As published in the March issue of Forbes

Viet Nam’s green transition is not only an environmental story. It is also a story about competitiveness.

Over the past decade, Viet Nam has become one of the most dynamic manufacturing hubs in the global economy. Its export-driven growth - rooted in electronics, textiles, machinery, and increasingly higher-value production - has been built on stability, global integration, and affordable energy.

That model is now evolving. Economic growth and the green transition are no longer parallel conversations, they are becoming one and the same.

With its commitment to reach net-zero emissions by 2050, the revised Power Development Plan, the issuance of a national Green Taxonomy, and the mobilization of US$15.5 billion under the Just Energy Transition Partnership (JETP), Viet Nam has sent a clear signal: future growth must be low-carbon driven. 

What matters now is how that direction is translated into action, how energy, finance, and industrial policy work together to strengthen productivity, protect natural assets, and improve quality of life. In this next phase, the green transition becomes more than an environmental objective. It has become part of the country’s long-term modernization.

The Structural Shift Underway

This next chapter is about transforming the energy system that powers Viet Nam’s industrial success.

Across global markets, sustainability standards are tightening. Carbon intensity is increasingly influencing trade relationships and investment decisions. Mechanisms such as the European Union’s Carbon Border Adjustment Mechanism (CBAM) - entering its definitive phase as of 1 January 2026 - illustrate how emissions profiles can shape market access and cost structures. With EU carbon prices hovering around €80 per tonne, Vietnamese exporters in sectors like steel and aluminum now face a choice: decarbonize production or accept significant 'carbon surcharges' that could erode existing trade advantages. 

For export-oriented economies, reliable and progressively cleaner electricity is becoming a core condition for market access and cost competitiveness. 

Viet Nam has already shown that it can move quickly. The rapid expansion of solar power between 2019 and 2021 demonstrated policy agility and strong investor response. At the same time, it revealed the practical challenges of transition at speed. In some regions, renewable curtailment has become common. In 2023, electricity shortages in parts of the north temporarily disrupted industrial activity, with economic impacts estimated at approximately US$1.4 billion or 0.3% of GDP.

These experiences do not weaken the case for transition. They clarify the requirements of the next phase. 
They remind us that ambition must be matched with system readiness – investment in transmission, storage, and flexibility that keeps reliability at the center of reform.

The goal is not simply to add renewable capacity. It is to build a power system that is clean, stable, and capable of supporting sustained growth.

Where Adjustment Will Be Felt

Transitions of this scale inevitably create points of adjustment.

In energy-intensive sectors and coal-dependent regions, change will be tangible. Some facilities will operate differently. Investment patterns will shift. Workers and communities will need support and clarity about what comes next.
In finance, access to capital is only part of the equation; confidence determines its cost. Investors assess regulatory predictability, currency exposure, and integration risks. Where uncertainty is reduced, borrowing becomes cheaper. Where it persists, clean energy projects become more expensive than they need to be.

In the labor market, demand is growing for engineers, digital specialists, and sustainability professionals. At the same time, manufacturers are responding to new expectations around carbon reporting and ESG standards. The green transition is therefore reshaping skills, education, and enterprise upgrading.

The central question is whether these adjustments are managed with foresight and fairness, ensuring that communities and workers are not left behind.

The Importance of Alignment

In this phase, alignment is everything.

Renewable expansion must advance in step with grid modernization and storage investment. Emerging carbon markets will need credible data systems to support trust, particularly as carbon metrics increasingly influence trade and investment decisions. Energy security considerations must be balanced carefully with long-term transition goals.

Climate finance commitments must also be translated into practical, investable frameworks. Where policies are clear and risks are well managed, capital flows more efficiently, and clean energy becomes more affordable.

When these pieces move together, the transition strengthens resilience rather than testing it.

Opportunity Beyond Energy

If approached strategically, Viet Nam’s green transition can further strengthen its position in the global economy.

Access to reliable and increasingly low-carbon electricity can enhance the country’s appeal to multinational firms by adapting to decarbonization requirements. Continued modernization of infrastructure supports productivity and reduces systemic vulnerability. The development of clear and credible sustainable finance frameworks can also help mobilize investment toward long-term, resilient assets.

At the same time, mitigation efforts will need to be complemented by sustained attention to adaptation. In climate-vulnerable regions such as the Mekong Delta, investments in resilience help safeguard agriculture, water systems, infrastructure, and livelihoods. In this sense, resilience and growth are closely connected, each reinforcing the other.

When economic competitiveness, environmental stewardship, and human wellbeing advance together, the transition can become a durable source of national strength.

A Transition That Includes Everyone

Sustainability is not only about emissions. It is also about people.

Workers in transitioning sectors need viable pathways forward. Small and medium enterprises require support to meet new standards. Young people and women should see opportunity in emerging green industries. The shift is already visible in the labor market: while traditional sectors face disruption, transportation and energy infrastructure development are projected to account for 80 percent of planned spending over the next half decade, necessitating a growing pipeline of STEM-literate workers to service investment planning. 

Cleaner energy brings cleaner air. Stronger ecosystems reduce long-term risks. More resilient infrastructure protects communities from climate shocks. These are not secondary benefits, they are part of development itself.

Looking Ahead

Viet Nam has demonstrated a clear commitment to advancing its green transition. The next phase will center on ensuring that ambition is accompanied by coordination, and that progress is sustained through stable and coherent implementation. An explicit focus on inclusiveness will be critical to sustaining public confidence and long-term results.

As economic growth, environmental stewardship, and social inclusion continue to advance in parallel, Viet Nam’s green transition can contribute not only to emissions reduction, but to a more competitive, resilient, and prosperous development pathway./.