Coal to remain as the most significant major cargo for Southeast Asian countries. Currently, Vietnam is the main driver of coal trade. Vietnam turned from coal exporter to importer country on increasing industrial growth. In Vietnam, there is no political will to invest in greener fuels means that coal will be around for unforeseeable future. Lately, Japanese giant shipowner and operator NYK signed 25-year bulker contract in Vietnam to carry coal.
In the last decades, use of coal has significantly declined in western countries, but coal continues to be major component of power generation in Southeast Asia. Especially in power generation, coal will continue to be the dominant fuel source in Southeast Asia. Coal usage will be peaking in 2027. In order to meet the rapidly increasing power demand, Southeast Asia will have to invest an average of $17 billion annually in power capacity. More than 60% of Vietnam’s coal imports are carried on supramax bulk carriers. Coal still has a role to play over the next 20 years in Southeast Asia, despite all environmental concerns. Coal is still the cheapest and easiest source of energy, and especially in developing countries like Vietnam, there is still not enough political will to heavily invest in environmentally friends but more expensive alternatives like LNG (Liquefied Natural Gas). In 2015, Vietnam was a net coal exporting country. Vietnam turned from being a net coal exporter to coal importing country in a couple of years. In 2018, Vietnam imported more than 23 million metric tonnes of coal.
Vietnam has a population of 97 million with GDP growth around 7%. Vietnam estimates that power generation will need to rise:
- 47 gigawatts in 2019
- 60 gigawatts in 2020
- 130 gigawatts in 2030
Vietnam’s coal power generation is expected to grow from the current 33% to 56% by 2030. Currently, Vietnam has more than 20 coal-fired power plants. Vietnam’s coal-fired power plants will increase to 32 by 2020 and to 51 by 2030. In other words, In 2018, Vietnam will be importing more than 80 million metric tonnes of coal per year.
Currently, Vietnam imports coal from:
- Indonesia and Australia 72%
- Russia 16%
- South Africa 7%
Due to the draft limitations in ports of Vietnam, coal have to be carried by supramax bulk carriers.