In the global effort to combat climate change, carbon markets are emerging as a vital policy tool to help nations achieve net-zero emissions targets. Vietnam is aligning with this global trend by developing a carbon market ecosystem with a clear roadmap—from policy formulation and infrastructure development to pilot implementation and full-scale operation by 2028. This marks a pivotal shift in the country’s climate policy and opens both opportunities and challenges for the business sector. VPNA
1. What Is a Carbon Market?
A carbon market allows greenhouse gas (GHG) emitting entities to trade “emission rights” under two key mechanisms:
- Carbon credits: Verified emission reductions or removals, generated through renewable energy, afforestation, or waste management projects. One carbon credit equals 1 ton of CO₂ equivalent.
- Emission allowances: Emission permits issued or sold by regulatory authorities to entities under an Emissions Trading System (ETS).
The flexible interplay between credits and allowances forms the foundation of an effective and transparent carbon market.
2. National Commitments Toward Net-Zero
At COP26 in 2021, Vietnam’s Prime Minister announced the country’s commitment to achieving net-zero emissions by 2050. This was a landmark declaration of Vietnam’s determination to actively contribute to global climate action.
To realize this goal, the Vietnamese government issued a series of key legal documents:
- Decree No. 06/2022/NĐ-CP (Jan 7, 2022): Regulations on GHG emission reduction and ozone layer protection. It mandates large emitters to conduct periodic GHG inventories and submit emission reduction plans.
- Decision No. 13/2024/QĐ-TTg (Jan 7, 2024): Updates the list of facilities required to report and reduce emissions every two years.
- Decision No. 232/QĐ-TTg (Jan 24, 2025): Approves the proposal for developing Vietnam’s domestic carbon market, outlining a phased implementation plan.
These policies establish the legal foundation for the creation of a transparent, fair, and context-appropriate carbon market in Vietnam.
3. Roadmap for Vietnam’s Carbon Market Development
According to Decision 232/QĐ-TTg, Vietnam’s carbon market will be developed in three stages:
Stage 1 – Before June 2025: Preparation
- Develop a comprehensive legal framework for carbon trading.
- Build technical infrastructure, including national carbon registries, a carbon trading platform, and GHG databases.
- Conduct training programs and awareness campaigns for enterprises and relevant stakeholders.
Stage 2 – 2025 to 2028: Pilot Phase
- Launch a pilot ETS with limited scope, involving around 200 major emitters in industries such as power generation, cement, and steel.
- Allocate 100% free emission allowances initially, while allowing carbon credits to offset excessive emissions.
- Test the operation of a pilot carbon exchange and evaluate market mechanisms.
Stage 3 – Post-2028: Full Implementation
- Scale up to a national market covering more industries and enterprises.
- Introduce a hybrid system combining free allocation and auctioning of emission allowances.
- Enable trading of both domestic and international carbon credits.
- Integrate with regional and global carbon markets (e.g., ASEAN, China, Korea) to improve liquidity and efficiency.
4. Cross-Ministerial Policy Support
In parallel with the carbon market roadmap, key ministries have issued sector-specific GHG measurement and reporting guidelines:
- Ministry of Natural Resources and Environment (MONRE): Circular No. 17/2022/TT-BTNMT – Waste management sector.
- Ministry of Agriculture and Rural Development (MARD): Circular No. 23/2023/TT-BNNPTNT – Forestry sector.
- Ministry of Industry and Trade (MOIT): Circular No. 38/2023/TT-BCT – Industrial sector guidelines for GHG inventory and mitigation.
These guidelines standardize data collection and reporting procedures across sectors, ensuring consistency and transparency in national GHG accounting.
5. Opportunities and Impacts on Enterprises
Opportunities:
- Proactively manage emissions and prepare for regulatory requirements ahead of time.
- Monetize carbon assets through the sale of surplus credits.
- Enhance global competitiveness, especially for exporters subject to international carbon regulations (e.g., EU CBAM).
Obligations and Impacts:
- Enterprises must establish GHG inventory systems and comply with sector-specific reporting requirements.
- Investment in energy efficiency and emission reduction technologies will be critical.
- Transparent reporting will become essential for stakeholder trust and regulatory compliance.
Vietnam’s carbon market is at a critical inflection point in its journey toward a green and sustainable economy. With a steadily improving legal framework and strong governmental support, the market is expected to become one of the country’s key environmental-economic mechanisms in the coming decade.
Enterprises, government agencies, and related organizations must take proactive steps to align with this global transition—where economic value is increasingly tied to environmental responsibility.
