Vietnam spends more than 1.8 billion USD to import cheap coal

Vietnam spent more than 1.8 billion USD to import 17.27 million tons of coal in the first three months of the year, mainly for thermal power plants.

According to the General Department of Customs, coal imports in the first quarter of this year increased by 16.7% compared to the same period last year, but the value decreased by 7.7% because the average import price was only 105.18 USD per ton, down more than 20%. The decrease in price but the increase in import volume shows that domestic coal consumption demand is still high, especially in the context that thermal power still accounts for a large proportion of the national energy system.

Indonesia continued to be the largest coal supplier to Vietnam, accounting for more than 40% of total imports in the first quarter. Coal output from Indonesia reached 6.98 million tons, worth 579 million USD, a sharp increase in both volume and value. The average import price from Indonesia fluctuated around 82.9 USD per ton, lower than the general level.

Australia ranked second with more than 5.36 million tons, worth 693.7 million USD, accounting for 31% of the import proportion. Although the volume increased sharply, the turnover decreased because the average price was only 129.3 USD per ton.

Russia was the third largest partner, supplying 1.44 million tons of coal, worth more than $206 million. While the volume increased slightly, the price fell nearly 28%, to $142.3 a ton.

Vietnam must import coal Although the country has been producing this product for a long time, the domestic supply does not meet the quality requirements. Most of the coal mined in the country plays an auxiliary role, suitable for cement or small production. Meanwhile, modern thermal power requires coal with high calorific value, uniformity and few impurities.

On the other hand, as domestic easily exploitable reserves are gradually depleted, many mines are forced to dig deeper, increasing costs and reducing efficiency. Meanwhile, importing cheap coal helps businesses be flexible in supply while saving production costs.

Indonesia is one of the important sources of coal of all kinds for Vietnam. Currently, Vietnam applies a special preferential import tax rate of 0% for coal imported from Indonesia, because both countries are members of the ASEAN Trade in Goods Agreement (ATIGA). To enjoy this tax rate, businesses need to present a certificate of origin (C/O) form D, proving the origin from Indonesia.

However, without a valid C/O form D, imported coal will be subject to the common import tax rate (MFN) of about 3-5%. The specific MFN tax rate depends on the type of coal and the corresponding commodity code.

This year, Vietnam is expected to produce about 37 million tons of clean coal, while demand is up to 50 million tons, mainly for thermal power plants. Therefore, Vietnam continues to increase imports, especially thermal coal from Indonesia and Australia. Despite the trend of shifting to renewable energy, coal will still play a key role in the national energy structure until 2030.

Source