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Mobility electrification to tackle air pollution in Vietnam

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Air pollution is the biggest threat to human health, causing about one in every nine deaths globally.

According to the World Health Organization (WHO), air pollution leads to about seven million premature deaths each year. Fine particulate matter (PM2.5) can cause or aggravate diseases such as asthma, cancer, stroke, and lung disease. High PM2.5 concentrations also adversely affect children’s cognitive development, cause mental health problems, and complicate underlying diseases such as diabetes.

Mobility electrification to tackle air pollution in Vietnam
Ha Quoc Dung, monitoring and reporting specialist The Institute of Strategy and Policy on Natural Resources and Environment

In 2023, only 10 countries and 9 per cent of cities met the WHO’s PM2.5 standard. PM2.5 is also linked to climate change, with fossil fuel emissions being the main cause. Tackling air pollution and climate change simultaneously is feasible, offering opportunities to improve the environment and public health.

The same year, Vietnam ranked 22nd in the list of countries with the worst air quality, with an average AQI of 88, reflecting a worrying pollution situation. Although not as severe as Bangladesh or Pakistan, the pollution level in Vietnam is still at an unhealthy level, especially dangerous for sensitive groups such as children, the elderly and people with respiratory diseases.

On the morning of January 3, Hanoi recorded the highest air pollution level in the world with an average AQI of 284, according to IQAir. This is a very harmful level for health, especially for sensitive groups such as children, the elderly and people with respiratory diseases. Hanoi surpassed the top polluted cities such as Delhi and Karachi, maintaining its position in the group of the most polluted cities globally.

In Tay Ho district, the AQI reached 557, a dangerous level, while neighbouring areas all exceeded 400. Haiphong also recorded AQI 272. On the evening of February 10, Hanoi continued to be recorded as the most polluted city in the world, with an AQI of 188.

By January 24, Ho Chi Minh City had risen to second place in the list of most polluted cities, with PM2.5 concentrations 11 times higher than the WHO’s recommendations. This situation poses a major challenge, requiring emission control measures, traffic improvement, and increased green areas to protect public health.

Vietnam needs to reduce traffic emissions through measures such as road cleaning to reduce dust, traffic regulation to reduce congestion, building low-emission areas, developing public transport, electrifying vehicles, supporting the production and use of electric vehicles (EVs) through credit mechanisms, developing charging station infrastructure, and subsidising EVs. At the same time, it is necessary to strictly control emission sources and raise public awareness to improve sustainable air quality.

Modern transport policy

In 2024, around 17 million EVs were sold globally, with 65 per cent in China. Europe sold around 3 million EVs, with the UK seeing a 58 per cent on-year increase in battery EV sales thanks to heavy investment. The UK government required zero-emission vehicles to account for 22 per cent of sales in 2024, aiming for 80 per cent by 2030 and 100 per cent by 2035.

In the first nine months of 2024, EV sales in China increased by 31 per cent, driven by strong growth in plug-in hybrid EVs and extended-range ones.

Major manufacturers are pushing into this segment from 2025. The Chinese government has implemented a transport electrification policy to reduce air pollution and has rolled out a series of strong support measures to encourage use of EVs and plug-in hybrids, including credits, subsidies, tax incentives, and charging infrastructure development.

According to Gartner, the global EV fleet will reach 85 million by the end of 2025, with China accounting for more than half (49 million), far ahead of Europe (20.6 million) and North America (10.4 million). China’s new energy vehicle industry is expected to expand to $3.16 billion by 2026. Shenzhen is a prime example, having converted all 16,000 buses from diesel to electric since 2017 thanks to government subsidies.

China also requires at least 30 per cent of new government vehicles purchased each year to be classed as new energy, in order to reach its net-zero emissions target by 2060. To maintain this progress, CO2 emissions from new passenger cars must fall to zero by 2035, while emissions from commercial vehicles need to fall 74 per cent from 2012 levels.

Vietnam, especially large cities such as Hanoi, Ho Chi Minh City and Haiphong, are facing serious air pollution due to the increase in personal vehicles using fossil fuels.

According to the experience of developed countries such as the UK, the US, France, Sweden, and China, electrifying transport through credits, encouraging EVs, implementing low emission zones, and applying strict emission standards can effectively reduce air pollution and greenhouse gases.

