Vietnam is undergoing one of the most significant overhauls of its energy system in recent history and for multinational brands and their supply chains, the implications are game-changing.
For years, Vietnam’s suppliers have faced limited options when it comes to accessing renewable electricity. Most have been restricted to installing small-scale rooftop solar (restricted capacity) or buying international renewable energy certificates (not a long-term solution) with no way to meaningfully shift away from grid electricity sourced from fossil fuels.
But recent legislative and regulatory reforms are beginning to change that in a big way.
At RESET Carbon, we’re seeing these changes unfold from both a policy and an implementation standpoint. Here’s what you need to know and why it represents a unique but challenging opportunity for supply chain decarbonization.
What’s Changing: Vietnam is Unlocking Access to Renewables
Market liberalization is underway
Vietnam is moving from a centrally controlled electricity market dominated by EVN (the state utility) to a competitive power market with multiple players and market-based pricing. In 2024, the National Load Dispatch Center was spun off from EVN and restructured under the Ministry of Industry and Trade, forming an independent market operator. This represents a critical step toward greater transparency, competition, and ultimately choice when it comes to electricity procurement for both brands and suppliers.
Private utilities are now possible
One of the most transformative changes is that private entities (including foreign investors) can now develop, generate, and transmit power. This is great news because independent power producers are now able to build and operate dedicated private transmission lines to deliver clean electricity directly to industrial clients (without going through EVN’s infrastructure). The benefit of this is that it enables new renewable power delivery models (such as direct power purchase agreements (see below), particularly in industrial parks and export zones where suppliers are often concentrated.
Direct Power Purchase Agreements (DPPAs) are live
With the launch of Vietnam’s DPPA framework (now governed by Decree 57/2025), large power users can finally enter into direct contracts with renewable energy generators. This includes:
- Grid-connected DPPAs, where EVN’s grid is used to transmit electricity under a wheeling arrangement.
- Private-line DPPAs, where power flows directly from generator to consumer via dedicated infrastructure.
For multinational brands with RE100 commitments (and their top-tier suppliers in Vietnam) this creates a clear and credible path toward sourcing renewable electricity locally, rather than relying solely on unbundled certificates (again, not a long-term solution).
Remember that when it comes to renewable energy claims, the most credible are not only those that meet the RE100 mandatory and voluntary criteria, but also those that deliver physical electricity.
The Reality for Suppliers: Big Promise, Real Complexity
Eligibility barriers
The DPPA mechanism is currently limited to large energy users, typically those consuming over 200 MWh/month. Many small to mid-sized suppliers fall below this threshold and would need to participate in aggregated procurement models. Structuring and managing such models across fragmented supplier networks requires significant facilitation and technical support.
Grid congestion and curtailment
Vietnam’s renewable energy boom in recent years has outpaced its grid infrastructure. Provinces like Ninh Thuan and Binh Thuan (that are rich in solar resources) now face severe grid congestion meaning that some approved projects cannot deliver power or they face high levels of curtailment. This poses a real risk to off-site PPAs, where suppliers depend on the consistent delivery of clean power.
Regulatory complexity and evolving rules
Recent policy shifts (like Decree 57/2025) have added price caps, dynamic minimum take thresholds, and planning alignment requirements to DPPA eligibility. These are sensible protections in a fast-growing market but they also add complexity. Structuring a DPPA that works for both a brand and its suppliers requires deep understanding of these evolving requirements and how they impact project viability and risk allocation.
EVN’s continued influence
Although liberalization is progressing, EVN still holds substantial power over distribution, billing, and interconnection approvals. Its financial struggles (due in part to selling electricity below cost) may lead to slow implementation or delays in executing wheeling agreements. For any supplier relying on a grid-connected DPPA, EVN’s operational readiness remains a critical dependency.
Limited supplier readiness
Most manufacturers in Vietnam (particularly SMEs) lack the internal capacity to evaluate or manage renewable energy procurement. Few have experience with PPA negotiations, grid approval processes, or wholesale market dynamics. Without external support, many suppliers will find it difficult to engage with these mechanisms, even if the policy framework is in place.
So What Does This Mean for Brands and Supply Chains?
Well, the policy door is now open! Vietnam has laid the legislative groundwork to support local renewable energy procurement but accessing it requires a strategic, tailored approach.
At RESET Carbon, we’re supporting clients to map supplier energy usage and DPPA eligibility, identify viable project structures for renewable sourcing, facilitate aggregated procurement models, guide contract development and regulatory engagement, and build supplier capacity for long-term participation in the clean energy market.
In other words, we help turn policy opportunity into practical implementation, cutting through complexity to deliver measurable carbon reductions.
In Summary
Vietnam’s energy reforms represent one of the most promising developments for corporate decarbonization in Southeast Asia. Brands now have a credible pathway to help their Vietnamese suppliers transition to renewable electricity. But in this early phase of implementation, deep market knowledge, supplier engagement, and regulatory fluency are essential to realizing the potential that this opportunity represents.
If your organization is working to decarbonize its manufacturing base in Vietnam, now is the time to act — and to act strategically.
Interested in exploring your options? Get in touch! We’d be happy to share how we’re helping brands and suppliers across the region take advantage of these critical policy shifts.