Diplomatic cables reveal UK fears over $15B Vietnam coal deal

DUBAI, United Arab Emirates — Vietnam made a big splash at COP28 by announcing details of a $15.5 billion, G7-backed plan to shutter its coal industry — but British diplomats worry that Hanoi is not fully on board, according to briefing notes seen by POLITICO.

The plan drew praise at an event on December 1 alongside the opening of the U.N. climate conference in Dubai, where Vietnamese Prime Minister Phạm Minh Chính joined European Commission President Ursula von der Leyen and U.K. Energy Secretary Claire Coutinho in heralding the release of a detailed blueprint for spending the cash promised by a group of wealthy nations. 

The so-called Resource Mobilisation Plan (RMP) was a “great milestone,” said von der Leyen. U.S. climate envoy John Kerry, whose government is one of the funders, said it could lead to a “dynamic and just green economy and cleaner future for the Vietnamese people.”

But private briefing notes between U.K. government officials, dated this week, indicate a lot of concern about the effort’s future. It’s yet another sign of potential trouble for hopes by wealthy governments, including the U.S., U.K. and EU, to enlist international finance to help developing countries shift away from fossil fuels.

The diplomats complained that Vietnam’s environment ministry —  which led talks with the international donor group — was “politically weak,” and that the final deal did not “reflect the limited engagement and buy-in” from the “sceptical” energy, finance and planning ministries in Hanoi. 

Those other ministries had engaged in “persistent obstructionism” and “foot dragging,” the document said, with “blockages and bureaucracy” on the Vietnamese side hindering the work. 

The donor group includes all G7 countries, plus Norway and Denmark.

Vietnam’s “cross-government consensus” on efforts to fight climate change was “increasingly fragile,” the notes said. But Chính wanted to use the COP28 announcement to help Vietnam attract outside investment for its clean energy sector. The next day, Chính attended an investment forum in Dubai.

The notes expressed hope that the event in Dubai — and the presence of von der Leyen in particular — could “bolster the progressive elements” of the Vietnamese government, including Prime Minister Chính, as they sought to put the deal into practice. U.K. Prime Minister Rishi Sunak missed the event as it ended up coinciding with his address to the conference.

The only hint at the discord in official statements was in a British press release that said the RMP would “by nature be a living document, updated regularly as implementation progresses.”

The documents also expressed unease with the Vietnamese government’s jailing of environmental campaigners, six of whom have been arrested in the past two years. 

On Wednesday, NGOs held a press conference at COP28 calling on Vietnam to release the detainees, whom Aggy Hall, global campaigns director for the climate activist group 350.org, said were being held on “trumped up” charges.

During a joint October visit, envoys from the U.K. and EU raised concerns with the Vietnamese. The notes said they would continue to track the “worsening situation.” 

The U.K. Department for Energy Security and Net Zero did not respond to a request for comment, nor did the Vietnamese prime minister’s office.

The Just Energy Transition Partnerships — as they are known — were sold as a major win from the U.K.-hosted COP26 talks in 2021. They are roughly half public finance and half private capital raised from a group of financial institutions. 

Deals have so far been announced with Vietnam, South Africa, Indonesia and Senegal. But all have faced trouble moving from expressions of interest to implementation. 

The South Africa deal was recently boosted from $8.5 billion to  $9.3 billion by new pledges from Denmark and the Netherlands, the briefing documents said. But despite this, progress had been “slow.”

South Africa’s government faces overlapping political and energy crises and has decided to defer the decommissioning of its coal plants under the deal indefinitely. The British diplomats said the country would miss its Paris Agreement target unless the plants were closed down.