Vietnam Reduces LNG Import Tariff to Spur Clean Energy Investment
Hanoi, The Gulf Observer: The Vietnamese Government has reduced the preferential import tariff on liquefied natural gas (LNG) from 5 per cent to 2 per cent, in a move designed to accelerate the country’s transition from fossil fuels to cleaner energy. The change, outlined in Decree No. 73/2025/NĐ-CP issued on March 31, is seen as a critical step toward supporting LNG-based energy development.
A Strategic Boost for LNG Investors
Nguyễn Quốc Thập, Chairman of the Vietnam Petroleum Association, welcomed the tariff cut, stating that it offers strong incentives for stakeholders across the LNG value chain — from importers like PV GAS to power producers such as PV Power and industrial end users. He added that the decision reflects the government’s broader effort to balance state, investor, and consumer interests.
The new investor-friendly framework is expected to drive infrastructure development, including LNG terminals, storage facilities, regasification plants, and LNG-fueled power stations. Under Power Development Plan VIII, Việt Nam plans to build 23 gas-fired power projects by 2030, including 10 using domestic gas with a total capacity of 7,900 MW and 13 relying on imported LNG with a combined capacity of 22,400 MW.
These initiatives are central to enhancing national power security and achieving Việt Nam’s net-zero emissions target by 2050. The Nhơn Trạch 3 power plant — the country’s first LNG-to-power facility using imported gas — was connected to the national grid in February and is expected to begin commercial operations in July. Along with Nhơn Trạch 4, both plants, developed by PV Power, are scheduled to be fully operational in 2025.
To ensure reliable fuel supply, PV GAS and PV Power have signed a 25-year LNG agreement for the Nhơn Trạch 3 and 4 plants. PV GAS, currently the sole long-term LNG supplier in Việt Nam, is also expanding investment in import terminals to sustain supply for both electricity generation and industrial use.
Remaining Policy Challenges
Despite the progress, industry experts highlight the need for broader policy reforms. Thập emphasized that a unified regulatory framework governing investment, infrastructure, imports, and LNG trading is essential for ensuring energy security and long-term sustainability.
A PV GAS representative pointed to regulatory gaps, including the lack of guaranteed purchase volumes, unclear pricing mechanisms for electricity generated from LNG, and vague cost-related policies. These gaps complicate planning, output pricing, and commercial agreements within the LNG sector.
PV Power also cited challenges in securing international financing due to the novelty of the LNG investment model in Việt Nam. International lenders typically require minimum purchase guarantees of 70–80 per cent, clear pass-through pricing mechanisms, and secure access to land and grid infrastructure.
Petrovietnam stressed the need to differentiate LNG-to-power projects from conventional sources within the competitive electricity market, advocating long-term contracts to stabilize supply and reduce consumer costs.
Legal Reforms to Support the Energy Transition
The Vietnam Petroleum Association has called for extensive legislative updates to facilitate clean energy advancement. Recommended changes include revisions to laws on electricity, environmental protection (with emphasis on carbon accounting), taxation, marine resources, investment, procurement, construction, and land.
The association also proposed aligning electricity market development with Power Development Plan VIII, establishing integrated LNG infrastructure clusters, and expanding transmission networks for domestic and export purposes.
Further recommendations involve updating organizational and financial regulations for state-owned energy corporations, particularly Petrovietnam and EVN, to ensure they are equipped to lead the transition to a more sustainable energy future.