Mobility electrification to tackle air pollution in Vietnam
Mobility electrification to tackle air pollution in Vietnam, Photo: Le Toan

Electrification experience

To make this transition, Vietnam needs a comprehensive strategy, combining financial incentives, infrastructure investment and appropriate traffic regulation policies.

First, financial support and incentives for consumers and businesses are key. Countries like France and the US have been successful with subsidy and rebate schemes. The California Clean Vehicle Rebate Programme has allocated more than $1.4 billion since 2009, providing $7,500 in subsidies to EV buyers, helping to reduce nearly 10 million tons of CO2. France supports €4,000-7,000 for low-income people to buy EVs.

Vietnam can learn from this by implementing financial support, credits, exemptions from special consumption tax, reductions in import tax on components, and preferential credit support for domestic manufacturing enterprises. The policy of exchanging old cars for electric cars, like China, is also an effective solution to replace polluting vehicles.

Second, developing charging infrastructure and smart grids is key to popularising EVs in Vietnam. Currently, the lack of charging stations is a major barrier. China has succeeded by investing heavily in fast charging networks, with more than 2 million charging stations nationwide. Vietnam needs to plan charging stations in large cities, public parking lots, shopping malls and highways.

The government should cooperate with private enterprises to develop fast charging stations and integrate smart grids, optimising renewable energy. Mobile charging station models and home charging stations should also be deployed to increase accessibility for people.

Third, implementing a low-emission zone policy and restricting old petrol vehicles in Hanoi, Ho Chi Minh City, and other crowded cities is an effective solution to reduce pollution. Such zones have been successful in Beijing, London, and Milan, significantly reducing emissions by restricting high-emission vehicles from entering the central area.

Hanoi and Ho Chi Minh City can pilot a ban on old low-emission vehicles, while charging emission fees for petrol and diesel vehicles. Prioritising dedicated lanes for EVs and electric buses is also a way to encourage the use of clean vehicles.

Fourth, implementing strict emission standards and promoting domestic EV production is a necessary direction. The US has been successful with various initiatives, and China also aims for 20 per cent of vehicles on the road to be clean. Vietnam can raise emission standards for fossil fuel vehicles and encourage investment in EV production.

The government should aim for 30 per cent of new vehicles sold by 2030 to be zero-emission vehicles, while supporting companies like VinFast through EV credits, tax incentives, research and development subsidies, and incentives for domestic consumption and exports.

Fifth, boosting the use of EVs in public transport and freight transport is an effective solution to reduce pollution. China has required buses and taxis in many major cities to switch to electric or plug-in hybrid vehicles. Vietnam can apply a similar model, requiring urban bus routes and taxis to gradually switch to EVs, while providing financial and infrastructure support to transport units. The government should also offer tax incentives or subsidies to logistics enterprises investing in electric trucks, contributing to reducing emissions from freight transport.

By synchronously implementing these solutions, Hanoi, Ho Chi Minh City, and Haiphong will not only improve air quality but also promote a green economy, reduce dependence on fossil fuels, and create momentum for the development of the domestic EV industry.

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HoREA Proposes Allowing Businesses to Build Worker Housing Inside Industrial Parks

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The Ho Chi Minh City Real Estate Association (HoREA) has proposed a pilot mechanism that would allow businesses to invest in and construct worker housing within industrial parks.

In a document submitted to the Prime Minister, contributing feedback on a draft pilot policy aimed at boosting social housing development, HoREA suggested that businesses, cooperatives, and cooperative unions operating within industrial parks be permitted to build accommodation for their workers. It also called for allowing companies to rent housing outside industrial parks for the same purpose.

HoREA emphasized that all costs related to building or renting worker housing should be recognized as legitimate business expenses and be included in the enterprise’s operating costs.

The association further recommended expanding the policy framework to allow companies within industrial parks to lease social housing or worker accommodation built by third-party developers outside the park premises.

According to Mr. Lê Hoàng Châu, Chairman of HoREA, the current Housing Law (2023) only allows companies to rent worker housing inside industrial parks, without clearly defining whether they can rent social housing outside the parks or construct such housing themselves.

With worker housing demand at industrial parks far exceeding supply, HoREA pointed out that current social housing and dormitory offerings are inadequate. Meanwhile, commercial housing remains out of reach for most workers due to high prices. Therefore, the association urges the government to introduce policies enabling manufacturing businesses—despite not operating in real estate—to develop their own accommodation solutions for employees.

