The 28th AIM International Workshop, National Institute for Environmental Studies, September 13 – 14, 2022

Analysis on Pathways toward Carbon Neutrality in Vietnam using AIM/Enduse
Takaharu Ota*1, Tomoki Hirayama*1, Yuko Motoki*1 and Go Hibino*2*1 Mizuho Research & Technologies, Ltd. (MHRT), *2 National Institute for Environmental Studies (NIES)

Result
1,200

1,000

1,000

1,000

800

800

800

600

600

600

400

400

400

200

200

200000Total Final Consumptions [Mtoe]

Model structure of AIM/Enduse

300300250250250200200200150150

150

100100100505050002014 2020 2025 2030 2035 2040 2045 20502014 2020 2025 2030 2035 2040 2045 2050

2014 2020 2025 2030 2035 2040 2045 2050

 Large-scale renewables are required and coal power plantcannot be built after 2025 to achieve carbon neutrality.
Estimates of trends in power generation up to 2050

 Even if carbon neutrality isachieved in 2050, emissions
from some sectors remain
because of the use of fossil
fuels. CCS offsets theseresidual emissions.

Net Zero-CCS

1,600

 Total final consumptions
decrease by about 40%
compared to BaU scenario
because of energy savings by
high-efficient technologies andthe shifts from fossil fuels toelectricity.

1,400

1,200

1,200

1,000

1,000

800

800

600

600

400

400

200

200

0

2014

2020

2025

20,00010,0000

20,00015,00010,000

5,000

0
2020

2030

2040

2050

2030

2040

60,00050,00040,00030,00020,00010,000

2040

2050

2040

15,00010,000

5,000

2030

2040

2050

2,000

50,000

0
2030

2040

2020

2030

2040

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%
0%
2014

2020

2025

15,00010,000

5,000

6,000

150,000
100,000
50,000

2030

2040

2050

4,000

2,000

0
2020

2030

2040

2050

500,000

2020

2030

2040

2050

3,000

2,000

1,000

400,000
300,000

2020

2030

2040

2050

2045

2050

2030

2035

2040

2045

2050

2014

2020

2025

2030

2035

2040

2045

2050

400
300
200
100
0
Net Zero-CCS-100

200,000
100,000
00

2040

2025

Estimates of additional investment cost from2022 to 2050

Car (Freight)

4,000

2035

2020

500

2020

Hot water (Residential)

8,000

2030

2014

 Additional investment cost is US $308 billion in
Net Zero-CCS scenario and US $394 billion in Net
Zero-Renewable scenario. EV, renewables andbattery cover the major part of additional cost.

2050(Net Zero-Renewable)

080%

200,000

2050

2050

80%

02020

10,000

02020

4,000

2050

(Net Zero-Renewable)

00

2030

20,00020,0006,000

100,000

2045

90%

0
2020

(Net Zero-Renewable)(Net Zero-Renewable)

2030

5,000

2050

25,0002020

10,00002020

70,00015,000

8,000

2040

90%

250,000

Transportation [Mpkm]

30,000150,000

Cement production [kton]

40,00010,0002035

100%

Car (passenger)

Transportation [Mtkm]

 AIM/Enduse model selects technologies to meetthe service demand with minimizing the totalcost.
 “Net Zero-CCS” and “Net Zero-Renewable”
scenarios are set to achieve carbon neutrality in
2050.
In Net Zero-CCS scenario, the amount of CCS islarge, 250 MtCO2 in 2050. In Net ZeroRenewable scenario, the ratio of renewables ishigh, 90% of power supply in 2050.
 Future service demand is estimated based on
various sources, including GDP growth rate,
calculation result from AIM/ExSS andassumptions from Vietnamese government.
 Calculation results of this analysis are notnecessarily consistent with the emission
pathway and peak year of the latest NCCS.

50,000Cement making process(Net Zero-CCS)

Energy consumption [Mtoe]

 Using AIM/Enduse, we estimate CO2emissions from energy use and industrial
process, energy demand and share ofcountermeasures in Vietnam up to 2050.

(Net Zero-CCS)

60,000

Cooking (Residential)(Net Zero-CCS)
Energy consumption [Mtoe]

(Net Zero-CCS)
Energy consumption [Mtoe]• Stock dynamics• Service demand
Minimize Total Cost (TC) at year t
1 D  j   A  j, l   X  l 
TC= Initial investment cost ($)
S (l )  S (l )  1   r (l )  w(l )lT (l ) + Operating and maintenanceD j  : Service demand quantity of service type jS  l  : Stock of device l
cost ($/year)A j , l  : Output of service j per unit operation of device l
S  l  : Stock of device l in the previous year
X l  : Operating quantity of device l+ Energy cost ($/year)
T  l  : Life time of device l+ Payment for energy tax ($/year)r  l  : Recruited quantity of device l
w  l  : Retired quantity of device l+ Payment for emission tax ($/year)

20,00025,000

Energy Consumption [Mtoe]

70,000Industrial furnaceEnergy consumption [Mtoe]

Boiler2030

100%

 Electrification should be promoted in all sectors.
 Use of hydrogen is needed in the industry sector after 2030 and in the freight transport sector after 2040.
 Early introduction of countermeasures is important not to make the existing equipment stranded assets.
Transition of main technologies up to 2050
Steel making process

Net Zero-Renewable

1,600

1,4000%

Energy consumption [Mtoe]

