The 27th AIM International Workshop, National Institute for Environmental Studies, September 30 – October 1, 2021

Analysis on Vietnam's NDC Reduction Target and Further
Decarbonization using AIM/Enduse*1 Mizuho Research & Technologies, Ltd. (MHRT)*2 National Institute for Environmental Studies (NIES)

Takaharu Ota*1, Tomoki Hirayama*1, Yuko Motoki*1 and Go Hibino*2

BackgroundPurposez In Vietnam, the economy has been growing dramatically and GDP growth rate was above 7% in 2018and 2019, even under the COVID-19 pandemic, still 2.91% in 2020.
z Also CO2 emission is increasing, CO2 emission per capita has doubled in the last 10 years. Vietnam'surgent issue is to reduce emission with maintaining its economic development.
z Vietnam’s updated NDC indicates that the emission reduction is increased from 9% to 27% by 2030
with international support under the Article 6th of Paris Agreement.

z Exploring the Potentiality CO2 emission reduction in Vietnam by2030
z Identification of emission pathway and emission peak in Vietnamby 2050
z Consideration of Vietnam’s strategies for further decarbonizationand contribution of supports from developed countries

MethodologyModel structure of AIM/Enduse

Assumption of countermeasures and service demandz Using AIM/Enduse, we estimate CO2 emissions from energy use
in Vietnam up to 2050.
¾ AIM/Enduse model selects technologies to meet the service
demand with minimizing the total cost.
¾ TechFixed scenarios are set as BaU, which are subdivided totwo, “TechFixd (Supply & Demand)” and “TechFixed (Demandonly)”.
¾ Lowcarbon scenarios are set as countermeasures, which aresubdivided to three, “Lowcarbon_Low”, “Lowcarbon_Middle”
and “Lowcarbon_High” by the intensity of countermeasure
and the period of introduction.

㻵㼚㼠㼑㼚㼟㼕㼠㼥㻌㼛㼒㻌㼏㼛㼡㼚㼠㼑㼞㼙㼑㼍㼟㼡㼞㼑㼟㻌㻖㻯㼛㼡㼚㼠㼑㼞㼙㼑㼍㼟㼡㼞㼑

Minimize Total Cost (TC) at year t
TC= Initial investment cost ($)+ Operating and maintenancecost ($/year)+ Energy cost ($/year)+ Payment for energy tax ($/year)+ Payment for emission tax ($/year)• Stock dynamics

D j d ¦ A j, l  X ll

D j

A j, lX l§

S (l ) S (l )  ¨¨1 : Service demand quantity of service type j: Output of service j per unit operation of device l: Operating quantity of device l©

1 ·¸  r (l )  w(l )T (l ) ¸¹

S l : Stock of device l
S l : Stock of device l in the previous year
T l : Life time of device lr l : Recruited quantity of device l
w l : Retired quantity of device l㻿㼑㼏㼠㼛㼞

