Vietnam’s Carbon Market Development Plan Approved
Tran Hong Ha, the Deputy Prime Minister of Vietnam, has greenlit a plan to create and grow a carbon market in the country. The initial phase of carbon credit trading is expected to launch in the latter half of 2025.
By June 2025, Vietnam aims to finalize the legal framework for trading greenhouse gas emission allowances and carbon credits. This framework will outline trading mechanisms, forming a robust foundation for the forthcoming carbon trading system.
To support this market, necessary infrastructure will be developed, alongside training initiatives for government bodies, businesses, and individuals to participate effectively in the carbon market.
The pilot program for domestic carbon trading will run from June 2025 until the end of 2028, during which the legal framework will continue to evolve.
This phase will focus on nationwide implementation, with regulations regarding the transfer of carbon credits and emission reductions to international partners being established by authorized entities.
By 2029, Vietnam intends to fully launch its domestic carbon trading platform. The insights gained from the pilot phase will guide the scaling of emission quotas and carbon credits to diverse sectors and facilities.
Emission quotas will be distributed primarily through two methods: free allocation and auctions, details of which will be finalized during the pilot based on data regarding quota distribution and trading activities.
Additionally, other carbon credit types may be included in trading, particularly from validated domestic or international offset initiatives under frameworks like the Clean Development Mechanism and the Joint Credit Mechanism, as well as Article 6 of the Paris Agreement.
A national system to register greenhouse gas emission allowances and carbon credits will be established to effectively manage and oversee activities like borrowing, transferring, and offsetting quotas.
The Ministry of Natural Resources and Environment (MONRE) will spearhead the development and management of this system in conjunction with relevant agencies.
The Hanoi Stock Exchange will offer services for the trading platform, adhering to necessary operational and technical standards.
The trading of carbon credits will occur in a centralized manner, with MONRE validating emission quotas and carbon credits and assigning them unique identification codes. Participants must maintain depository accounts for trading, ensuring data alignment and regulatory compliance.
The Vietnam Securities Depository and Clearing Corporation will oversee transaction depositories and settlements, with automated payments managed based on trade outcomes from the Hanoi Stock Exchange, allowing for simultaneous transfer of goods and payment.
The overarching objective of this plan is to establish Vietnam’s carbon market, supporting its commitment to lowering greenhouse gas emissions as outlined in its Nationally Determined Contributions (NDCs).
This initiative is expected to generate a new financial avenue for emission reduction efforts, encourage green transformations, and support low-emission technologies. Ultimately, it aims to boost the competitiveness of Vietnamese enterprises both locally and internationally, contributing to the nation’s shift towards a low-carbon economy and its goal of achieving net-zero emissions by 2050.