.jpg)
Steel industry likely to rely on carbon offsets as it enters first regulated phase. (Photo: iStock)
Vietnam is set to launch a pilot carbon credit trading scheme this year, with regulations still under development regarding the percentage of emissions that businesses can offset using carbon credits.
According to draft documents, this offset cap has been repeatedly revised upward. An official from the Ministry of Agriculture and Environment (MAE) revealed that the government aims to raise the cap to 30% in hopes of easing pressure on companies during the early stages of carbon reduction efforts.
Government plans flexible carbon offset rules
To fully implement its Emissions Trading System (ETS) by 2029, Vietnam’s Ministry of Finance is currently drafting the legal framework for the carbon market.
This includes setting emission quotas for companies and establishing rules for credit trading, ensuring alignment with international standards—particularly Article 6 of the Paris Agreement, which governs cross-border mitigation outcome. The new legislation must ensure that reductions counted toward Vietnam's Nationally Determined Contributions (NDCs) are not double-counted.
Tang The Cuong, Director of Climate Change at MAE, emphasized in an interview with the Hanoi Times that private-sector involvement is essential to the success of the carbon market. To incentivize participation, the government plans to increase the offset ceiling to 30%, giving businesses more flexibility and reducing compliance pressure.
Mai Duong, a market analyst at carbon intelligence firm Veyt, noted that Vietnam had already raised the proposed offset cap from 10% to 20% in last year’s draft to make compliance more attainable. She believes that, given the country’s emissions registry is still under development, a more flexible approach in the early phase could see increase of offset use among businesses.
According to Duong, final rules on the offset cap are expected by the end of April. However, she cautioned that a separate draft regulation restricts trading to over-the-counter (OTC) transactions conducted solely via the Hanoi Stock Exchange, which may hinder market growth.
Tang The Cuong, Director of Climate Change at MAE, said the government plans to raise the carbon offset limit to 30% to encourage corporate participation in carbon trading. (Photo: MONRE/Kieu Chi)
Vietnam to launch corporate carbon market guidebook
Currently, around 150 companies are set to be regulated under the pilot phase—primarily in high-emission sectors such as steel, cement, and coal-fired power. Together, they account for approximately 40% of Vietnam’s total emissions.
However, the national carbon registry—essential for tracking emissions and offsets—is still under development. Tang stated that the system will be compatible with international standards such as Verra and Gold Standard to ensure data reliability and transparency.
He also mentioned that the government plans to release a carbon market handbook to help companies navigate the emerging system. The guide will cover voluntary carbon markets, certified carbon credits, and compliance procedures.
Vietnam’s ETS rollout will occur in two phases: a learning phase from mid-2025 to the end of 2028, during which pilot projects will be launched and policies fine-tuned, followed by full implementation in 2029. The ultimate goal is to broaden corporate participation and drive emission reductions toward the nation’s 2050 net-zero target.
Source: Hanoi Times
.jpg)
