Enhancing Green Competitiveness in Vietnam’s Steel Industry: Strategies for Sustainable

Growth in the Energy Transition Era

Abstract
Background: The steel industry in Vietnam is a vital contributor to economic growth;
nonetheless, it encounters substantial sustainability issues stemming from its dependence on
coal-based blast furnaces, elevated carbon emissions, and antiquated manufacturing processes.
Although global steel leaders have embraced hydrogen-based steelmaking and electric arc
furnaces (EAFs), Vietnam is hindered by legislative deficiencies and insufficient financial
incentives for green investments.
Purpose: This study analyzes the green competitive capability of Vietnam's steel sector within
the framework of the global energy transition. The objective is to identify principal problems to
sustainable steel manufacturing and to suggest strategic solutions for improving competitiveness
while adhering to international environmental norms.
Methods: A qualitative analysis grounded in literature was performed utilizing Porter’s
Competitive Advantage Theory and Value Chain Theory. Case studies of Japan, South Korea,
and Europe were examined to identify exemplary techniques in green steel production. Industry
reports and governmental materials served as secondary data to evaluate Vietnam's present status
and prospective potential.
Findings: The Vietnamese steel sector encounters three primary challenges: inadequate
regulatory enforcement, financial and technological obstacles, and competition from inexpensive
imports. Opportunities arise from investments in cleaner production technologies, policy
reforms, and integration into global green steel markets. Government subsidies and carbon
credit trading can facilitate this shift.
Conclusion: Vietnam must transition to green steel production by implementing Electric Arc
Furnaces (EAFs), carbon capture technologies, and enhanced recycling practices. Enhancing
laws, broadening green financing, and establishing global collaborations would guarantee
enduring competitiveness and sustainability.
Keywords: Green steel, Vietnam steel industry, energy transition, carbon emissions, sustainable
manufacturing, competitive advantage.
Introduction
The steel industry in Vietnam has demonstrated significant growth and potential for further
development, shaped by both domestic and international factors. The country's steel consumption
is significantly low at 140 kg per capita, considerably less than that of nations like South Korea
and Japan (Kim et al., 2022). This gap indicates significant opportunities for growth as Vietnam
continues to enhance its production capabilities and adapt to global market demands.
Despite the promising growth, the Vietnamese steel industry faces challenges, particularly
regarding the efficient use of resources and the use of modern technologies. An evaluation by the
United Nations Industrial Development Organization (UNIDO) revealed that more than 70% of
Vietnam's capacity depends on outdated methods, hence limiting resource efficiency and
environmental sustainability (Perkins & Anh, 2010; Trang, 2024). Furthermore, the enterprise is
burdened by issues related to the importation of substandard scrap metal, which poses
environmental hazards and obstructs recycling efforts (de Oliveira, Bernardes, & Gerbase, 2012).
In contrast, successful case studies within the industry highlight adaptable strategies that can
enhance the sector. The advent of new technologies, particularly digital instruments like
Building Information Modeling (BIM) and artificial intelligence (AI), is beginning to transform
traditional processes, hence enhancing competitiveness and operational efficiency (Casini, 2021;
Piras, Muzi, & Tiburcio, 2024). These enhancements are crucial for allowing the sector to meet
both domestic demand and international standards.
The Vietnamese government plays a crucial role in shaping the future of the steel industry
through various programs aimed at promoting sustainable growth. Initiatives include the
enhancement of regulatory frameworks, the refinement of foreign investment policies, and the
development of trade relations to provide a conducive environment for industrial growth (Chia,
1993). Organizations like VNSTEEL have outlined sustainable strategies extending to 2050,
emphasizing the need for equipment upgrades for eco-friendly production and the significance of
partnerships to achieve these goals (Nguyen, 2023). Moreover, as the industry seeks a more
sustainable transition, it is recognized that programs must include not only businesses but also
governmental support and collaboration across all sectors. This comprehensive approach is
essential for tackling the challenges associated with carbon emission reduction and adapting to
the changing energy transition.
