Vietnam Green Hydrogen Market Outlook to 2030

Vietnam Green Hydrogen Market Overview

• Vietnam Green Hydrogen Market was growing at a notable rate which is reflected in the global hydrogen market which was valued at USD 6 billion in 2023, driven by the increasing demand for clean and renewable energy sources, as well as significant investments in hydrogen production technology.
• Prominent players in the Vietnam Green Hydrogen Market include VinFast, PetroVietnam, EVN (Electricity of Vietnam), and BCG Energy. These companies are investing heavily in green hydrogen projects to capitalize on the burgeoning demand for renewable energy.
• In 2023, VinFast announced a partnership with Plug Power to develop a green hydrogen production facility in Hai Phong, with an initial investment of USD 150 million. This project aims to produce 5,000 tons of green hydrogen annually, significantly boosting the local supply and supporting the country's clean energy goals.

Vietnam Green Hydrogen Current Market Analysis

• Vietnamese government has introduced several initiatives to bolster the green hydrogen market. In 2023, the government launched the "Green Hydrogen Development Plan 2023-2030" with an allocated budget of USD 150 million to develop green hydrogen infrastructure, incentivize private sector investments, and foster international collaborations.
• The expansion of the green hydrogen market in Vietnam is having a significant impact on the country's energy landscape. It is helping to diversify energy sources, reduce reliance on fossil fuels, and lower greenhouse gas emissions. Additionally, it is creating new job opportunities and stimulating economic growth in the renewable energy sector.
• Northern region of Vietnam, particularly around Hanoi and Hai Phong, is dominating the green hydrogen market due to its industrial base and proximity to key infrastructure.

Vietnam Green Hydrogen Market Segmentation

By Technology: By technology, the Vietnam green hydrogen market is segmented into alkaline electrolyzer, PEM electrolyzer and solid oxide electrolyzer. In 2023, PEM Electrolyzer has been dominating the market. PEM technology is one of the most mature water electrolysis technologies, with a long history of development and commercialization. Therefore, PEM electrolyzers are more reliable and have lower technical risks compared to other technologies.

By Application: By application, the market is segmented into transportation, industrial and power generation. In 2023, Industrial segment dominates the market. Green hydrogen offers a clean alternative for industrial processes that currently rely on fossil fuels which is attractive to industries like steelmaking, fertilizer production, and refineries which can reduce their carbon footprint by adopting green hydrogen.

By End-User Industry: The market is segmented into government & utilities, commercial & industrial enterprises. In 2023, Government & Utilities segment is dominating the market.  Government and utilities lead due to extensive funding and initiatives to integrate green hydrogen into national energy grids for sustainability.

Vietnam Green Hydrogen Market Competitive Landscape

• In February 2024, VinFast officially broke ground on its first integrated electric vehicle (EV) manufacturing facility in Tamil Nadu, India. This significant development is part of VinFast's strategic plan to expand its global footprint and establish a robust presence in the burgeoning Indian EV market.
• PetroVietnam, the state-owned oil and gas corporation, is another major player investing heavily in green hydrogen. Recognizing the global shift towards sustainable energy, PetroVietnam has partnered with international energy giants like Shell to explore and develop green hydrogen projects.
• Electricity of Vietnam (EVN), the largest power company in Vietnam, plays a crucial role in the green hydrogen market through its focus on technological innovation. Their significant reduction in costs makes green hydrogen more competitive with traditional fossil fuels, facilitating wider adoption across various sectors.