TechFixed㻰㼑㼢㼕㼏㼑

Lowcarbon

Supply &Demand

DemandonlyLowMiddleHigh㻾㼑㼚㼑㼣㼍㼎㼘㼑㻯㼛㼚㼢㼑㼞㼟㼕㼛㼚㻌㼒㼞㼛㼙㻌㼒㼛㼟㼟㼕㼘㻌㼒㼡㼑㼘㼟㻌㼠㼛㻌㼞㼑㼚㼑㼣㼍㼎㼘㼑㼟㻼㼛㼣㼑㼞㻙䕧䕧䕿䖂㻱㼚㼑㼞㼓㼥㻌㼟㼍㼢㼕㼚㼓㻵㼚㼠㼞㼛㼐㼡㼏㼠㼕㼛㼚㻌㼛㼒㻌㼔㼕㼓㼔㻌㼑㼒㼒㼕㼏㼕㼑㼚㼏㼥㻌㼐㼑㼢㼕㼏㼑㼟㻭㼘㼘㻙㻙䕿䕿䖂㻲㼡㼑㼘㻌㼏㼛㼚㼢㼑㼞㼟㼕㼛㼚㻯㼛㼚㼢㼑㼞㼟㼕㼛㼚㻌㼒㼞㼛㼙㻌㼏㼛㼍㼘㻌㼍㼚㼐 㼠㼞㼍㼐㼕㼠㼕㼛㼚㼍㼘㻌㻭㼘㼘㼎㼕㼛㼙㼍㼟㼟㻌㼠㼛㻌㼛㼕㼘㻌㼍㼚㼐㻌㼓㼍㼟㻙㻙䕿䕿䖂㻱㼘㼑㼏㼠㼞㼕㼒㼕㼏㼍㼠㼕㼛㼚• Service demand㻰㼑㼠㼍㼕㼘㻵㼚㼠㼞㼛㼐㼡㼏㼠㼕㼛㼚㻌㼛㼒㻌㼑㼘㼑㼏㼠㼞㼕㼏㻌㼐㼑㼢㼕㼏㼑㻮㼡㼕㼘㼐㼕㼚㼓㻴㼑㼍㼠㻌㼜㼡㼙㼜㻘㻌㻵㻴㻌㼏㼛㼛㼗㼕㼚㼓㻌㼐㼑㼢㼕㼏㼑㻙㻙䕧䕿䖂㼀㼞㼍㼚㼟㼜㼛㼞㼠㻱㼘㼑㼏㼠㼞㼕㼏㻌㼢㼑㼔㼕㼏㼘㼑㻘㻌㻴㼥㼎㼞㼕㼐㻌㼏㼍㼞㻙㻙䕧䕿䖂㻙㻙㻙㻙䕧䕧䕿䕿䖂䖂㻙㻙㻙䕿䖂㻯㻯㻿㻵㼚㼠㼞㼛㼐㼡㼏㼠㼕㼛㼚㻌㼛㼒㻌㻯㻯㻿㻯㼑㼙㼑㼚㼠㻼㼛㼣㼑㼞㻴㼥㼐㼞㼛㼓㼑㼚㻵㼚㼠㼞㼛㼐㼡㼏㼠㼕㼛㼚㻌㼛㼒㻌㼔㼥㼐㼞㼛㼓㼑㼚㻌㼐㼑㼢㼕㼏㼑㼀㼞㼍㼚㼟㼜㼛㼞㼠㻲㼡㼑㼘㻌㼏㼑㼘㼘㻌㼢㼑㼔㼕㼏㼘㼑* 䕧, 䕿 and 䖂 are intensities of countermeasures. They mean the intensity is low, middle and high respectively.
2014

Sector

2030

Unit

Service
Index
DemandMton

6

Cement(production) Mton

Steel (production)
Other Industry

ktoe

2014

2050

ServiceDemandIndex

ServiceDemand100

48812

64

61

100

140

230

164

15,072100

44,495

Sector

2030

2050

UnitServiceServiceIndex
DemandDemand

1,094 Residential

ktoe

12,624100 17,024

135 22,524

178

269 Servicektoe

2,472100

7,298

295 23,118

935

554 Transport (passenger) Bpkm

385

100

960

249

1,919

498

225

100

621

276

2,395 1,064

Index

295 83,468

Transport (freight)

Btkm

Index

ServiceIndex
Demand¾ Refers to Vietnam Population Projection 2014 – 2049 (GSO,2016) at population, DRAFT PDP8 (MOIT, 2021) at GDP growthrate, and expectancy data by Vietnamese government atenergy source, service demand and energy price etc.

ResultLowcarbon_MiddleLowcarbon_Highz In Lowcarbon scenarios, CO2 emission
could peak out by 2050 withcountermeasures for the demand.

¾ Developed countries could give technical andfinancial support in energy sector and transport
sector.

¾ It is almost equivalent to the goalof conditional NDC in 2030 apartfrom the intensity of thecountermeasures or the periodof introduction.

600
NDC (BaU)
400

NDC (Unconditional)
NDC (Conditional)

Countermeasures for the demand would
meet the goal of NDC and peak out in2030 in the shortest.

20002014

2020

2025

2030

2035

2040

20452050* BaU emissions are calculated using the ratio (84%) of 2014 CO2 emissions from energy use (source: World EnergyBalances 2020 edition) to 2014 GHG emissions from energy use (source: updated NDC) considering the reduction
rate of -9% from BaU in unconditional NDC. Emissions equivalent to conditional NDC in the figure are also converted
in the same way.

z Both CO2 emission per capita and Total final energy consumption per capita are fewer in Vietnam than indeveloped countries so far. But the gap between them would be little in 2040.