Vietnam's steel sector is positioned for significant expansion, particularly through collaboration
with prominent metallurgical partners to explore carbon-neutral technology and implement
renewable energy solutions. Recent research and case studies highlight the necessity for ongoing
adaptation and innovation, positioning the steel sector as a crucial element of Vietnam's overall
economic development and environmental sustainability objectives (Nguyen et al., 2021;
Nguyen & Nguyen, 2019). This study proposes to evaluate the evolution of green competitive
capabilities within Vietnam's steel sector during the energy transition by investigating worldwide
trends, identifying existing difficulties, and recommending strategic solutions. It offers insights
into policy frameworks, technology innovations, and market strategies to improve sustainability
and competitiveness within the industry.
Theoretical Froundationss of Competitive Capacity
Porter’s Competitive Advantage Theory
Porter (2008); Porter and Strategy (1980) theory of national competitive advantage posits that
innovation, productivity, and flexibility to market changes are essential factors influencing
industrial competitiveness. In the steel industry, technological innovations, enhancements in
efficiency, and environmental sustainability are essential for preserving worldwide market
dominance. To improve its competitive position, Vietnam’s steel sector must invest in sustainable
production technologies, incorporate automation, optimize energy usage, and embrace circular
economy principles. This encompasses the use of electric arc furnaces (EAFs) to supplant
conventional blast furnaces, employing hydrogen-based steelmaking to curtail carbon emissions,
and augmenting the utilization of recycled steel to diminish dependence on raw resources
(Gajdzik, Wolniak, & Grebski, 2023; Qian et al., 2024). Moreover, sophisticated digital solutions
like AI-driven process optimization, predictive maintenance, and energy management systems
can markedly improve operational efficiency by minimizing energy waste and augmenting
production reliability. Advanced manufacturing methodologies, including digital twins and IoT-
enabled surveillance, provide real-time monitoring of emissions and resource utilization, hence
enhancing production sustainability (Keshar, 2025). Additionally, Vietnam’s steel industry can
leverage green financing systems and carbon credit trading to mitigate emissions and finance
sustainable developments. Forming alliances with international research institutes and industry
leaders will promote information exchange and expedite the implementation of innovative green
technology (Dutz & Sharma, 2012). By adopting these transformative strategies, Vietnam’s steel
industry can enhance cost efficiency, diminish carbon emissions, bolster resilience to regulatory
shifts, and align with global sustainability objectives while securing long-term economic
viability and competitiveness in international markets.
Value Chain Theory
The value chain framework proposed by Gereffi, Humphrey and Sturgeon (2005) emphasizes the
significance of positioning within the global supply chain by identifying critical variables that
enhance industry competitiveness, such as technical innovation, supply chain efficiency, and
market integration. To bolster Vietnam’s steel industry within the global steel value chain, a
comprehensive strategy is necessary, encompassing improvements in production methodologies,
workforce competencies, infrastructural advancement, and legislative frameworks. A vital
component of enhancing Vietnam’s steel value chain is the strategic investment in research and
development (R&D) to promote innovation in green steel manufacturing (Ly et al., 2023). This
encompasses the development of energy-efficient steelmaking methods, the promotion of low-
carbon materials, and the execution of hydrogen-based steel production processes. Vietnam must
invest in advanced manufacturing technology, including automated quality control systems, AI-
driven predictive maintenance, and data analytics, to enhance operational efficiency and resource
usage. Workforce training and skill development are both vital. The implementation of Industry
4.0 technologies in steel manufacturing requires a highly skilled workforce adept in running
sophisticated gear, digital production systems, and emission-reduction technologies (Butt, 2020).
Cooperation among steel companies, vocational training institutes, and universities will be
essential for equipping Vietnam's steel workforce to satisfy the changing requirements of the
global steel sector. Enhancing infrastructure to facilitate effective logistics and material handling
is an additional goal. An advanced transport and logistics network, comprising sophisticated
ports, rail lines, and storage facilities, will mitigate inefficiencies in raw material procurement
and steel distribution. Creating green industrial zones focused on sustainable steel production
and powered by renewable energy sources will advance environmental objectives and improve
competitiveness (Gielen et al., 2020; Omer, 2008; Sarkar, 2013).
Green Competitiveness in the Global Steel Industry
Emerging Trends in Green Steel Production
The worldwide steel industry is undergoing a transformation towards sustainability, propelled by
technology advancements, regulatory mandates, and market demand for environmentally
friendly production methods. Numerous nations have undertaken proactive measures to increase
green steel manufacturing via enhancements in energy efficiency, carbon capture technology, and
the utilization of alternative fuels.