HoREA underscored that such policies would create a strong legal foundation, empowering enterprises and cooperatives to proactively resolve housing issues for workers. If allowed to construct their own housing, companies could ensure homes go to those in need, boosting employee retention, improving living standards, and supporting sustainable growth in industrial zones.

The association also proposed financial support mechanisms, including tax incentives, access to preferential loans, or government-matching support, to reduce the financial burden on companies participating in worker housing development.

Previously, many businesses had expressed a desire to buy land, build housing, and offer installment-based homeownership plans to workers, whereby employees would pay monthly through salary deductions. While this model helps workers secure long-term housing, legal procedures remain a major hurdle.

Providing accommodation has increasingly become part of corporate strategies to retain labor, alongside other employee welfare policies. For example, Nissei Electric Vietnam (Linh Trung 1 Export Processing Zone, Thu Duc City) has built a dormitory complex with 285 shared rooms, housing up to 2,280 workers. Eternal Prowess Vietnam (District 12) and Thien Phat Company (Linh Trung 2 EPZ) have also invested in on-site worker housing. Thien Phat’s project includes 368 units (35m² each), rented at VND 2.2 million/month, with 80% of the units for families and 20% for shared accommodations.

As of Q2 2024, Ho Chi Minh City has 18 industrial parks with around 1,700 businesses employing approximately 320,000 workers. Citywide, over 1.3 million people are employed in factories. However, there are only 16 official worker housing complexes, accommodating about 22,000 people. The majority of workers rely on rented rooms or stay with acquaintances—often sharing 12m² rooms among 2–3 people, which consumes 15–20% of their monthly income.

From 2021 to the present, Ho Chi Minh City has completed six social housing projects with 2,700 units and is building four more with 3,000 units. By April 30, the city aims to resolve legal hurdles and break ground on 5–6 additional social housing projects, totaling around 8,000 units.

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Billionaire Trần Bá Dương’s VND 2,000 Billion, 200-Hectare Industrial Park in Thái Bình Could Begin Operations This Year

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The Thaco – Thái Bình Industrial Park, covering more than 194 hectares with an investment of over VND 2,100 billion, is expected to become operational within this year, according to the development plan.

Recently, provincial leaders of Thái Bình conducted an on-site inspection of land clearance efforts and infrastructure construction progress at the Thaco – Thái Bình Industrial Park located in Quỳnh Phụ District.

To date, Quỳnh Phụ District has completed compensation and land clearance for nearly 192 hectares of agricultural land, involving the land recovery of 1,067 households to hand over to the investor for project implementation.

Currently, the district is focusing on clearing the remaining land, involving 94 households in Lương Cầu Hamlet, An Cầu Commune. At the same time, it is coordinating with the electricity sector to relocate a 220kV high-voltage power line.

On the investor’s side, groundwork construction is underway, including roadbeds, internal roads, stormwater and wastewater drainage systems, and communication infrastructure within the industrial park.

The Thaco – Thái Bình Industrial Park is a specialized high-tech agricultural industrial park proposed by THACO Group (chaired by billionaire Trần Bá Dương) since 2017, originally planned to cover 250 hectares. By July 2017, the provincial authorities agreed to incorporate the project into Thái Bình’s industrial development master plan.

In August 2020, THACO officially broke ground on the industrial park’s infrastructure. A year later, in August 2021, the project’s investment certificate was revised, confirming a total investment of over VND 2,100 billion and a land area of more than 194 hectares. The project is being developed across An Thái, An Ninh, and An Cầu communes in Quỳnh Phụ District.

According to the roadmap, the investor is determined to complete and officially launch the project in 2025.

The Thaco – Thái Bình Industrial Park is designed as a dedicated high-tech agricultural zone, featuring various functional subdivisions including an administration center, agro-food processing zone, high-tech agricultural training center, experimental farms, agricultural materials production area, and a cargo transport port.

This project is considered one of the key developments in Thái Bình Province, playing a crucial role in the region’s socio-economic growth strategy.

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High-tech workforce creation must become front and centre

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Vietnam’s semiconductor industry has immense potential, driven by strategic advantages and a growing market. However, addressing gaps in workforce development, training infrastructure, and industry collaboration is crucial.

