Vietnam’s coal sector is defined less by the size of its mines than by the speed of its electricity demand growth. The country has become a major manufacturing base for electronics, textiles, machinery and other export industries, creating a constant need for dependable power. Coal-fired generation expanded rapidly because it could provide large volumes of electricity while factories, cities and transport systems increased consumption.
Coal supplied about half of Vietnam’s electricity during much of 2024, and its share reached 56.5% in the first quarter of 2025. This made it the largest single source of generation despite strong additions of solar, wind and hydropower capacity. The dependence became especially visible after power shortages in 2023 and periods of weak hydropower output. System planners placed greater emphasis on stable thermal generation to reduce the risk of further disruption.
Vietnam wants to maintain industrial growth and prevent shortages, but it has also committed to net-zero emissions by 2050 and joined a Just Energy Transition Partnership intended to support cleaner power development. Coal remains central to near-term reliability even as national policy describes a long-term move away from it.
Quang Ninh Remains the Mining Center, but Domestic Output Is Not Enough
Vietnam has a long-established coal industry concentrated in the northern province of Quang Ninh. The region contains most of the country’s production and supports mines, processing facilities, ports, engineering companies and communities with strong economic links to the sector. Vietnam National Coal and Mineral Industries Holding Corporation, usually known as Vinacomin or TKV, is the dominant state-owned producer.
Domestic mines mainly produce anthracite and other grades suited to specific industrial and power uses. As accessible deposits decline and operations move deeper underground, costs and technical demands increase. Expanding output quickly enough to match power-sector demand is therefore difficult.
Vinacomin planned to produce more than 38 million tonnes of raw coal in 2025 while also importing 13.2 million tonnes for blending and resale. National plans indicated approximately 37 million tonnes of clean coal production against domestic demand of roughly 50 million tonnes. The gap shows that Vietnam’s coal system can no longer be understood as a domestic mining industry alone.
Quang Ninh will remain important because it combines production expertise with ports and processing infrastructure. Its future is increasingly tied to handling and blending imported coal as well as extracting local reserves.
Imported Coal Has Become an Energy-Security Requirement
Vietnam imported 63.82 million tonnes of coal in 2024, and imports reached another record in 2025. Indonesia is the leading supplier because its thermal coal is competitively priced, geographically close and eligible for favorable tariff treatment within ASEAN. Australia is another major source, providing coal with different qualities for power plants and industrial customers. Russia and other suppliers add diversity.
In the first quarter of 2025, Vietnam imported nearly 17.3 million tonnes at a cost of about $1.8 billion. Lower international prices reduced the value of the purchases even as volumes increased. For utilities, cheaper seaborne coal helped contain generation costs while demand remained high.
Import dependence creates new risks involving vessels, port capacity, foreign exchange and supplier relationships. Prices can change quickly, while congestion, extreme weather or shipping disruption can affect deliveries. Imported fuel may also require blending with domestic coal to meet plant specifications.
The government’s continuing focus on imported supply for 2026 and later years shows that this is now a structural requirement rather than a temporary response. Indonesia and Australia are likely to remain central, but Vietnam has an incentive to maintain a wider supplier base and improve port, storage and blending systems.
Coal Plants Provide Stability to a Power Grid Under Pressure
Vietnam had roughly 27 GW of operating coal-fired capacity in early 2025, representing close to two-fifths of installed generation capacity. Major plants are distributed across northern, central and southern regions, including large complexes at Vinh Tan, Duyen Hai, Mong Duong, Hai Phong, Thai Binh and Vung Ang. Their locations reflect access to demand centers, domestic coal fields or seaborne imports.
The plants are important because Vietnam’s grid must absorb fast growth from both electricity demand and variable renewable generation. Solar and wind capacity expanded quickly under earlier incentive programs, but transmission construction did not always keep pace. Congestion has forced renewable curtailment in some areas, while the north has faced tighter power balances and strong industrial demand.
Coal generation can be scheduled more directly than solar or wind, but many units were designed for steady baseload operation rather than rapid changes in output. Flexible operation can increase maintenance and reduce efficiency, while plant reliability also depends on ports, stockyards and transport links.
The Revised Power Development Plan VIII places major emphasis on expanding 500 kV and 220 kV transmission. A stronger north–south grid, more storage and better market rules would allow Vietnam to use renewable generation more effectively and reduce the need to operate coal plants because cleaner output cannot reach demand centers.
New Projects Extend Coal Dependence Beyond the Present Decade
Vietnam’s revised power plan, approved in April 2025, continues to allow completion of coal plants already under construction or advanced in development. Projects representing roughly 4 GW of additional capacity have been moving through construction, enough to increase the national fleet materially. These units are intended to support electricity demand during a period of ambitious economic expansion.
The policy does not represent an open-ended return to unrestricted coal development. Vietnam has stated that it will not build new unabated coal projects beyond those already included in its planning framework. It is also considering the retirement of about 540 MW at older plants such as Pha Lai and Ninh Binh if they cannot meet efficiency and emissions requirements.
The more difficult issue is the age of the fleet. Many plants are relatively new and supported by power-purchase agreements, debt obligations, fuel contracts and local employment. Early retirement would require compensation, refinancing or conversion rather than a simple closure decision.
Some scenarios consider converting suitable plants to biomass, ammonia or other lower-carbon fuels. These options may preserve infrastructure, but their scale, fuel availability and cost remain uncertain. Near-term efficiency improvements may be more achievable than full conversion.
Vietnam’s Coal Transition Depends on Building the Replacement System
Vietnam’s long-term coal strategy cannot succeed through plant closures alone. The country must build enough reliable replacement generation while expanding transmission, storage and market flexibility. Offshore wind, utility-scale solar, hydropower, gas, electricity imports and eventually nuclear power all appear in the wider development plan, but each carries financing, permitting or construction challenges.
The $15.5 billion Just Energy Transition Partnership can support investment and reform, although Vietnam’s power-system needs are much larger. Private investors also require bankable tariffs and confidence that projects can connect to the grid.
Coal demand may continue rising in the near term as new units enter service and manufacturing output expands. The International Energy Agency expected Vietnam to be one of the main drivers of higher ASEAN coal demand in 2026. That outlook can exist alongside a longer-term decline if clean generation and grid infrastructure expand quickly enough later in the decade.
Vietnam’s coal future is therefore shaped by timing. Coal remains a tool for preventing shortages and supporting industrial growth today. Its eventual reduction will depend on whether the country can construct a larger, more flexible and financially sustainable power system before existing coal assets become an obstacle to that transition.
