Mitsubishi, don’t build Quang Trach 1.

About Quang Trach 1

Quang Trach 1, the first of two proposed coal power stations, is located in Quảng Bình province in central Vietnam.

The groundbreaking of Quang Trach 1 took place in July 2011, but the plant has remained unfinished. Part of the reason for delay has been land acquisition, with communities in the area alleging that they have not been appropriately compensated or resettled and remain concerned about environmental pollution. According to an article written in 2018:

• Although there was a plan created to relocate 78 households, which included land allotted for both residences and agricultural purposes, the relocation plan had not yet been implemented.
• Local authorities asserted that an additional 400 households who lived outside the land being acquired to build the plant wished to be resettled because of fears of environmental pollution.
• As these issues had not been addressed, in 2018, villagers blockaded the plants’ construction site seeking responses from the project’s sponsors.

There is also concern that the construction of the adjacent coal port would cause pollution by submerging waste and sludge into the sea. Given all these issues, in February 2021, it was reported that the government of Vietnam would assess the impacts of the project through the Ministry of the Environment.

It is unclear that these issues have been addressed. Without clear plans for resettlement and mitigation of environmental harms, Quang Trach 1 represents serious environmental and social risk to Mitsubishi and by extension its investors.

Vietnam is in a state of transition, increasing renewables in its energy mix

Vietnam’s energy market is in a state of transition, with the government continuing to finalise its power development plan to reduce its dependency on coal power. It has the opportunity to develop cleanly and sustainably – an opportunity it has taken advantage of by expanding solar power in its energy mix. In 2020, Vietnam became the third largest solar power market.

By building this coal power project, Mitsubishi will undoubtedly face risks to its reputation, being seen as pushing coal power on a country that is trying to transition out of polluting power.

Mitsubishi has already faced reputational damage because of its involvement in Vung Ang 2, and continues to experience significant backlash from the investor community.

Protestors calling on Mitsubishi to get out of the Vung Ang 2 coal power station in Vietnam.

Mitsubishi isn’t demonstrating that it understands climate risk

Any plans to build new coal power plants such as Quang Trach 1 are completely out of line with the Paris Agreement goal of keeping global warming to 1.5°C.

While Mitsubishi claims to recognise the risks to its business posed by climate change, building a coal power project does not demonstrate that it is managing those risks.

Sumitomo Corporation recently faced a strong rebuke from investors voting for a shareholder resolution which referenced Sumitomo’s construction of coal power projects. Investors found that continued involvement in coal power was an indication that its business strategy was not Paris-aligned. Mitsubishi would likely face the same concerns from its investors.