On January 24, 2025, the prime minister of Vietnam issued Decision No. 232/QD-TTg, approving the proposal for establishment and development of a carbon market in Vietnam. The decision establishes a compliance mechanism for greenhouse gas (GHG) emitters and creates opportunities for investors interested in carbon trading in Vietnam.

Market Development Roadmap

Decision 232 establishes a phased approach to developing Vietnam’s carbon market, with the following ambitious milestones:

• Before June 2025 (preparation period): The legal framework for trading of emissions quotas and carbon credits and a carbon-credit offset exchange mechanism will be developed, along with the necessary infrastructure for organization and operation of the carbon-credit market.
• From June 2025 to the end of December 2028 (pilot period): A pilot domestic carbon exchange will be launched, with continued legal refinements.
• From 2029 (official launch period): The carbon market will be fully operational.

Carbon Market Structure and Trading Mechanisms

Vietnam’s carbon market will function as a centralized, government-regulated exchange, trading two main assets:

• GHG emissions quotas (allowances) allocated to regulated emitters, which can be traded or auctioned; and
• Carbon credits generated from domestic and international projects that are certified for trading. The carbon credits generated from international projects include those originating from international exchange or offset-crediting mechanisms such as the Clean Development Mechanism (CDM), the Joint Credit Mechanism (JCM), and Article 6 of the Paris Agreement.

The National Registration System for GHG emissions quotas and carbon credits will be primarily developed and operated by the Ministry of Natural Resources and Environment.

Transactions of GHG emissions quotas and carbon credits will occur on the domestic carbon exchange, managed by the Hanoi Stock Exchange, and will follow a centralized process where verified quotas and credits receive unique domestic codes for trading and participants must have depository accounts. The Vietnam Securities Depository and Clearing Corporation will handle registration, depository, and payment services. Automated systems will process payments based on trade results, ensuring simultaneous asset transfer and payment settlement via qualified commercial banks.

Pilot Participants and Recommendations for GHG Emitters and Investors

For the pilot period, large GHG emitters, which will be allocated free emissions quotas, and organizations or individuals eligible for trading carbon credits can participate in the pilot carbon exchange. After that, the government will consider expanding participation in carbon-credit trading by adjusting eligibility conditions for organizations and individuals on the carbon exchange.

GHG emitters and investors should stay informed about Vietnam’s evolving carbon market regulations to be well prepared for participation in the carbon market. Emitters should conduct GHG inventories, submit reports biennially, implement annual emission mitigation plans, and manage allocated emission allowances within the domestic carbon market. Investors should assess regulatory developments and seek expert advice to navigate compliance obligations and identify market opportunities.