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The Vietnamese carbon market is expected to be fully operational by 2029. (Photo: iStock)
Vietnam’s carbon market is gradually taking shape as Prime Minister Pham Minh Chinh officially approves the national blueprint, establishing both mandatory and voluntary markets, with full implementation expected by 2029. The aim is to fulfill the country's Nationally Determined Contributions (NDC) and achieve net-zero emissions by 2050.
Vietnam's carbon market to progress in two phases
Under the plan, the government has set two-phase objectives to gradually launch carbon market trading. The first phase, set to be completed by June of this year, involves finalizing the legal framework for emissions quotas, carbon credit trading, and offset mechanisms, while prioritizing infrastructure development and capacity building to prepare government agencies and businesses for carbon market participation.
The second phase, set to be completed by December 2028, will set the emission quotas for high-carbon industries through regulations, complete the necessary infrastructure, and launch domestic carbon trading platform pilot projects. The goal is to smoothly transition into the official carbon market in 2029. Prior to this, around 150 companies from sectors such as steel, cement, and coal power generation are expected to be among the first to participate in the carbon market.
The Vietnamese carbon market will introduce two key products: Greenhouse Gas Emission Quotas and Certified Carbon Credits.
The emission quotas, operating similarly to a cap-and-trade system, will be issued by the government through allocations or auctions. Companies exceeding their emission limits can purchase quotas through the carbon market, while companies emitting less than their allocated quotas can sell the surplus. This approach is aligned with a mandatory carbon market.
Certified Carbon Credits will operate similarly to a voluntary carbon market. Companies can obtain carbon credits through international carbon reduction programs such as the Clean Development Mechanism (CDM), the Joint Crediting Mechanism (JCM), or the Paris Agreement Article 6 mechanism. For example, companies may obtain carbon credits by replacing coal-fired power with renewable energy or using carbon-negative technologies, all verified through a strict certification process.
Vietnamese Prime Minister Pham Minh Chinh approves the national blueprint, paving the way for the establishment of both mandatory and voluntary carbon markets, set to be fully implemented by 2029. (Photo: Vietnam Government News Portal)
Businesses urge transparency in carbon market regulations
The carbon market is expected to go live in 2029, but many businesses are already concerned about the preparation process. Vu Manh Thang, a representative from the Vietnamese renewable energy company Truong Thanh Vietnam, highlighted the complexity of the carbon inventory and emission quota registration process, emphasizing the need for simplified procedures and clear, transparent regulations to lower the entry barriers for companies.
Although the Vietnamese government originally planned for the carbon market to launch in 2028, the latest plan has been delayed by one year. However, there is high anticipation from the business community, which hopes the market will not only create a sustainable financial environment for green transformation but also help reduce carbon costs and boost the competitiveness of Vietnamese businesses both domestically and internationally.
Source: Vietnam+, Vietnam Briefing, ICAP, VnEconomy
