In Vietnam, the hydrogen market is currently beginning to take shape. Although it is small and primarily focused on producing hydrogen for internal consumption, it is promising to gradually shift toward the goal of using hydrogen as an alternative raw material and fuel to reduce carbon emissions. Green hydrogen is viewed as a commodity, and the value chain of green hydrogen can be categorized into raw materials, production, storage, transportation, and market distribution.

Overview of the Hydrogen Market in Vietnam

According to the Ministry of Industry and Trade, hydrogen energy is considered a clean energy source that is indispensable in the energy mix of many countries to achieve carbon neutrality by 2050.

As outlined in the Draft Strategy for Hydrogen Energy Production by 2030, Vision to 2050, hydrogen in Vietnam is currently produced mainly from oil refining processes and fertilizer production to serve the operations of these industries by removing sulfur and other impurities such as nitrogen, oxygen, and metals from feedstocks or semi-finished products, catalytically reducing active metal oxides, or saturating unsaturated compounds (hydrogenation).

This hydrogen is referred to as gray hydrogen and brown hydrogen, with a total production output of about 500,000 tons per year (KTA) and prices ranging from 1 to 2.5 USD/kg. Among this, Vietnam’s hydrogen demand through the demand for hydrogen from PVN in 2020 supplied to fertilizer plants was about 316,000 tons of hydrogen, while the Dung Quat and Nghi Son oil refineries consumed approximately 39,000 tons and 139,000 tons per year, respectively. The total hydrogen demand is projected to increase to around 4,000 KTA by 2050[1].

Despite its potential, the hydrogen market in Vietnam faces several challenges. These include the need for substantial investments in infrastructure, technology development, and the establishment of regulatory frameworks to support the hydrogen economy. However, recent collaborations with international companies, such as Siemens Energy, signal growing interest and investment in the hydrogen sector. These partnerships are crucial for knowledge transfer and the implementation of advanced technologies that will be essential for the successful development of the hydrogen market.

Upcoming Trends and Case Study for the Hydrogen Market

The hydrogen market in Vietnam is set to grow rapidly, driven by several key upcoming trends. Firstly, there is a strong focus on green hydrogen production, utilizing the country’s abundant renewable energy resources, particularly solar and wind power. As advancements in electrolyzer technology reduce production costs, green hydrogen is becoming increasingly viable. Secondly, hydrogen is being integrated into industrial decarbonization efforts, with potential applications in sectors like steel, cement, and chemicals. Thirdly, Vietnam is exploring hydrogen-powered transportation, especially for long-haul and heavy-duty vehicles, where hydrogen fuel cells offer advantages over electric vehicles. Moreover, Vietnam’s proximity to hydrogen-importing countries like Japan and South Korea creates promising opportunities for regional hydrogen trade. These trends highlight a bright future for Vietnam’s hydrogen market, provided that infrastructure and policy support are established.

A recent case study in the Vietnamese hydrogen market is the collaboration between Bình Định Province and Siemens Energy on a green hydrogen gas system project on July, 2024. Following years of successful project implementation in Vietnam, Siemens Group leadership aims to contribute to the development of Binh Dinh Province, particularly by expediting the investment project for the green hydrogen gas system to regenerate energy and protect the environment, and they seek support from the provincial government in the near future. Stefan Becher, Director of Siemens Energy in Berlin, stated that he had researched and evaluated that Bình Định has very favorable conditions for development, especially the determination of provincial leaders to attract investment projects in clean energy[2].

Delegation of Binh Dinh province during the visit to Siemens Energy Group

Source: Investment Online

Potential for Development

The potential for the development of the hydrogen market in Vietnam is substantial, driven by several key factors.

Regarding government support, on February 22, in Hanoi, the Ministry of Industry and Trade organized a conference to implement the hydrogen energy development strategy of Vietnam by 2030, with a vision to 2050 (Hydrogen Energy Strategy), which has been approved by the Prime Minister in Decision No. 165/QĐ-TTg on February 7, 2024. The goal set in the hydrogen energy strategy is to develop Vietnam’s hydrogen energy ecosystem with the aim of achieving net-zero emissions by 2050, in line with Vietnam’s commitments to sustainable and equitable energy transition[3]. Those goals are as follows:

Source: Decision No. 165/QĐ-TTg

Regarding technology, advancements in electrolyzer efficiency and cost reduction are making green hydrogen production more viable. As Vietnam continues to invest in technological innovations, it can leverage its abundant renewable resources for sustainable hydrogen production. In terms of industrial decarbonization, the pressing need to reduce greenhouse gas emissions in sectors like steel, cement, and chemicals highlights hydrogen’s role as a cleaner alternative to fossil fuels.

Regarding regional trade opportunities, Vietnam’s strategic location near major hydrogen-importing countries, such as Japan and South Korea, positions it favorably to become a significant player in the regional hydrogen market. With these factors combined, Vietnam has the potential to develop a robust hydrogen market that contributes to both energy security and environmental sustainability.

Conclusion

The hydrogen market in Vietnam is at an early stage, but the potential for development is substantial. With its abundant renewable energy resources, strategic geographic location, and growing industrial base, Vietnam is well-positioned to become a key player in the global hydrogen economy. Upcoming trends such as technological advancements in hydrogen production, cross-border hydrogen trade, and decarbonization efforts in industry and transportation provide significant opportunities for Vietnam to scale up its hydrogen market.

While challenges remain, including the high costs of green hydrogen production and the need for supportive infrastructure and policy frameworks, Vietnam’s commitment to renewable energy and its strategic partnerships with international firms lay a strong foundation for future growth in the hydrogen sector. By focusing on green hydrogen production, developing export capabilities, and integrating hydrogen into its decarbonization strategy, Vietnam can unlock new economic opportunities and contribute to a cleaner, more sustainable global energy system.

[1] Electricity Regulatory Authority of Vietnam (2023). This energy source of the future is being actively developed in Vietnam. <Assess>

[2] Investment Online (2024). Binh Dinh works with Siemens Energy Group on green hydrogen gas system project. <Assess>

[3] Prime Minister (2023). Approving the Project on restructuring the Industry and Trade sector until 2030. <Assess>

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