Nippon Steel has implemented hydrogen-based steelmaking to supplant conventional coal-reliant
techniques, markedly decreasing CO2 emissions (IEA, 2020). Moreover, Japan has been
advancing sophisticated carbon capture and utilization (CCU) technologies to significantly
diminish the carbon footprint of its steel sector (Kawai, Ozawa, & Leibowicz, 2022).
Government programs, including the Green Innovation Fund, offer financial assistance for
research and pilot projects to expedite the transition to low-carbon steel production.
POSCO has adopted energy-efficient steel recycling techniques, reducing raw material usage
(Kim, Ahn, & Roh, 2014). The corporation is investing in hydrogen-based direct reduction
technology as a component of its long-term aim to attain carbon neutrality by 2050. The South
Korean government has implemented a carbon price scheme and incentives for enterprises that
use low-emission technologies, urging steel manufacturers to focus on environmentally
sustainable production processes (Lee & Woo, 2020).
The HYBRIT initiative in Sweden seeks to achieve zero-carbon steel manufacturing by 2035
with hydrogen-based methods (SSAB, 2021). The European Union has implemented stringent
environmental rules and financial instruments, including the Emissions Trading System (ETS)
and the Carbon Border Adjustment Mechanism (CBAM), to promote sustainability in steel
manufacturing (Benson et al., 2022; Rossetto, 2023). Furthermore, prominent European steel
producers, such as ArcelorMittal and Thyssenkrupp, are diligently investing in green hydrogen
and electric arc furnace technology to diminish their dependence on fossil fuels.
Vietnam’s Current Position in Green Steel Production
Notwithstanding its swift expansion, Vietnam's steel sector encounters considerable obstacles in
conforming to global sustainability trends. The sector is significantly reliant on coal-based blast
furnaces, which not only generate substantial carbon emissions but also hinder the industry's
capacity to implement greener technology. The Vietnam Steel Association reports that the
industry's average CO2 emission per ton of crude steel is 2.51 tons, above the global average of
1.85 tons (VSA, 2024). Moreover, antiquated production techniques, excessive energy usage,
and dependence on imported raw materials intensify the industry's ecological impact.
In contrast to prominent worldwide manufacturers that have adopted electric arc furnaces (EAFs)
and hydrogen-based steelmaking, Vietnam currently lacks the necessary infrastructure and
investment to deploy these cleaner technologies on a large scale. The nation predominantly
utilizes classic blast furnace-basic oxygen furnace (BF-BOF) technology, which produces
considerably higher CO2 emissions than electric arc furnaces (EAFs). Moreover, Vietnam relies
heavily on imports of iron ore and coking coal, rendering its steel production susceptible to
global supply chain interruptions and price fluctuations.
Alongside technological hurdles, Vietnam encounters regulatory limitations and inconsistent
policy enforcement, which further impede the shift to green steel production. Despite the
government's lofty carbon reduction objectives, the existing rules and financial incentives to
facilitate the use of green steel are inadequate (Shen et al., 2022). Restricted access to green
financing, elevated capital expenditures for facility upgrades, and an absence of definitive
industry regulations hinder steel makers' investment in low-carbon solutions (Cordonnier &
Saygin, 2023). Furthermore, current environmental standards are sometimes inadequately
enforced, permitting conventional, high-emission practices to endure inside the business.
A significant concern is Vietnam’s elevated energy use in steel manufacturing. The nation’s
energy infrastructure continues to depend substantially on fossil fuels, indicating that the indirect
carbon impact remains considerable even with the implementation of EAF technology. In
contrast to European countries with substantial renewable energy resources for steel
manufacturing, Vietnam encounters difficulties in incorporating clean energy into its industrial
operations. The absence of indigenous hydrogen production infrastructure further constrains the
viability of hydrogen-based steelmaking in the foreseeable future (Gielen et al., 2020;
Shanmugam et al., 2021).
