A cement factory in Thái Nguyên. — VNA/VNS Photo

HÀ NỘI — Việt Nam is preparing to launch a pilot carbon exchange allowing major emitters in the steel, cement and thermal power sectors to trade greenhouse gas emissions quotas, as the country moves toward its goal of achieving net zero emissions by 2050.

Under the Government's roadmap for developing a domestic carbon market, a pilot carbon trading platform will operate from now through 2028, before a nationwide market is launched in 2029.

The market will enable companies to buy and sell greenhouse gas emissions allowances and carbon credits. Each carbon credit represents the reduction or removal of one tonne of carbon dioxide or its equivalent in other greenhouse gases.

The Ministry of Finance, the State Securities Commission (SSC) and other agencies are developing a centralised trading mechanism covering two main products: emissions quotas allocated to large emitters in the steel, cement and thermal power industries, and carbon credits generated from emissions reduction projects.

Under the system, companies that emit less than their allocated quotas will be able to sell surplus allowances to firms that exceed their emissions limits, creating a market-based mechanism to help curb greenhouse gas emissions.

Việt Nam views the carbon market as a key tool for meeting its climate commitments while encouraging businesses to invest in cleaner technologies, improve energy efficiency and modernise production processes.

Việt Nam has favourable conditions for developing a carbon market, experts say, citing its more than 14 million hectares of forest and a growing number of emissions reduction projects in the energy and industrial sectors that could generate carbon credits.

The carbon market could also help improve the competitiveness of Vietnamese exporters as countries introduce stricter environmental standards and carbon border adjustment measures on imported goods.

As part of preparations for the launch, the SSC has selected State-owned lender Bank for Investment and Development of Vietnam as the sole settlement bank for transactions involving greenhouse gas emissions quotas and carbon credits on the Vietnam Carbon Exchange. — VNS