According to Statista Market Insights, the Vietnamese semiconductor market is forecast to see healthy growth with a compound annual growth rate of 9.62 per cent between 2024 and 2027, reaching a market volume of $26.20 billion.

Le Quan, Senior lecturer Faculty of Engineering Fulbright University Vietnam
Le Quan, Senior lecturer Faculty of Engineering Fulbright University Vietnam

Vietnam also boasts over 30 foreign-led companies in integrated circuit (IC) design, including established players like Renesas, Synopsys, and Cadence alongside innovative startups like Ampere, ADTechnology, Inphi, FingerVina, Dolphin Technology. The sector also encompasses numerous smaller firms with around 100 or fewer employees.

By 2040, Vietnam is poised to become a crucial player in the global semiconductor ecosystem, encompassing all aspects of the industry, from design and manufacturing to assembly, test, and packaging (ATP) and equipment fabrication.

The strategy emphasises the importance of fostering a skilled workforce. Vietnam boasts a strong talent pool in the semiconductor industry, with 50,000 design engineers, 200,000 electronics engineers, 500,000 technical workers, and one million software engineers. To further enhance this workforce, the strategy aims to transition up to 30,000 personnel from the existing pool of 350,000 IT and telecommunications engineers.

The global semiconductor packaging landscape is undergoing a rapid transformation, driven by a surge in new facilities across Asia. The wave of semiconductor investment in Vietnam and the industry’s demand for personnel have driven educational institutions, from top universities to vocational colleges, to launch training programmes related to semiconductors.

Last year, major universities such as Hanoi University of Science and Technology, University of IT – Vietnam National University Ho Chi Minh, and the University of Engineering and Technology announced engineering programmes specialising in semiconductors. Younger universities like FPT and Phenikaa are also making significant investments in this area, not only in training initiatives but also in facilities and equipment.

However, to truly understand the current landscape of semiconductor training in Vietnam, it is essential to look at the regulations and current state of training schemes in this field from 2024 backward.

Firstly, the high costs associated with establishing chip fabrication facilities make it an impractical investment for Vietnam. The country’s resources would be better allocated towards sectors that promise more immediate returns, such as ATP and IC design. Advanced packaging technologies represent a feasible and profitable entry point in the global semiconductor value chain, aligning with Vietnam’s strengths in low-cost, adaptable labour.

Vietnam should focus on drawing overseas funding into ATP operations, leveraging its lower labour costs to attract foreign companies. The availability of a high-quality but affordable workforce makes Vietnam an attractive destination for packaging, testing, and assembly processes. Prioritising such investment with advanced packaging capabilities will allow Vietnam to build a competitive advantage in this sector.

Meanwhile, the IC design segment represents a high-value opportunity with significant global demand. To capitalise on this, Vietnam should proactively seek partnerships and outsourced projects from international IC design firms. Engaging Vietnamese firms in IC design outsourcing allows for skill transfer, builds local capacity, and positions Vietnam as a reliable partner in the global semiconductor value chain.

Collaboration between industry, educators, and government should be boosted. Building a cohesive semiconductor workforce will require closer partnerships between educational institutions, industry players, and the government.

By integrating real-world projects into academic programmes, Vietnamese graduates will better understand the industry’s practical requirements and be more prepared to transition directly into the workforce. Schemes that bring industry projects to academia will provide students with hands-on experience, making them job-ready upon graduation.

At the same time, establishing specialised training for semiconductor roles, particularly in ATP and IC design, will be essential to reduce the industry’s current reliance on costly in-house training. This should involve upskilling engineers from related fields through short, intensive courses designed to meet industry standards.

Partnerships with international organisations for curriculum development, as well as accreditation for training initiatives, will help elevate Vietnam’s semiconductor workforce to global standards.

Vietnam can also implement “train-the-trainer” programmes. Its academic institutions face a shortage of faculty members with practical experience in semiconductor technologies. By leveraging international partnerships, Vietnam can upskill its instructors, who can then transfer these skills to future generations of engineers.

Notably, several US institutions have expressed willingness to offer training to Vietnamese trainers, a vital step towards creating a sustainable, locally driven semiconductor education ecosystem.

Finally, effective workforce development in the semiconductor industry requires government involvement in fostering a supportive ecosystem. Policies that incentivise partnerships between academia and industry, such as funding for research and development and joint training programmes, are critical.

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