Absent targeted investments in sustainable technology, enhancements in energy efficiency, and
robust environmental policies, Vietnam’s steel industry risks behind in an increasingly carbon-
aware global market. Confronting these problems necessitates collaborative endeavors among
industry stakeholders, governmental bodies, and financial institutions to expedite the shift
towards green steel manufacturing (Mallett & Pal, 2022). Enhancing access to carbon credit
trading, fortifying green financing alternatives, and establishing more defined industry roadmaps
for decarbonization will be crucial for maintaining the competitiveness of Vietnam’s steel
industry in accordance with global sustainability trends.
Challenges to Green Competitiveness in Vietnam’s Steel Production
Policy and Regulatory Barriers
Vietnam has pledged to reduce carbon emissions in accordance with the Paris Agreement;
nevertheless, the execution of sustainable policies in the steel industry is progressing slowly and
remains disjointed. The government's endeavors to promote cleaner production are hindered by
inadequate enforcement mechanisms, ambiguous regulatory rules, and insufficient financial
incentives for broad implementation. The lack of rigorous emissions rules permits several steel
manufacturers to persist in utilizing high-carbon manufacturing techniques without
repercussions, resulting in minimal incentive for sector-wide change (Napp et al., 2014).
Furthermore, discrepancies in policy, bureaucratic procrastination, and overlapping authority
among regulatory agencies hinder the execution of environmental efforts (Caldwell, 1998).
Vietnam has shown interest in implementing carbon pricing methods; however, advancement has
been sluggish due to apprehensions regarding industrial competitiveness and the possible
financial strain on firms. Furthermore, the absence of a consistent reporting and verification
mechanism for greenhouse gas emissions impedes policy efficacy (Talbot & Boiral, 2018).
The government has not yet established a clear and enforced decarbonization strategy, resulting
in uncertainty for steel producers on long-term regulatory requirements. In the absence of
definitive market signals, steel companies are reluctant to engage in costly low-carbon
technologies due to concerns over unpredictable governmental changes (Bergström, Jonsson, &
Jespersen, 2023; Brown et al., 2008). The lack of coordinated support for the transition to green
energy sources, such as hydrogen-based steelmaking or electrification, disadvantages Vietnam
relative to countries that have established comprehensive green industrial plans. To comply with
international sustainability standards, Vietnam must create a legally binding framework with
specified emission reduction targets, implement carbon pricing mechanisms with gradual scaling
for industry adaptation, and establish incentive programs to promote green technology adoption.
Moreover, promoting public-private partnerships and participating in global climate financing
initiatives could secure essential funds to support the industry's transition to sustainability (Trade,
2023).
Technological Limitations
Vietnamese steel manufacturers encounter considerable obstacles in obtaining and deploying
innovative green technologies owing to financial limitations, technological deficiencies, and
insufficient technical proficiency. The shift from conventional blast furnace-basic oxygen
furnace (BF-BOF) production to electric arc furnaces (EAFs) or hydrogen-based steelmaking
necessitates significant capital investment, frequently exceeding the financial capabilities of
small and medium-sized firms (SMEs). The substantial initial expenses associated with
equipment like electric arc furnaces, direct reduction iron (DRI) plants, and hydrogen
electrolyzers present a considerable obstacle. Moreover, the operational and maintenance
expenses of these sophisticated systems are substantial, necessitating further financial investment
and specialized personnel for prolonged utilization.
The absence of domestic providers for critical components, like green hydrogen infrastructure,
carbon capture and storage (CCS) systems, and advanced smelting technologies, exacerbates the
adoption process. Many of these technology must be imported from rich nations, elevating costs
and restricting access for numerous Vietnamese steel manufacturers. Moreover, the technical
proficiency necessary to run and maintain these systems is limited, due to the absence of
specialized training programs for steel industry personnel in Vietnam. The shift to green steel
production necessitates labor reskilling; yet, limited local institutions provide pertinent courses in
hydrogen-based steelmaking, digital manufacturing, and process optimization (Gajdzik, Wolniak,
& Grebski, 2023).
