Vietnam reduces LNG import tariff to fuel clean energy transition

Hype Tron: Vietnam's LNG Tariff Slash Fuels Clean Energy Shift

VIBE: The Down-Low on VN's New LNG Policy

Vietnam's government has dropped a serious game-changer in the form of a sharp drop in LNG import tariffs, marking a colossal milestone in the country's journey toward a greener energy future. Here's what you need to know.

Slashing the LNG Tariff: A Green Leap

By chopped the preferential import tariff on LNG from 5 percent to a snappy 2 percent per Decree No. 73/2025/NĐ-CP, the government has sent a clear message: it's time to get serious about clean energy.

Just the Beginning: LNG's Investment Boom

With this refreshing change in policy, the stage is set for a flurry of investments from players across the LNG value chain, from big dawgs like PV GAS to powerhouses like PV Power and end consumers.

The government's moves also signal a systematic approach to refine energy policy, ensuring a balance between the state, investors, and consumers. The goal? A more inviting landscape for the development of LNG infrastructure, from smart terminals and storage systems to top-notch regasification facilities and LNG-powered power plants.

Setting the Stage for a 7,900 MW Energy Revolution

Under Power Development Plan VIII, Vietnam's got plans to build a whopping 23 gas-fired power projects by 2030. Ten of these will utilize domestic gas, with a combined capacity of 7,900 MW, while the remaining 13 will rely on imported LNG, with a massive combined capacity of 22,400 MW.

These energy generators will play a pivotal role in powering up Vietnam and advancing the country's 2050 net-zero emissions goal. The Nhơn Trạch 3 Power Plant, Vietnam's maiden LNG-powered plant, came online in February and is set to kick off commercial operations in July—just in time for the kickoff.

There's No Party Like a PV Party

Developed by PV Power, a Petrovietnam subsidiary, the Nhơn Trạch 3 Power Plant is well on its way to completion, with 96 percent of work wrapped up. The Frosty 4 plant isn't far behind. Both projects are expected to light up in 2025. To ensure a steady, long-term fuel supply, PV GAS and PV Power signed a 25-year LNG supply contract for the Nhơn Trạch 3 and 4 plants.

But Wait, There's More: Policy Gaps to Conquer

While the tariff reduction is a much-needed shot in the arm, it's no secret that more comprehensive reforms are needed, said Nguyễn Quốc Thập, Chairman of the Việt Nam Petroleum Association. A unified regulatory framework encompassing investment, infrastructure, imports, and LNG trading is essential to achieve energy security and long-term sustainability.

Persistent policy challenges, such as the absence of guaranteed purchase volumes, unclear rules for passing LNG prices through to electricity prices, and ambiguous cost regulations persistently complicate project planning, pricing negotiations, and commercial dealings throughout the LNG value chain.

Foreign Financing Roll the Dice

To hook international loans, projects face obstacles, as imported LNG remains a green-eyed monster in the Vietnamese investment landscape. Projects usually require minimum purchase guarantees (70-80 percent) and a price pass-through mechanism akin to that for domestic gas, along with clear access to land and transmission infrastructure to secure foreign financing.

Juicing Up Clean Energy Goals: Legislative Overhaul

To crank up clean energy objectives, the Việt Nam Petroleum Association has pitched for revisions to a slew of laws, including those on electricity, environmental protection (especially carbon emissions accounting), taxation, marine resources, investment, procurement, construction, and land. Additionally, it advocates aligning electricity market growth with Power Development Plan VIII, forming integrated LNG infrastructure clusters (terminals, power plants, industrial zones), expanding transmission networks for both domestic applications and exports, particularly for LNG-based power, and updating the organizational and financial regulations for state-owned energy firms like Petrovietnam and EVN.

Time to gear up, Vietnam! The LNG era is upon us and it's game on for a cleaner, greener future.

LNG import operations at Thị Vải terminal. - VNA/VNS Photo

[1] Vietnam Legislative Assembly, Decree No. 73/2025/NĐ-CP, March 31, 2025[2] Việt Nam News, Government Targets Tariff Breakthrough for LNG, April 1, 2025[3] VNS, Vietnam Pushes for LNG-fuelled Power to Achieve Energy Security, April 2, 2025[4] Energy World, Vietnam Government Slashes LNG Tariffs with New Decree, April 4, 2025[5] Reuters, Vietnam Seeks to Address Policy Challenges to Boost LNG Investments, April 5, 2025

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