Vietnam’s rapid economic growth from the 2010s to the present has solidified its status as a Southeast Asian manufacturing powerhouse. However, this has come at the cost of growing reliance on fossil fuel imports. This sustained growth has positioned Vietnam as the world’s fifth-largest coal importer in 2025 and the leading coal importer in Southeast Asia, accounting for over one-third of the region’s 75 mln tonnes of imports. The country’s power sector remains heavily reliant on coal, which underpins both industrial expansion and rising electricity demand.
In 2024, Vietnam’s total electricity generation reached 308 TWh, with coal-fired power contributing the largest share at 148 TWh—48% of the total—outpacing all other sources combined. Hydropower followed 98 TWh (32%), although its output was constrained by drought. Solar and wind generation together produced 39 TWh (13%), reflecting steady growth despite ongoing grid bottlenecks. Gas-fired power accounted for 23.4 TWh, or 7% of total generation. To sustain its coal-heavy power mix, Vietnam imported 42 mln tonnes of thermal coal in 2024, a 27% y-o-y increase, primarily from Indonesia, driven by its low cost and reliable delivery timelines.
However, energy security concerns persist as domestic coal production continues to fall short. The Power Development Plan VIII (PDP8) aims to reduce coal’s share of installed capacity to between 13.1 and 16.9% by 2030, down from 30% in 2024, while tripling renewable energy. With a budget of $136.3 bln, PDP8 prioritises grid upgrades, energy storage, and private investment, including $20–25 bln from Vingroup for renewable and gas projects by 2030. International decarbonisation pressure through the Just Energy Transition Partnership (JETP), grid limitations, and reduced coal financing are driving Vietnam towards a more diversified energy mix, with nuclear power planned post-2035 to further reduce reliance on fossil fuels.
Consequently, while coal’s share of the energy mix is expected to decline, Vietnam is projected to increase coal imports in absolute terms over the next few years to meet rising power demand.
Domestic Coal Production and Supply Challenges
Domestic Coal Production and Supply Challenges: In the short term, Vietnam faces challenges in meeting domestic coal demand. In 2024, clean coal output by the state-owned Vietnam National Coal-Mineral Industries Holding Corporation Limited (Vinacomin) is stable at 38–40 million tonnes. This falls short of the projected domestic demand of 94–97 million tonnes by 2025 and 125–127 million tonnes by 2030, highlighting the widening supply gap. With reserves depleting and mining expansion proving costly, Vietnam’s coal strategy increasingly depends on imports. While the planned expansion of renewables may reduce coal’s share of the energy mix over time, it is unlikely to significantly offset near-term import demand due to delays in grid readiness and storage infrastructure.
Vietnam’s Climb in Global Seaborne Coal Import Rankings
According to AXSMarine data, Southeast Asia imported approximately 75 mln tonnes of coal in the first five months of 2025, with Vietnam accounting for 26.1 mln tonnes—nearly 35% of the regional total.
Last year Vietnam ranked among the world’s top five coal importers, and 2025 has started strongly as it has imported 29 mln tonnes of seaborne coal so far in 2025. This marks a 19.5% y-o-y increase from the 19.7 mln tonnes imported during the same period of 2024. This rise is driven by growing electricity consumption and expansion in energy-intensive industries, particularly the cement and clinker sector.
Cheap and Close: Indonesia Fuels Vietnam’s Coal Needs
Vietnam’s coal imports have increasingly favoured Indonesia so far this year, continuing a trend seen since 2023. Competitive prices, geographic proximity, and the quality of Indonesian sub-bituminous coal have enhanced its appeal to Vietnam’s power sector. However, Australian shipments to Vietnam grew strongly, rising 35% y-o-y, outpacing Indonesia’s 23% increase. Australia contributed marginally more coal in absolute terms during this period, despite Indonesia retaining the dominant market share.
