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Rich Nations Struggle to Seal New Energy Deal With Vietnam

No agreement with Vietnam by the middle of next month would be seen as a major blow to UN and the G7 in the fight against climate change


Western nations are struggling to finalise a deal with Vietnam after pledging billions to help the Southeast Asian country cut carbon emissions.
Power-generating turbines are pictured at a wind farm in Vietnam's Bac Lieu province. File photo: Reuters.

 

Western nations are struggling to finalise a deal with Vietnam after pledging billions to help the Southeast Asian country cut carbon emissions.

Vietnam is set to receive $8.5 billion investment from the UK, France, Germany, the US, and the EU to accelerate its transfer to clean energy.

But the deal is being held up by domestic politics, according to Western sources, with Vietnam deterred by a fund largely made up of loans and a lesser amount of grants.

 

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“We are quite far away from an agreement,” a Western official said, noting that talks in Hanoi last week between a delegation of EU experts and their Vietnamese counterparts failed to achieve a breakthrough.

A second source confirmed it was uncertain whether progress could be made in time for the COP27 global climate summit in Egypt, which is due to begin on November 6.

No agreement with Vietnam by the middle of next month would be seen as a major blow to UN and the G7 in the fight against climate change.

 

Fight Against Coal

Vietnam is among the world’s top 20 consumers of coal, and its carbon emissions are expected to increase exponentially as the country of 100 million people grows quickly.

At last year’s COP26 climate summit, Vietnam committed to phasing out coal-fired power by 2040 – a plan that would, however, require significant investment and the support of wealthier nations.

The European Commission, the EU executive, declined to comment on the matter. The EU is leading, together with Britain, the talks with Vietnam on behalf of G7 donors.

Vietnam’s government did not respond to requests for comment.

 

Internal Division

The EU official said talks were hampered by internal devisions in Vietnam.

“Some forces” in Vietnam were resisting the transition away from coal, US Special Presidential Envoy for Climate John Kerry told a news briefing this week, warning that countries that did not move faster “are really going to fall behind economically”.

The deal features support for Vietnam’s power grid to reduce leaks, the building of more offshore wind farms and hydropower infrastructure, and the expansion of rail networks in big cities as an alternative to cars and motorbikes.

But Vietnamese negotiators have shown little interest in foreign investment in the power grid and wind energy, the source said.

A deal was expected to be reached by the COP27 summit, according to the sources and internal EU documents.

 

  • Reuters, with additional editing from Alfie Habershon

 

 

Read more:

Vietnam Proposes Fuel Tax Cut to Combat Inflation

Apple Supplier Foxconn in $300m Plant Expansion in Vietnam

Vietnam Plans to Double Wind Power With $13bn US Project

 

 

 

Alfie Habershon

Alfie is a Reporter at Asia Financial. He previously lived in Mumbai reporting on India's economy and healthcare for data journalism initiative IndiaSpend, as well as having worked for London based Tortoise Media.

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