In the absence of competitive financing alternatives, such as government-supported green loans,
foreign investment incentives, and carbon credit trading systems, steel manufacturers may find it
difficult to rationalize the expenses associated with transitioning to low-carbon manufacturing
techniques (Algers & Åhman, 2024). Insufficient government subsidies and the lack of explicit
tax incentives deter steel manufacturers from investing in sustainability efforts (Napp et al.,
2014). Conversely, nations such as Germany and South Korea offer substantial financial
initiatives to bolster green steel projects, thereby enhancing the competitiveness of their steel
sectors. To expedite the adoption of green technology, Vietnam requires a systematic financial
support framework, encompassing preferential interest rates for green initiatives, tax incentives
for firms that diminish emissions, and strategic alliances with international financial entities to
ensure sustained investment in sustainable steel manufacturing.
Competitive Pressure from Imports
The domestic steel industry in Vietnam faces competition from inexpensive imports from China,
which constituted 77% of imported hot-rolled coils in 2024. Chinese steel makers capitalize on
economies of scale, government subsidies, and reduced production expenses, enabling them to
provide steel at far lower prices than their Vietnamese counterparts. Moreover, China possesses a
sophisticated supply network and infrastructure that further diminishes production costs,
conferring a pricing advantage to its steel goods over Vietnamese steel in both domestic and
international markets (Dinh, 2013).
This fierce pricing rivalry deters local companies from investing in green technologies, since the
supplementary expenses of eco-friendly production processes may further diminish their market
competitiveness. The implementation of green steel production techniques, including electric arc
furnaces (EAFs) and hydrogen-based steelmaking, necessitates substantial capital expenditure
(Cavaliere & Cavaliere, 2019). Nonetheless, the reduced prices of imported steel hinder
Vietnamese companies from transferring these expenses to customers, resulting in a financial
deterrent to adopting low-carbon technologies.
Moreover, Vietnamese steel exporters encounter increasing pressure from global trade
restrictions, including the EU’s Carbon Border Adjustment Mechanism (CBAM), which levies
taxes on high-carbon steel imports. This policy imposes penalties on exporters utilizing
emissions-intensive production techniques, hence complicating access for Vietnamese steel
manufacturers to European markets unless they adopt expensive emissions reduction strategies.
Furthermore, more stringent environmental rules in key export markets such as the United States
and Japan are expected to provide additional challenges for Vietnamese steel companies that do
not comply with sustainability norms.
In the absence of government engagement, including anti-dumping measures, financial
assistance for technological advancements, or subsidies for green steel production, local
enterprises may encounter escalating challenges in competing both domestically and
internationally (Zhou & Fang, 2020). The government might also investigate trade agreements
and bilateral collaborations to enhance technology transfer and bolster indigenous production
capabilities. Vietnam must establish a definitive industrial policy that harmonizes
competitiveness with sustainability, enabling its steel sector to prosper while adhering to global
environmental norms.
Strategies for Enhancing Green Competitiveness
Policy Support and Government Initiatives
The Vietnamese government may significantly influence green steel production by enacting
comprehensive regulations that encourage and regulate the shift towards sustainable
manufacturing. A primary strategy entails offering tax incentives for investments in low-carbon
technologies (Gao & Wang, 2021). These incentives may include corporate tax reductions,
exemptions from import duties on green technology equipment, and subsidies for steel
manufacturers adopting energy-efficient methods. Moreover, government-sponsored funding
initiatives can stimulate private sector investment in environmentally sustainable production
facilities and research on green steel advancements (Cheung & Hong, 2021).
A vital component of policy support is the enhancement of environmental rules to conform to
international carbon reduction obligations (Brunner, Flachsland, & Marschinski, 2012). Although
Vietnam has demonstrated its dedication to reducing emissions in accordance with the Paris
Agreement, its regulatory structure is disjointed and lacks consistent enforcement. Enforcing
stringent emissions limits, obligatory carbon reporting mandates, and sanctions for non-
compliance might propel the steel industry towards more sustainable practices (Berhad, 2020).
Implementing an emissions trading system (ETS) such to those in the European Union and South
Korea can offer a market-driven strategy for diminishing carbon footprints, enabling steel
manufacturers to trade carbon credits while transitioning to more sustainable technologies.
Moreover, cultivating public-private collaborations is crucial for advancing research and
development (R&D) in green steel manufacturing. Joint efforts among government entities,
academic institutions, and private firms can expedite technological progress in energy-efficient
production techniques, alternative raw materials, and carbon capture utilization and storage
(CCUS) technology (Davoodi et al., 2023; Saxena et al., 2024). Research funds and innovation
hubs focused on sustainable metallurgy are essential for upgrading the sector. Moreover,
governmental bodies might collaborate with steel producers to establish pilot initiatives that
showcase the feasibility of low-carbon manufacturing paradigms, consequently mitigating
investment risks for early adopters (Hunter et al., 2019).