Vietnam Green Hydrogen Industry Analysis

Vietnam Green Hydrogen Growth Drivers

• Expansion of Hydrogen Fuel Cell Vehicles (HFCVs) The adoption of hydrogen fuel cell vehicles (HFCVs) is gaining traction in Vietnam, driven by government initiatives to promote cleaner transportation solutions. In 2023, the Ministry of Transport announced plans to introduce 10,000 hydrogen-powered buses by 2030. This initiative is expected to significantly reduce CO2 emissions by 2 million tons annually, contributing to the country's climate goals.
• Integration with Renewable Energy Projects: The integration of green hydrogen production with renewable energy projects, such as wind and solar farms, is a key growth driver. BCG Energy’s acquisition of a 100 MW electrolyzer project in 2023 aims to utilize excess renewable energy for hydrogen production. This approach enhances the efficiency of renewable energy use and provides a sustainable solution for energy storage and grid balancing.
• International Financial Support and Investments: Vietnam is attracting significant international financial support and investments for its green hydrogen projects. World Bank has provided technical assistance to help Vietnam develop a clear strategy and roadmap for growing its hydrogen sector. This includes support for policy and regulatory frameworks, as well as capacity building to attract private investment in hydrogen projects.

Vietnam Green Hydrogen Market Challenges

• High Production Costs: Despite technological advancements, the production cost of green hydrogen remains high compared to conventional fuels. The current cost of green hydrogen production is approximately USD 4-6 per kg, significantly higher than the cost of hydrogen produced from natural gas, which is around USD 1-2 per kg. This price disparity poses a major challenge for the widespread adoption of green hydrogen, especially in cost-sensitive markets like Vietnam.
• Lack of Infrastructure: The development of infrastructure for the production, storage, and distribution of green hydrogen is still in its nascent stages in Vietnam. The country lacks a comprehensive hydrogen pipeline network and sufficient storage facilities. The lack of infrastructure could delay the deployment of green hydrogen projects by 2-3 years, impacting the market growth significantly.
• Limited Availability of Renewable Energy Sources: Green hydrogen production relies heavily on renewable energy sources such as wind and solar power. However, the availability of these resources can be limited due to geographical and climatic conditions. This limitation poses a challenge to scaling up green hydrogen projects.

Vietnam Green Hydrogen Government Initiatives

• National Strategy on Green Growth (2021): The National Strategy on Green Growth, launched in 2021, aims to increase the share of renewable energy, including green hydrogen, in Vietnam’s energy mix to 30% by 2030. This strategy includes various measures such as subsidies, tax incentives, and low-interest loans for green hydrogen projects.
• Vietnam Renewable Energy Development Strategy (2016-2030): This strategy outlines plans to develop renewable energy sources, including green hydrogen, to reduce greenhouse gas emissions and enhance energy security. The strategy aims to increase the renewable energy capacity to 45 GW by 2030, with a significant portion dedicated to green hydrogen production.
• Hydrogen Economy Roadmap (2022): The Hydrogen Economy Roadmap, introduced in 2022, provides a comprehensive framework for the development of the hydrogen sector in Vietnam. The roadmap includes targets for hydrogen production, infrastructure development, and market expansion.

Vietnam Green Hydrogen Future Market Outlook:

By 2028, the Vietnam Green Hydrogen Market is poised for substantial growth, driven by technological advancements, government support, and increasing demand for clean energy.

Vietnam Green Hydrogen Future Market Trends:

• International Collaborations and Investments Vietnam is witnessing increased international collaborations and investments in the green hydrogen sector. In 2022, PetroVietnam and Shell entered into a partnership to explore green hydrogen production, targeting 10,000 tons annually by 2025. Such collaborations bring in advanced technologies, expertise, and financial resources, accelerating the development of the green hydrogen market.
• Technological Innovations in Hydrogen Storage and Distribution Innovations in hydrogen storage and distribution technologies are playing a crucial role in the growth of the green hydrogen market in Vietnam. Companies are developing advanced storage solutions, such as high-pressure tanks and solid-state hydrogen storage, to enhance the efficiency and safety of hydrogen storage.
• Expansion of Hydrogen Fuel Cell Vehicles (HFCVs): The adoption of hydrogen fuel cell vehicles (HFCVs) is gaining traction in Vietnam, driven by the government’s push for cleaner transportation solutions. In 2023, the Ministry of Transport announced plans to introduce 10,000 hydrogen-powered buses by 2030.