Behind the shift-of-focus from energy access to energy transition in Vietnam

Vietnam’s energy story has entered a new chapter. With near-universal electricity access reportedly achieved (99.74% households), the national priority is now shifting from expanding access to accelerating a secure and sustainable energy transition.

The focus has shifted beyond ensuring power for all, towards power that is cleaner, more resilient, and better aligned with the country’s long-term climate and development goals.

This transition is being shaped by both policy ambition and private initiative. Vietnam’s net-zero 2050 target calls for advancing carbon market mechanisms, strengthening green finance, and fostering technology transfer and digital transformation. The Just Energy Transition Partnership (JETP) and emerging regulatory frameworks show growing alignment between government action and private sector innovation.

At the same time, the transition requires significant financial resources. The Ministry of Industry and Trade estimates that Vietnam will need more than USD 119 billion in power generation investment between 2021 and 2030 to achieve its energy goals. Mobilising this investment will also depend on the private sector’s capacity to scale clean technologies and create business models that link profitability with sustainability.

Over the past two decades, Vietnam has made steady progress in expanding access to cleaner and more efficient energy solutions. Early national efforts, supported by development partners such as SNV, helped smallholder farmers adopt household biodigesters that turned agricultural waste into a reliable source of cooking fuel. Through the National Biogas Programme (2003–2020), local masons, technicians, and service providers were trained, laying the technical foundation and building confidence in a growing domestic biogas market.

Building on the foundation established by the household-scale biogas market, SNV has also expanded its work into commercial bioenergy through the Bioenergy for Circular Agriculture (BeCA) project. In this next phase, collaboration with bio-generator startups, bioenergy service SMEs, and medium- to large-scale livestock farms has been key in supporting the conversion of biogas into electricity for on-site use using advanced, high-efficiency technologies. The project provided a proof-of-concept that biogas can move beyond traditional household cooking applications to become a meaningful clean-energy option for farms, industries, and transport. The programme also engaged financiers, carbon project developers, and government counterparts to strengthen the business case for commercial biogas systems and to identify the enabling policies needed to scale the sector sustainably.

Collectively, these efforts have supported the strengthening of Vietnam’s biogas ecosystem by expanding access to reliable services, improving technical standards, and enabling broader participation from farmers, SMEs, and local partners. The lessons learned—on quality assurance, market development, and the conditions needed for private-sector investment—provide a solid platform for scaling biogas in ways that are both inclusive and sustainable.

This foundation supports Vietnam’s advance toward higher-value bioenergy solutions that deliver environmental benefits while ensuring that growth is equitable across communities and market actors.

Vietnam’s livestock sector is both a driver of economic growth and a major source of pollution. With 26.5 million pigs, 6.2 million cows, 2 million buffalo nationwide, the sector produces millions of tonnes of organic waste each year. Much of it is untreated, releasing methane, a greenhouse gas 28 times more potent than carbon dioxide, and polluting soil and waterways.

Within this challenge also lies opportunity. Biogas from animal waste can be captured and upgraded into biomethane and compressed into Bio Compressed Natural Gas (bioCNG), a clean and carbon-neutral fuel that directly replaces fossil-based compressed natural gas (CNG). In addition, Vietnam generates around 69.4 thousand tonnes of municipal solid waste (MSW) per day, of which approximately 60% is organic waste. Moreover, organic-rich wastewater from industrial processes—such as food processing and paper manufacturing—also represents a significant source of methane emissions. Despite this potential, only around 2% of Vietnam’s estimated 500–700 million cubic metres of biogas is currently being used.

Phuc Sang Minh Gas, a company specialising in the installation and construction of natural gas system is addressing this gap. Using modular biogas upgrading systems, the company purifies raw biogas by removing carbon dioxide and hydrogen sulphide, achieving methane concentrations above 95%. The resulting BioCNG can be used for industrial boilers, drying systems, and transport, or sold commercially as a renewable energy source.

According to Nam Vu, Chief Commercial Officer at Phuc Sang Minh Gas, the model is simple but powerful: turning waste into a resource. He explains:

By working with farms and factories in southern Vietnam, the company is showing how waste can fuel local industry. A 50,000-pig farm, for example, can generate up to 2 million cubic metres of biogas per year, equivalent to around 1.6 billion VND in additional revenue while avoiding 25,000 tonnes of carbon emissions.

Beyond the environmental gains, BioCNG also supports energy security and market stability. It can substitute fossil CNG without changing existing equipment, making it a practical and cost-effective option for industries such as steel, aluminum, and food processing.

Despite strong potential, scaling biofuels in Vietnam remains challenging. Investors still see high upfront costs and uncertain returns, while regulations on biogas upgrading and BioCNG distribution are evolving. Logistics and infrastructure constraints also limit expansion in rural areas.

Nam sees these challenges as opportunities for collaboration. He underlines:

The collaboration between SNV and Phuc Sang Minh Gas reflects this approach. By providing technical assistance, supporting business model development, and contributing to policy dialogue, the partnership has worked to strengthen the enabling environment for clean fuel innovation.

“Partnerships with organisations like SNV help connect technical know-how with real-world business needs,” Nam adds. “From market mapping to ecosystem development, these collaborations make it possible to move faster and with more confidence.”

At the same time, Phuc Sang Minh Gas is exploring energy service company (ESCO) and energy-as-a-service models to attract investors and demonstrate the commercial viability of decentralised bioenergy. The company is also active in climate technology, from short-lived climate pollutant reduction to carbon credit generation, aligning private investment with national climate targets.

Vietnam’s transition from expanding energy access to energy transformation will be shaped in large part by its ability to combine policy ambition with local innovation. Programmes like Phúc Sang Minh’s BioCNG initiative show what this looks like in practice: local expertise, private sector leadership, and partnerships that turn emissions into opportunity.

To meet the country’s growing energy demand, which is projected to rise 12% to 15% annually, and reach its net-zero targets, scaling such models is urgent. It will require a shared effort from all actors, including investors willing to back early projects, regulators providing clarity and incentives, and development partners helping bridge risk and capacity gaps.

BioCNG may represent only one part of Vietnam’s energy mix, but it captures the essence of the transition ahead. Cleaner, more efficient, and more inclusive. The shift is no longer about access alone. It is about how energy systems can power climate action and prosperity together.

The transition is already underway. Now is the time to accelerate it by investing in local innovation, enabling the private sector, and ensuring that the path to net zero is one that every community can walk together.