In addition to national legislation, Vietnam can collaborate with international organizations and
trade partners to obtain financial and technical assistance for the advancement of green steel
production. Engagement in international climate finance initiatives, such the Green Climate
Fund (GCF) and the sustainable infrastructure programs of the Asian Development Bank, can
furnish essential money for sector-wide transformations (Carbajo, 2023). Bilateral cooperation
agreements with nations excelling in green steel technology, such as Germany and Sweden, can
promote knowledge transfer and collaborative ventures that enhance Vietnam’s steel industry.
Through the implementation of a holistic policy framework that combines financial incentives,
regulatory enforcement, and joint research and development initiatives, the Vietnamese
government may foster an environment favorable to green steel manufacturing. This strategy not
only improves the industry's competitiveness in international markets but also guarantees long-
term sustainability in accordance with Vietnam's climate obligations and economic growth
objectives.
Investment in Green Technologies
To stay competitive, Vietnamese steel producers must emphasize extensive modernization
initiatives that fit with global sustainability trends while ensuring economic viability. A major
phase in this transformation is the conversion from conventional blast furnaces, dependent on
coal and coke, to electric arc furnaces (EAFs) (Cardarelli & Barbanera, 2023). In contrast to blast
furnaces, electric arc furnaces (EAFs) employ electricity to melt scrap steel, considerably
diminishing carbon emissions and reliance on virgin raw materials. The implementation of
Electric Arc Furnaces (EAFs) facilitates enhanced flexibility in steel production, hence
simplifying the integration of renewable energy sources like solar and wind power into the
manufacturing process (Hu et al., 2024). This transformation necessitates significant investment
in grid upgrading and infrastructure to guarantee that Vietnam’s electrical supply can
accommodate the heightened demand from steel manufacturing without dependence on fossil
fuel-based energy sources.
A vital method entails the implementation of carbon capture and storage (CCS) technologies,
which can assist in reducing the industry's carbon footprint. CCS systems function by
sequestering CO2 emissions produced during steelmaking and either storing them
subterraneously or employing them in industrial uses (Bennaceur, 2014). The effective execution
of CCS in Vietnam necessitates both financial and technical assistance, as the nation now lacks
the infrastructure essential for extensive carbon storage. Government policies that promote
investment in CCS, including subsidies and tax advantages, will be crucial for the viability of
this technology for Vietnamese steel manufacturers. Furthermore, international cooperation with
nations possessing superior CCS technologies can expedite technology transfer and diminish
implementation expenses (McAlinden, 2022).
Furthermore, augmenting the utilization of recycled steel offers a pragmatic and economical
approach to diminishing reliance on raw materials and mitigating the ecological consequences of
steel manufacturing (da Rocha et al., 2024). By augmenting domestic steel recycling facilities
and improving scrap collection systems, Vietnam can reduce its dependence on imported iron ore
and coal, thereby increasing the industry’s resilience to global supply chain disruptions.
Promoting the utilization of secondary steel not only mitigates carbon emissions but also
preserves natural resources and lowers production expenses (Swennenhuis, de Gooyert, & de
Coninck, 2022). Implementing policies that encourage the collecting, sorting, and processing of
scrap steel, such as extended producer responsibility (EPR) initiatives, can enhance the circular
economy in Vietnam's steel industry.
By implementing these strategies—shifting to Electric Arc Furnaces (EAFs), embracing Carbon
Capture and Storage (CCS) technology, and increasing steel recycling—Vietnamese steel firms
can markedly improve their competitiveness in the global market while conforming to
international decarbonization initiatives. These changes necessitate a cooperative endeavor
among industry stakeholders, governments, and financial institutions to surmount technological
and economic obstacles. With appropriate regulatory support, investment incentives, and
strategic alliances, Vietnam's steel industry may become a leader in sustainable steel production
and achieve long-term growth in the global economy.
