Active Energy plans to develop a full business ecosystem in Vietnam’s domestic energy market to franchise and develop its CoalSwitch products, which meets international ESG standards, with local partners.
The company’s ambition is to contribute to the process of reducing coal and carbon emissions in Southeast Asia, with Vietnam as the first destination to ultimately see local people and businesses benefit. It will include different phases, including testing scale to transform white pellets to black pellets and technology consultancy at the beginning.
Active Energy believes that Vietnam is an attractive destination for green energy investment. It has favorable investment terms, having signed 16 free trade agreements. The country is the largest or second-largest exporter of many agriculture and forestry products, with a skilled and reasonably-inexpensive workforce, as well as various incentives that make it an appealing location for companies like Active Energy to invest in and grow their business.
There is a huge push towards renewables in the county and region. The Vietnamese Government has set clear targets for the energy sector, including commitments to aim for net-zero emissions by 2050 and to phase out coal-based power by 2040.
This sets a clear direction for the energy sector, positioning it well to lead the country’s green growth ambitions. Its Power Development Plan VIII (PDP8) keeps clean energy transition at its core. This includes selecting an appropriate energy mix, phasing out the use of coal, and considering the role of transition fuels, such as CoalSwitch.
Vietnam and Southeast Asia are driving global economic growth. Southeast Asia is experiencing average growth of 4.3 per cent in 2023 and Vietnam’s economy is forecast to grow at over 6 per cent each year in the next five years.
This growth will require energy. In Vietnam alone, demand is estimated to grow at 10 per cent annually to 2030 to support forecast GDP growth. At the same time, according to the Asian Development Bank (ADB), air quality is the biggest environmental health risk in the Asia-Pacific. Four billion people, or 92 per cent of those living in the region, are exposed to air pollution levels that endanger their health.
Each of the ten countries in ASEAN is distinctive in terms of its stage of development, industrial output, politics, history, and geography. For example, energy demand per capita in Myanmar or Cambodia is about one quarter of the world average, while in Singapore it is about three-fold higher than the world average. Increases in manufacturing have been the driving force behind economic development in Thailand and Malaysia, while the Philippines has seen much more growth in its service industry.
Energy policy priorities also differ from country to country, with different approaches to securing new energy supplies to meet expanding energy demand, achieving climate goals, and ensuring access to affordable, reliable, and modern energy for all. Nonetheless, a common denominator is a commitment to regional cooperation to secure future prosperity and security.
Governments across Southeast Asia have set out long-term plans for a more secure and sustainable future in energy. Seven Southeast Asian countries - Brunei Darussalam, Indonesia, Laos, Malaysia, Singapore, Thailand, and Vietnam - have already announced net-zero emissions plans and one country, Cambodia, has carbon neutrality targets in place.
The sustainable development scenario (SDS) maps out a way to achieve these goals in full and sees enhanced efforts to achieve universal access to energy in 2030. Fossil fuel subsidies are being phased out, efficiency improvements temper growth in overall demand, and there are concerted efforts to boost clean energy technology deployment in power generation and end-use sectors.
For example, in the SDS, 21 GW of renewable capacity are added on average each year to 2030, which is triple the level in recent years. These efforts also help reduce the region’s fossil fuel import bill.
Similar to the UK and the US, Vietnam has committed to the Paris Agreement to deliver net-zero greenhouse gas emissions by 2050, a significant challenge given that coal-fired power generation remains at 47.4 per cent of the domestic energy mix.
To achieve its goal, the Vietnam Government has announced partnerships, such as the Just Energy Transition Partnership (JETP) with the UK and the EU. The JETP will mobilize an initial $15.5 billion of public and private finance over the next three to five years to support Vietnam’s green transition. The partnership aims to limit Vietnam’s peak coal capacity to 30.2 GW, down from the current planning of 37 GW.
Any pathway to meet net-zero goals will mean a dramatic reduction if not outright replacement of coal-derived power, or the addition of costly and as-yet unproven carbon capture and sequestration technologies.
One new option for the country is an emerging renewable fuel that eliminates carbon dioxide emissions on a lifecycle basis, which is a “true drop-in” replacement for coal, and can be produced in-country using sustainable natural resources and local workers.
CoalSwitch is developed by the Active Energy Group plc, a producer of sustainably-sourced, energy-dense clean carbon products and technologies. Its patented CoalSwitch is the world’s first low-carbon, energy-dense coal substitute for industrial and power applications, made from waste wood resources.
CoalSwitch has a Net Calorific Value (NCV) of 23-32 (kJ/kg) compared with regular white biomass pellets, at 17 (kJ/kg), and will reduce more than 99 per cent of carbon emissions compared to coal. It reduces ash by 70 per cent or more and offers double-digit reductions in other forms of pollution.
Moreover, CoalSwitch, with its unique quality, gives Active Energy the ability to tailor products to meet the needs of heavy industries by providing a higher fixed carbon solid fuel that is equal or superior to coal.
CoalSwitch can also help address the country’s increasing air quality problem while also enabling the power sector to keep up with energy demand, all while helping the country cut coal in its energy mix to 19 per cent by 2030. The pre-treatment system developed by Active Energy to remove “fast-growing” species contamination of metals from soil and the overuse of fertilizer will allow products produced from Vietnam to meet standards for export to Japan and European markets.
Over the last two years, Active Energy has been expanding its presence in Southeast Asia. The company has continued to build its IP portfolio. Most recently, the finished CoalSwitch production patent was awarded in Malaysia, and the company continues to proceed with additional patent applications throughout the region. As part of this strategy, the company plans to open an office in Vietnam in 2024.