Vietnam’s cement makers race to meet WHR deadline

Vietnam’s cement sector is finally emerging from its slump: in 1H25, output rose 18 per cent YoY to 49.8Mt, while total consumption climbed 14 per cent to 54Mt. Domestic sales led the rebound at 37.5Mt (+18 per cent), while exports were up six per cent to 17Mt, valued at approximately US$635m, according to the latest figures published by the Ministry of Construction’s Department of Science, Technology, Environment and Building Materials.

But the recovery is shadowed by mounting trade threats. The US raised tariffs on cement imports from Vietnam to 20 per cent, effective 1 August 2025 — doubling the previous 10 per cent rate and raising serious cost concerns for exporters. Market participants warn that while a 10 per cent tariff might have been manageable, the 20 per cent increase is unsustainable unless prices are passed down the chain. Meanwhile, Taiwan has imposed import duties (varying depending on the cement manufacturer) on Vietnamese cement following an investigation into allegations of dumping.

Recovery position
Given this uncertainty, the benefits for Vietnamese plants in slashing operating costs are self-evident but will also soon become mandatory. Under the government’s Building Materials Development Strategy (Decision 1266), all existing clinker lines producing over 2500tpd will be required to install and operate waste-heat recovery (WHR) systems by 31 December 2025, while all new plants must integrate WHR from day one.

Recent reports suggest approximately 60 per cent of eligible lines are now equipped with WHR. Once fully deployed across all 63 mandated lines, Vietnam could unlock ~475MW of captive power—comparable to a large thermal station. Significant EPC projects are underway at Nghi Son Cement Co’s plant (won by Anhui Conch–Kawasaki) and Vicem Ha Tien’s Kien Luong plant, which is now tendering internationally.

Examples from operating systems highlight why WHR is becoming standard:                  

• Vicem But Son’s 12MW plant, commissioned in early 2024, generated 69.6m kWh last year — covering 25–30 per cent of site demand, saving VND121.7bn (US$4.8m), and avoiding ~86,000t CO₂.
• Long Son Cement produces around 260mkWh annually from its WHR system, roughly 30 per cent of demand, with annual savings close to VND400bn.
• Thanh Thang Cement’s 8.65MW WHR unit, inaugurated in 2025, is hailed internally as a “technological breakthrough” for cutting both costs and emissions.
• Xuan Thanh Cement has gone further, installing WHR across three lines with a combined output of nearly 50MW, claiming up to one-third power autonomy.

The incentive is reinforced by rising power costs. Vietnam Electricity (EVN) lifted average tariffs by 4.8 per cent on 10 May 2025 — the fourth hike since early 2023 — bringing the industrial benchmark to VND2204/kWh (ex-VAT). With the sector consuming ~9.5bnkWh annually, WHR offsets translate directly into competitiveness.

Meanwhile, the launch of Vietnam’s emissions trading scheme (ETS) on 11 June 2025 has added urgency. Cement is one of three pilot sectors alongside power and steel. Facilities will receive allowances for 2025–26 later this year, but must purchase credits if they exceed their caps. Up to 30 per cent of liabilities can be covered with offsets, including credits from the Japan–Vietnam Joint Crediting Mechanism (JCM). Plants able to demonstrate lower grid-related emissions intensity through WHR will carry a distinct advantage.

Foreign capital and expertise
Vietnam is also opening its WHR drive to foreign financiers and contractors. A US$75m Green Climate Fund–backed facility administered by the World Bank’s “Scaling Up Energy Efficiency (VSUEE)” project is de-risking industrial energy-efficiency loans. Cement sub-projects in its pipeline include Hoang Mai and Tam Diep, both planning WHR systems.

Elsewhere, Anhui Conch–Kawasaki secured the WHR package at Nghi Son Cement Corp’s Fai Thuong plant, while Shanghai Conch–Kawasaki delivered Thanh Thang’s 8.65MW unit. Vicem Ha Tien’s Kien Luong project has been explicitly marketed to global bidders. By drawing on overseas suppliers and concessional finance, Vietnamese producers are accelerating compliance with Decision 1266 and hedging execution risk.

External markets only strengthen the case. The EU CBAM enters its paid phase in January 2026, raising the premium on carbon-efficient exports. While Europe remains a small outlet for Vietnam’s clinker, the mechanism has become a bellwether for financiers and international buyers.

The US tariff and Taiwanese anti-dumping duties signal a less forgiving environment for cost-heavy exporters. Plants that can demonstrate cost control and decarbonisation—through WHR and alternative fuels—will be better placed to maintain margins and secure contracts.