Ironmaking process (High-efficiency),
Electric furnace, Cement manufacturing
process (High-efficiency), Boiler (Highefficiency), Heat pump, Industrial furnace
Industry(High-efficiency), Electric industrial furnace,
Motor (High-efficiency), Inverter, CCS,
Hydrogen reduced direct iron making,Hydrogen burner, Hydrogen furnace
Insulation, Heat pump, Heat pump airconditioners, Air conditioners (HighResidentialefficiency), Gas cooking equipment (High&efficiency), Electric cooking equipment, LED
Commercial
lighting, Household appliances (Highefficiency)
Hybrid vehicles, Plug-in hybrid vehicles,
Electric vehicles, CNG vehicles, Fuel-cellvehicles, Hybrid buses, Electric buses,
Electric railways, Hydrogen railways,
Transport
Motorcycle (High-efficiency, electric),
Airplane (High-efficiency), Ship (Highefficiency), Bio-mixed fuels (Gasoline, Diesel,Jet fuel, Heavy oil)
Coal and Gas fired (High-efficiency, CCS),
EnergyHydropower, Wind, Solar, Biomass(Highsupplyefficiency, CCS), Electrolysis, Reduction oftransmission loss
Service demand
Sector
Unit 2014
2030 2050
64864
Steel (production)
Mton
61140100
Cement (production)
Mton
100336661
Other Industry
100
195333
Residential
100295935
CommercialIndex(2014
100280585
Transport (passenger)=100)
100239550Transport (freight)
Others100
199322(Agriculture and Forestry)Net Zero-Renewable

300

Energy consumption [Mtoe]

Countermeasure

Net Zero-CCS

0

Crude steel production [kton]

Sector(200)

BaU

Crude steel production [kton]■ Net Zero-Renewable- Carbon neutrality in 2050
- 90% Renewables in power generation- 150 MtCO2 of CCS

2014 2020 2025 2030 2035 2040 2045 2050

(200)

Estimates of total final consumptions of energy

Base year
Target year

Scenario2014 2020 2025 2030 2035 2040 2045 2050

2014 2020 2025 2030 2035 2040 2045 2050

Methodology■ Net Zero-CCS- Carbon neutrality in 2050
- 80% Renewables in power generation- 250 MtCO2 of CCS

1,400

1,200(200) To calculate emission pathways, electricity demand, necessary countermeasures and additional cost to achieve carbon neutrality in 2050 in Vietnam.
 To highlight the sectors which need early introduction of countermeasures not
to make the existing equipment stranded assets.

2014
2050
CO2 emission from energy use andTargeted gasindustrial process■ Industry(Steel, Cement, Other industry)■ Residential■ Commercial
Sector■ Transport (Passenger, Freight)■ Other Energy Demand■ Energy supply■ Industrial process (IPPU)■ BaU- Share of technologies on the demand side isfixed after 2020.
- The shortage of power supply is met bycoal-fired power.

Net Zero-Renewable

1,200

PurposeAssumptions of calculation

Net Zero-CCS

1,400

Power generation [TWh]

BaU

1,400

 Power generation increases up to 1,281 TWh in Net Zero-CCS
scenario and 1,514 TWh in Net Zero-Renewable scenario
because of acceleration of electrification and use ofhydrogen (Imports or exports are not considered, and fully
self-sufficient in hydrogen).

 In both countermeasurescenarios, CO2 emissions fromenergy use and industrial
process peak at about 500
MtCO2 in 2030, and reachcarbon neutrality in 2050.

Share of power generation

Estimates of CO2 emissions from energy use and industrial process
CO2 emissions from energy use andindustrial process [MtCO2]

 In Vietnam, the economy has been growing dramatically and GDP growthrate was above 7% in 2018 and 2019, even under the COVID-19 pandemic,
still 2.9% in 2020 and 2.6% in 2021.
 Also CO2 emission is increasing, CO2 emission per capita has doubled in thelast 10 years. Vietnam's urgent issue is to reduce emission with maintaining
its economic development.
 Vietnam’s Prime Minister pledged carbon neutrality by 2050 at COP26 andapproved NCCS in July 2022, which includes mainly qualitative description of
the decarbonized society.

Additional investment cost [billion US$]

Background

2020

2030

2040

2050

Industry
EV(Passenger)
Power(Gas)
Power(Solar)
Battery

Net Zero-Renweable
Building
Other transportation
Power(Onshore Wind)
Power(Other)
Total

ICV(Passenger)
Power(Coal)
Power(Offshore Wind)
Hydrogen* Assumptions : Discount rate is 10%. 1% of wind power generation will be stocked bybattery after 2035.

Conclusion
 We show the pathways to achieve carbon neutrality in 2050 in the two scenarios, Net Zero-CCS scenario and Net zero-Renewable scenario. Both scenarios show that more than 150 MtCO2of CCS and 80% of renewables are needed in 2050 and the emission peak year is 2030.
 Electricity demand in 2050 will be 8 to 10 times larger than in 2014 because of acceleration of electrification and use of green hydrogen.
 Additional investment cost from 2022 to 2050 to achieve net zero is around US $300 to US $400 billion. EV, renewables and battery cover the major part of additional cost.
 To avoid making stranded assets as far as possible, calculation results suggest that, 1. in the industry sector, industrial facilities that can use hydrogen or CCS in future should be introduced
as soon as possible, 2. in the transport sector, new gasoline cars should not be sold after 2030, and 3. in the power sector, coal-fired power plant should not be built after 2025.
 Regarding innovative technologies, not only domestic R&D but also technological partnership with developed countries will be important.
Acknowledgement : We express our sincere thanks to Mr. Tan (Ministry of Natural Resources and Environment), Dr. Lam (Vietnam National Productivity Institute) and Dr. Bao (Institute of Energy, Vietnam). These affiliations arecurrent as of March 2022.