Market Diversification and Export Strategy
To stay competitive, Vietnamese steel producers must emphasize extensive modernization
initiatives that fit with global sustainability trends while ensuring economic viability. A major
phase in this transformation is the conversion from conventional blast furnaces, dependent on
coal and coke, to electric arc furnaces (EAFs) (Cavaliere & Cavaliere, 2019; Dutta et al., 2020).
In contrast to blast furnaces, electric arc furnaces (EAFs) employ electricity to melt scrap steel,
considerably diminishing carbon emissions and reliance on virgin raw materials. The
implementation of Electric Arc Furnaces (EAFs) facilitates enhanced flexibility in steel
production, hence simplifying the integration of renewable energy sources like solar and wind
power into the manufacturing process. This transformation necessitates significant investment in
grid upgrading and infrastructure to guarantee that Vietnam's electrical supply can accommodate
the heightened demand from steel manufacturing without dependence on fossil fuel-based energy
sources.
A vital method entails the implementation of carbon capture and storage (CCS) technologies,
which can assist in reducing the industry's carbon footprint. CCS systems function by
sequestering CO2 emissions produced during steelmaking and either storing them
subterraneously or employing them in industrial uses (Bennaceur, 2014). The effective
execution of CCS in Vietnam necessitates both financial and technical assistance, as the nation
now lacks the infrastructure essential for extensive carbon storage. Government policies that
promote investment in CCS, including subsidies and tax advantages, will be crucial for the
viability of this technology for Vietnamese steel manufacturers. Furthermore, international
cooperation with nations possessing superior CCS technologies can expedite technology transfer
and diminish implementation expenses
Furthermore, augmenting the utilization of recycled steel offers a pragmatic and economical
approach to diminishing reliance on raw materials and mitigating the ecological consequences of
steel manufacturing (da Rocha et al., 2024). By augmenting domestic steel recycling facilities
and improving scrap collection systems, Vietnam can reduce its dependence on imported iron ore
and coal, thereby increasing the industry's resilience to global supply chain disruptions.
Promoting the utilization of secondary steel not only mitigates carbon emissions but also
preserves natural resources and lowers production expenses (Swennenhuis, de Gooyert, & de
Coninck, 2022). Implementing policies that encourage the collecting, sorting, and processing of
scrap steel, such as extended producer responsibility (EPR) initiatives, can enhance the circular
economy in Vietnam's steel industry.
By implementing these strategies—shifting to Electric Arc Furnaces (EAFs), embracing Carbon
Capture and Storage (CCS) technology, and increasing steel recycling—Vietnamese steel firms
can markedly improve their competitiveness in the global market while conforming to
international decarbonization initiatives. These changes necessitate a cooperative endeavor
among industry stakeholders, governments, and financial institutions to surmount technological
and economic obstacles (Ndou, 2004). With appropriate regulatory support, investment
incentives, and strategic alliances, Vietnam's steel industry may become a leader in sustainable
steel production and achieve long-term growth in the global economy.
Conclusion
The shift to green steel manufacturing is essential and advantageous for Vietnam's steel sector,
considering the growing worldwide focus on carbon reduction and sustainable industrial
practices. As environmental rules become more stringent and global markets emphasize
sustainable production, Vietnamese steel companies must aggressively implement cleaner
technology to maintain competitiveness. By using innovative manufacturing techniques such as
hydrogen-based steelmaking, electric arc furnaces, and carbon capture and storage (CCS)
systems, the sector may substantially reduce its emissions while preserving high production
efficiency. Furthermore, enhancing regulatory frameworks, such as more stringent emissions
restrictions, carbon pricing mechanisms, and environmental reporting obligations, will facilitate
a more organized and transparent transition to sustainability. The Vietnamese government must
utilize international trade agreements and engage with global partners to obtain money,
technological expertise, and market access for its green steel efforts. Moreover, research ought
to concentrate on evaluating the efficacy of current regulations, scrutinizing technological
viability, and examining the economic ramifications of sustainable transitions within the industry.
Empirical studies offer significant insights for industry stakeholders, legislators, and investors,
assisting them in formulating policies that reconcile economic growth with environmental
stewardship. By adopting these steps, Vietnam’s steel sector may establish itself as a pioneer in
sustainable manufacturing, guaranteeing long-term resilience in an increasingly environmentally
aware global market.
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