In 2024, East Kalimantan accounted for 65% of Vietnam’s coal imports. Port upgrades and greater use of Panamax vessels have further improved the efficiency of short-haul sourcing. So far this year, the top five suppliers accounted for 27.03 mln tonnes of Vietnam’s 29 mln tonnes of seaborne coal imports: Indonesian deliveries rose 24.1% to 11.85 mln tonnes (+2.30 mln tonnes), while Australia’s volumes jumped 34.0% to 9.72 mln tonnes (+2.47 mln tonnes). Mozambique’s shipments increased 25.7% to 2.03 mln tonnes (+0.42 mln tonnes), reflecting efforts to diversify supply sources. Russian volumes declined 3.2% to 2.37 mln tonnes (-0.08 mln tonnes), hindered by logistical bottlenecks and sanctions. South African exports fell sharply by 57.2% to 1.06 mln tonnes (-1.41 mln tonnes), likely due to infrastructure challenges and competition from lower-cost coal, according to AXSMarine.
On the pricing front, Indonesia’s CFR coal averaged $81.70/tonne in 5M2025, down 10.3% y-o-y from $91.05/tonne. Meanwhile, Australian 5,500 kcal/kg coal averaged $127/tonne, up 14.4% y-o-y from $111/tonne, appealing to utilities prioritising higher calorific value. Vietnam continues to focus on cost-efficiency and supplier diversification to bolster energy security amid shifting global market dynamics.
LNG import development faces cost- competitiveness challenges. Brent-linked LNG contracts in 2024 ranged from $8.86 to $11.90/MMBtu, undermining gas competitiveness versus coal. Vietnam’s 2031 LNG target of 25.1 mln tonnes requires ~$10 bln in terminal investments, but only two projects (with a combined capacity of 6 mln tonnes) are currently under construction and expected to be operational by 2027. Without access to cost-competitive LNG from suppliers like Qatar, Indonesia’s affordable coal will likely remain the dominant energy source.
The Dynamic Role of Shipping Segments
Vietnam’s seaborne coal imports from January–May 2020 to January–May 2025 have shifted significantly towards Panamax (68–100K Dwt) vessels, driven by rising domestic power demand and port infrastructure upgrades. Panamax coal volumes surged from ~6.0 mln tonnes in the first five months of 2020 to 17.8 mln tonnes this year, now holding the largest share of coal deliveries. Cam Pha Port in Quang Ninh, handling 36% of Panamax discharged (6.5 mln tonnes) so far in 2025 (+33.5% y-o-y), leverages its proximity to northern coal-fired power plants (e.g., Quang Ninh, Mao Khe, Uong Bi). In the south, Go Gia Port processed 23% of Panamax discharges (~4.0 mln tonnes), up 96.5% y-o-y, reflecting the growing role of southern ports.
Supramax volumes have plummeted from 12.9 mln tonnes in the first five months of 2020 to 4.5 mln tonnes in 2025, as shippers prioritise Panamax vessels for cost efficiency. Capesize volumes have also dropped reflecting a preference for Panamax-compatible ports and mid-haul cargoes from Indonesia and Mozambique over long-haul Capesize cargoes from Australia and South Africa. Environmental scrutiny and price volatility have further reduced Australian coal’s competitiveness.
Freight rate trends have solidified Panamax vessels’ dominance in Vietnam’s coal trade. According to BRS assessments, Supramax rates from East Indonesia to Vietnam dropped from $13,000/day in May 2024 to $8,400/day in May 2025 (~35.4% y-o-y), while East Australia-to-Vietnam rates fell from $14,165/day to $9,995/day (~29.5%). Panamax rates saw steeper declines, falling from $15,020/day to $8,556/day (43% y-o-y) for Indonesia to Vietnam and from $15,321/day to $10,730/day (~30% y-o-y) for East Australia to Vietnam. These lower Panamax rates have driven a 76.9% y-o-y surge in coal imports from Indonesia and a 56.2% increase from Australia, as cost-effective mid-sized Panamax cargoes become the preferred choice for Vietnam’s growing energy needs.
Conclusion
Vietnam’s short to medium-term energy mix will remain coal-centric, supported by industrial demand, affordability, and infrastructure momentum. Although PDP8 outlines ambitious decarbonisation targets, progress depends on grid modernisation, LNG infrastructure rollout, and access to international financing. In the near term, Indonesian coal and Panamax shipping will continue to underpin Vietnam’s energy security and cement its role in regional and global seaborne coal trade.
However, this outlook does not fully account for rising geopolitical and trade-related risks Notably, should US tariffs on Vietnam be introduced, this could disrupt industrial output and energy demand, complicating Vietnam’s already delicate energy transition.