Vietnam has made headlines in 2021 for a recent solar boom that pushed it into the top global solar-power rankings in the space of months late last year.
China has a significant lead on EVs compared to Southeast Asia, where moves to embrace and capitalize on the opportunities offered by green vehicles remain nascent. All the same, signs of catchup are evident throughout the region.
Vietnam is emerging as a regional winner as a tempestuous 2020 becomes history and the world looks ahead to 2021.
On December 14, the United States and Japan issued a joint statement in support of Vietnam’s energy transition through LNG utilization. The statement made it clear that liquified natural gas (LNG) was key to ensuring Vietnam’s energy security, while reducing air pollution and assisting in transitioning to a low-carbon future.
While energy demand is down globally – by approximately 5% in 2020, according to the International Renewable Energy Agency (IRENA) – renewable energy rollout will continue to grow this year, and nowhere is that more true than in Vietnam, which is undergoing an offshore-wind bonanza.
Shifts in regional supply chains that began as a trade war between the United States and China are being hastened this year by the coronavirus pandemic. Broadly speaking, this will result in slowdown in offshoring to China and a redistribution of manufacturing foreign direct investment (FDI) to the Association of Southeast Asian Nations (ASEAN).
As multinationals look to diversify their supply chains and manufacturing facilities out of China, foreign investment in ASEAN is expected to accelerate. The industrial real estate sector should see strong growth across the region, particularly in Vietnam, where the supply of ready-built factories and warehouses is expected to increase by over 25 percent this year.
Vietnam has managed to contain COVID-19, lifting social isolation measures and reopening the economy, allowing businesses to resume.
COVID-19 has slowed global trade and disrupted supply chains, starting in China – the “factory of the world” – and resulting in a ripple effect as businesses struggle to source raw inputs. This has had short-term impacts on Vietnam, like everywhere else, but the country is strongly positioned for a rebound as economies restart.
After years of strong growth, the renewable energy sector is set to take a breather – and likely into next year. Immediate demand for energy has collapsed, oil prices have fallen in tandem and capital markets are in turmoil and therefore unlikely to support capital intensive projects.