Việt Nam will develop carbon market to meet greenhouse gas (GHG) emission reduction targets. (Photo: Insurance Business Mag)

HÀ NỘI – The Prime Minister has issued Decision No 232/QD-TTg to approve a project on the establishment and development of Việt Nam’s carbon market.

The project’s primary goal is to establish a carbon market in the country to help meet greenhouse gas (GHG) emission reduction targets set in the Nationally Determined Contributions (NDC), while minimising costs for businesses and society.

The initiative aims to create new financial flows for GHG reduction efforts, support the transition to green technologies, and enhance the competitiveness of Vietnamese businesses in both domestic and international markets.

The project is also designed to accelerate the development of a low-carbon economy and address climate change, working toward the goal of achieving net-zero emissions by 2050.

By June 2025, the project targets to complete the legal framework for the exchange of GHG emission quotas and carbon credits, including development of mechanisms for carbon credit trading and offsetting, and establish necessary infrastructure for carbon market operations.

Additionally, the project aims to boost the management capacity of relevant Government agencies and raise awareness among businesses, organisations and individuals about the carbon market.

The project introduces two primary market commodities: Greenhouse Gas Emission Quotas and Certified Carbon Credits, which will be tradable.

It also outlines a detailed roadmap for the carbon market, with a pilot phase running from 2025-2028 and the market officially launching nationwide in 2029.

In the pilot phase, the transfer of carbon credits and greenhouse gas emission reduction results to foreign and international partners will be studied, specifically regulated in legal documents, and considered and decided upon by competent authorities.

The entire greenhouse gas emission quota will be studied and considered for free allocation to greenhouse gas emission facilities in a number of significant emission sectors. Carbon credits will be confirmed for trading on the carbon exchange, including carbon credits obtained from programmes and projects under the domestic carbon credit exchange and offset mechanism, Clean Development Mechanism (CDM), Joint Credit Mechanism (JCM), and Mechanism under Article 6 of the Paris Agreement.

The Government will determine the ratio of carbon credits used to offset greenhouse gas emissions over the total greenhouse gas emission quotas allocated to establishments.

Participating in transactions on the carbon trading floor will be large greenhouse gas emission establishments on the List of sectors and greenhouse gas emission establishments that must conduct greenhouse gas inventories issued by the Prime Minister and be allocated greenhouse gas emission quotas. Other participants include organisations and individuals that are eligible to participate in buying and selling carbon credits on the carbon trading floor.

From 2029, the carbon market will be officially operated nationwide.

Under this project, key tasks include developing the carbon market’s commodities, registering participants, creating a national registry and carbon trading platform, organising market operations, and enhancing awareness and capacity building. VNS