewables and clean technologies taking center stage. Vietnam’s hydrogen strategy is a bold move to secure a piece of this evolving pie. The coming years will reveal whether this bet pays off, and the market is watching with bated breath.
