Vietnam will pilot a carbon trading platform from 2025, officially operating in 2029

The project to establish and develop a carbon market in Vietnam aims to build a legal framework, pilot a carbon trading floor in the period from 2025 to 2028 and officially operate in 2029...

Vietnam will officially operate the carbon credit market in 2029 - Illustration by AI.

On January 24, 2025, Deputy Prime Minister Tran Hong Ha signed Decision No. 232/QD-TTg approving the Project to establish and develop a carbon market in Vietnam.

The overall goal of the Project is to develop the carbon market in Vietnam, support the goal of reducing greenhouse gas emissions as committed in the Nationally Determined Contribution (NDC), at low cost, and at the same time create new financial sources for emission reduction activities.

Along with that, promote green transformation, develop low emission technology, improve business competitiveness, develop a low-carbon economy and respond to climate change, aiming for net zero emissions by 2050.

Specifically, before June 2025, complete the legal framework for trading greenhouse gas emission quotas, carbon credits and the carbon credit exchange and offsetting mechanism, creating a basis for pilot implementation of the carbon trading floor. At the same time, build carbon market operating infrastructure, improve management capacity of state agencies and awareness and market participation capacity of businesses, organizations and individuals.

HANOI STOCK EXCHANGE IS A SERVICE PROVIDER

According to the approved Project, goods on the carbon market include 2 types, specifically:

First, greenhouse gas emission quotas are allocated to establishments in the List of sectors and establishments that emit greenhouse gases that must carry out greenhouse gas inventories issued by the Prime Minister in a free and auction method.

Second, carbon credits confirmed for trading on the market include: Carbon credits obtained from programs and projects under the domestic carbon credit exchange and offset mechanism according to the provisions of law. Carbon credits obtained from programs and projects under the credit exchange and offset mechanism.

Along with that are international carbon credits such as carbon credits obtained from the Clean Development Mechanism (CDM), carbon credits obtained from the Joint Credit Mechanism (JCM), carbon credits obtained under the Mechanism under Article 6 of the Paris Agreement.

At the same time, participating entities must have transaction custody accounts, and registration and code issuance are done centrally to ensure data synchronization and meet management and supervision requirements.

The approved project clearly states that Vietnam Securities Depository and Clearing Corporation provides depository and payment services, based on technical standards developed by the Ministry of Natural Resources and Environment in coordination with relevant agencies. Transaction payments are automatically performed by the system, ensuring the principle of transferring goods at the same time as payment at the bank.

Besides, qualified commercial banks will make payments for transactions. The Ministry of Natural Resources and Environment coordinates with ministries and branches to organize the operation of the carbon market, ensuring strict management, avoiding loss of resources and assets and affecting national security and social order.

ENTITIES PARTICIPATING IN TRADING ON THE CARBON EXCHANGE FLOOR

The roadmap for implementing the carbon market includes two stages. The pilot implementation period is from 2025 to the end of 2028. During this period, the carbon market pilot will be implemented nationwide. The transfer of carbon credits and the results of reducing greenhouse gas emissions to foreign and international partners are researched and specifically regulated in legal documents and reviewed and decided by competent authorities.

All greenhouse gas emission quotas are researched and considered for free allocation to greenhouse gas emission establishments in a number of major emission sectors. Carbon credits are confirmed for trading on the carbon exchange.

This includes carbon credits obtained from: Programs and projects under the domestic carbon credit exchange and offset mechanism; Clean Development Mechanism (CDM); Joint Credit Mechanism (JCM); Mechanism under Article 6 of the Paris Agreement. The ratio of carbon credits used to offset greenhouse gas emissions over the total greenhouse gas emission quotas allocated to the facility is prescribed by the Government.

The project also stipulates that the subjects participating in transactions on the carbon trading floor are large greenhouse gas emitters in the List of fields and greenhouse gas emitters that must carry out a greenhouse gas inventory issued by the Prime Minister and are allocated greenhouse gas emission quotas; Eligible organizations and individuals can participate in buying and selling carbon credits on the carbon exchange.

The official operation phase nationwide begins in 2029. Accordingly, fields and establishments allocated greenhouse gas emission quotas are researched and considered for expansion according to the roadmap. Greenhouse gas emission quotas are researched and considered for free allocation and allocation through auction.

"Detailed rates of free allocation and auction of greenhouse gas emission quotas will be proposed during the pilot implementation phase and after having complete information and data on granted greenhouse gas emission quotas and transaction volume," the Project clearly states.

At the same time, the ratio of carbon credits used to offset emissions to the total greenhouse gas emission quota allocated to the facility is prescribed by the Government; Consider expanding subjects eligible to participate in carbon credit transactions on the carbon exchange (adjusting conditions for organizations and individuals to participate in transactions on the carbon exchange)...

Source: vneconomy.vn