Comparison of CO2 emission and total final consumption per capita with developed countries

Estimated cumulative additional cost(compared to TechFixed (Supply & Demand))TechFixed (Demand only)
250

100%

100%

90%
200

80%
70%

150

60%
50%

100

40%
30%

50

20%
10%

90%

70%

50%

30%

10%

EU27

JPN
CHN

LowCarbon
Low

FRN
CHN

Vietnam

EU27

LowCarbon
High
IEA WEO2020
SDS scenario

FRN
EU27
EU27

JPN

UK

JPN

LowCarbon
Low
LowCarbon
High

CHN
Vietnam

90%
200

70%
150

60%
50%

100

40%
30%

50

20%
10%

00%

2020 2025 2030 2035 2040 2045 2050
CO2 of CHN, EU27, JPN, USA in 2025, 2030, 2040 from IEA World Energy Outlook 2020 Sustainable Development Scenario
CO2 of Vietnam in 2025, 2030, 2040, 2045, 2050 from this analysis (Lowcarbon Low ~ High)
CO2 from 1980 to 2018 of all countries and region from IEA CO2 emissions.
Population from UN World Population Prospects 2019

0250

100%

Share of cumulative additional investmentJPN

IEA WEO2020
SDS scenario

5020%

Lowcarbon_High
25080%

10040%

2020 2025 2030 2035 2040 2045 2050

Amount of cumulative additional
investment [Billion US$]UKDEU

Share of cumulative additional investment

DEU

Total Final Consumption per capita (toe)CO2 emissions per capita (tCO2)

USA

150

60%

Lowcarbon_Middle
100%

20080%

2020 2025 2030 2035 2040 2045 2050

USA

2500%

00%

Total final consumption per capita

CO2 emission per capita

Lowcarbon_Low

90%
80%

200

70%
60%

150

50%
40%

100

30%
20%

50

10%
0%

0

2020 2025 2030 2035 2040 2045 2050

TFC of CHN, EU27, JPN, USA in 2025, 2030, 2040 from IEA World Energy Outlook 2020 Sustainable Development Scenario
TFC of Vietnam in 2025, 2030, 2040, 2045, 2050 from this analysis (Lowcarbon Low ~ High)TFC from 1980 to 2018 of all countries and region from IEA energy balances.
Population from UN World Population Prospects 2019

Next Stepz Explore more efficient scenarios to drive down emissions toward Net-zero after peaking out.
z Continue to update the technical data and reflect on further analysis of Vietnam, in concert with researchers and policy makers.

Conclusionz If following Vietnam’s current power plan without countermeasures for the demand, CO2 emission would not peak out up to 2050.
z Adopting countermeasures for the demand, with early and broad introduction, CO2 emission could peak out in 2030 and Vietnam could achieve the goal of conditional
NDC.
z In Vietnam CO2 emission per capita and total final consumption per capita would be equivalent to or larger than those of developed countries in 2040, which requires
Vietnam further climate action to lower its emissions.
z Additional investment to reduce CO2 emissions is needed particularly in energy sector and transport sector in Vietnam, supported by developed countries including Japan.
Acknowledgement : We express our sincere thanks to Mr. Tan, Dr. Lam and Dr. Bao

Amount of cumulative additional
investment [Billion US$]

800

Lowcarbon_Low

Amount of cumulative additional
investment [Billion US$]

1,000

Share of cumulative additional investment

TechFixed (Supply &Demand)
TechFixed (Demand only)

Without countermeasures
for the demand, CO2
emission would continue
to increase as of 2050. If
approaching to the supply
only, CO2 emission would
not be reduced efficiently.

1,200

z Implement the strictest countermeasures, the amountof cumulative additional investment is around 240
billion USD, around 1% of total sum of GDP from 2014
to 2050.
z The amount of cumulative additional investment isrequired especially in energy sector and transport sector.

Amount of cumulative additional
investment [Billion US$]CO2 emissions from energy use [MtCO2]

1,400

z In TechFixed scenarios, CO2 emission
would continue increasing as of 2050.
Implementing countermeasures fixing
the share of both the supply and thedemand, it would be a little higher
than the goal of NDC(BaU)* in 2030.

Share of cumulative additional investment

Estimated CO2 emission from energy usein BaU scenario and countermeasure scenario