Vietnam - attractive destination for carbon credit market

Optimal solutions for emission reduction and green investment opportunities

Through the emission quota trading mechanism, businesses and organizations can optimize the cost of reducing emissions, while encouraging investment in clean technology and renewable energy. In the world, the carbon market has developed strongly with two main forms: the emission trading market and the voluntary carbon credit market.

With specific steps and strong commitments from the Government, Vietnam is gradually developing the carbon market, contributing to the global efforts in the fight against climate change.

The carbon market will promote transparency in measuring and controlling greenhouse gas emissions

On January 25, 2025, the Vietnamese Government officially approved the Project on Establishing and Developing a Carbon Market, marking an important milestone in carrying out solutions to mitigate the impacts of climate change and implementing commitments to reducing greenhouse gas emissions.

The establishment and development of a carbon market in Vietnam will open up new opportunities for domestic and international enterprises to participate in reducing greenhouse gas emissions.

The carbon market will create a financial mechanism for enterprises to implement emission reduction measures, such as investing in clean technologies, renewable energy and sustainable production methods. At the same time, this market also creates motivation for enterprises to improve production processes, save energy and reduce environmental pollution.

The carbon market will promote transparency in measuring and controlling greenhouse gas emissions. Enterprises need to demonstrate their emission reductions through the purchase and sale of carbon credits, helping to create a fair competitive environment. This will encourage businesses to strive to achieve greenhouse gas emission targets, contributing to the implementation of international commitments on environmental protection and climate change response.

By participating in the carbon market, businesses can buy carbon credits from organizations or companies that implement effectively emission reduction measures. This purchase helps businesses reduce the cost of complying with environmental regulations, especially for high-emission manufacturing industries, such as energy, cement, steel, and chemicals. With the above regulation, businesses can access financial opportunities from buying carbon credits at more reasonable prices, especially in the context of increasingly stringent environmental regulations.

The foundation for Vietnam’s carbon market

A representative of the Department of Climate Change under the Ministry of Natural Resources and Environment said that the ministry and others that manage greenhouse gas emissions will focus on inventories of greenhouse gases by sectors to serve the National Greenhouse Gas inventories. Greenhouse gas emission facilities must conduct inventories according to the Prime Ministerial Decision No.13/2024/QD-TTg dated August 13, 2024 as a basis for the allocation of greenhouse gas emission quotas in the domestic carbon market.

To achieve the goal of reducing greenhouse gas emissions, in addition to energy conversion solutions, energy saving and application of advanced, low-emission technologies (such as in circular economy), many countries also apply carbon pricing tools, such as carbon tax, emission trading system (ETS), and carbon credit mechanism.

To date, about 90 countries and territories in the world have applied about 110 carbon pricing tools. In 2024, these tools controlled more than 12.8 billion tonnes of CO₂ equivalent, accounting for 24% of the total global greenhouse gas emissions.

Vietnam has also determined to apply carbon pricing tools. While the domestic carbon market is still in the development stage, since the mid-2000s, Vietnamese businesses have traded carbon credits on the global voluntary carbon market through mechanisms like the Clean Development Mechanism (CDM) since 2006, the Gold Standard (GS) and Verified Carbon Standard (VCS) since 2008, and the Joint Crediting Mechanism (JCM) with Japan since 2013. To date, Vietnam has recorded 150 projects generating 40.2 million carbon credits. Vietnam is also one of the four countries with the most registered CDM projects, after China, Brazil, and India. In terms of credits earned from CDM projects, Vietnam ranks 9th out of 80 countries that have certified CDM projects.

To establish and operate the domestic carbon market, the Law on Environmental Protection 2020 regulates the organization and the development of the carbon market in Article 139 and stipulates that greenhouse gas emission facilities that are required to conduct inventories of greenhouse gases on allocated lists are given greenhouse gas quotas and have the right to exchange and trade the quotas on the domestic carbon market.