Decarbonising Vietnam's booming industrial sector is critical to securing future economic success in the race to net zero. A new report from Monash University's Climateworks Centre outlines a bespoke roadmap to transform Ho Chi Minh City – the nation's economic heartbeat – into a net zero industrial precinct (NZIP).
The concept of an NZIP is fairly simple; stakeholders working together to reduce greenhouse gas emissions and achieve net zero within a specific geographic zone. Rather than a single industry, company or government operating in a silo, everyone works together – building on the efficiencies offered by shared infrastructure, technology and investment – to accelerate the shift to renewable energy, efficiency and electrification and reap the resulting benefits.
Taking this place-based approach, the roadmap centres on five industrial zones that together account for more than 70 per cent of Ho Chi Minh City's industrial zones energy use: Saigon Hi-Tech Park, Tan Thuan Export Processing Zone, Tan Tao, Hiep Phuoc and Dong Nam.
Climateworks Centre Vietnam Policy Manager and report author Ben Khuat said NZIPs offer an opportunity to future-proof Vietnam's industrial sector and by extension, the whole economy.
'The transition to a low-carbon economy through the NZIP approach represents a new engine of growth for Ho Chi Minh City and a pathway to regional leadership,' he said.
'By enabling the city to efficiently upgrade its energy infrastructure, modernise production, and foster collaboration, NZIPs can support local manufacturing industries to move up the global value chain, attract green investment and help Ho Chi Minh City remain competitive in the race to net zero.'
While Vietnam has maintained an average GDP growth of around 7 per cent over the last two decades – among the fastest in the region – this rapid economic expansion has fueled a sharp rise in emissions. Emissions have surged by a staggering 140 per cent in just ten years, with the industrial sector accounting for 54 per cent of national energy use. On a global scale, it is a similar story. More than one third of global emissions come from industry.
'These numbers mean industry plays an essential role in reaching net zero by 2050 globally, and leveraging NZIPs can enable industry to drive down emissions at the scale and pace needed,' Ben said.
'Ho Chi Minh City can position itself as regional leaders for low-carbon production, where innovation and collaboration turn industrial transition into a powerful driver of economic growth.'
This report builds on a body of work identifying NZIPs across Australia and Southeast Asia. It was developed with support from the Centre for Consultation, Information, Economic Management and Business (CIT) under the Ho Chi Minh City Institute for Development Studies.
