The External Effects of the Energy Union Strategy on Trade and Investment in Renewable Energy from the EU to Vietnam: an Initial Assessment

The EU’s energy policies aim to ensure that EU citizens can access secure, affordable and sustainable energy supplies, as well as an environmentally friendly economy, putting the EU at the forefront of renewable energy production, clean and efficient energy technologies, and the efforts to counter global warming. Accordingly, the EU Commission has put forward not only internal (EU Single Market) strategy, but also initiatives and agreements beyond the EU to build modern, interconnected and sustainable energy systems.
Energy trade relations between Vietnam and the EU will greatly intensify and develop, especially with the signing of the EU-Vietnam Trade Agreement (EVFTA) on 02 December 2015. A chapter in this agreement is dedicated to sustainable development which expects from the EU firms to transfer new technologies and techniques to Vietnam whereby Vietnam’s energy strategy can be developed. This initiative is in line with the National Energy Development Strategy of Vietnam that sets out several ambitious goals, including improving efficiency in the exploitation and preservation of energy resources and increasing the ratio of consumption of renewable and clean sources.
In the coming few years we are destined to witness whether the EU’s energy policies will positively influence the sustainable energy development in Vietnam, through the EVFTA which is envisaged to come into force in 2019. Against this contemporary background, this paper aims to provide the current state of affairs of EU’s Energy Strategy and its external dimension. It then critically assesses the impact of EVFTA’s provisions on energy trade and investment flows from the EU to Vietnam, particularly in relation to renewable energy. As a result, both the prospects and constraints which the EU investors may face in Vietnam are highlighted and based on this analysis, suggestions for reform are provided.