In the context of climate change emerging as one of the greatest challenges
\nto the sustainable development of humanity, many countries and territories have
\nimplemented emission reduction policies, with a carbon market considered an important
\nand effective tool.<\/p>\n
In Vietnam, Prime Minister Pham Minh Chinh approved the Carbon Market Development
\nProject on January 24, 2025. From now to 2028, Vietnam will conduct trial market
\noperations, and by 2029 will officially launch and connect with the global carbon
\nmarket. Participation in the carbon credit market will allow local enterprises
\nto curb their environmental impact and bolster their reputation and global competitiveness.\n<\/p>\n
Opportunities for businesses<\/p>\n
The carbon market is a unique financial market where carbon credits can be
\nbought and sold, in two main forms: mandatory and voluntary. According to Dr. Bui
\nDuy Tung, Lecturer at RMIT University Vietnam, the carbon credit trading floor provides
\nbusinesses with a transparent and efficient platform, enabling them to easily buy
\nand sell carbon credits to comply with greenhouse gas emission regulations. Active
\nparticipation in this market also demonstrates a company\u2019s commitment to environmental
\nprotection, thereby enhancing its reputation and brand image in the eyes of customers
\nand partners.<\/p>\n
At the same time, compliance with international emission standards will create
\nfavorable conditions for businesses when exporting goods, especially in the context
\nof many countries applying carbon tax measures on imported products.<\/p>\n
A typical example is the Carbon Border Adjustment Mechanism (CBAM) – a policy
\nof the European Commission to impose carbon taxes on imported goods from other countries.
\nThe EU officially began piloting CBAM during a transitional period starting from
\nOctober 1, 2023, with full implementation scheduled for 2026. Analysts note that
\nif a business exports 1 ton of steel, it will need to purchase carbon certificates
\nequivalent to the emissions generated in producing that volume. Without emission
\nreduction measures, CBAM costs could amount to 20-35 per cent of the value of goods.
\nThis creates a strong incentive for Vietnamese businesses to invest in environmental
\ninitiatives, which can also bring significant financial benefits.<\/p>\n
In addition, carbon credits are essentially licenses or quotas that allow the
\nholder to emit a certain amount of carbon or other greenhouse gases, usually equivalent
\nto one ton, into the atmosphere.<\/p>\n
According to Dr. Nguyen Thanh Cong, Deputy Head of the Carbon Market Department
\nwithin the Department of Climate Change at the Ministry of Agriculture and Environment,
\nthe carbon market will open up a range of new business opportunities, such as investing
\nin projects and selling credits to polluting facilities that exceed their allocated
\nquotas. For instance, under Decree No. 119 on emission quota allocations, thermal
\npower, cement, and steel enterprises are allowed to purchase up to 30 per cent of
\ntheir allocated quota in carbon credits for offsetting. \u201cThis is a relatively high
\nand flexible limit for enterprises participating in the market to comply with greenhouse
\ngas emission quotas,\u201d he said.<\/p>\n
Through the trading floor, enterprises can choose between investing in clean
\ntechnology to reduce emissions or purchasing carbon credits from other entities.
\nThis encourages businesses to optimize costs while driving technological innovation
\nin an environmentally-friendly direction.<\/p>\n
Clearing bottlenecks <\/p>\n
The International Finance Corporation (IFC) recently conducted a survey on
\nthe readiness of Vietnamese enterprises to participate in the voluntary carbon market.
\nThe survey covered 240 enterprises across four sectors: rice production, food and
\nbeverage manufacturing, livestock farming, and waste management.<\/p>\n
Most survey responses came from large enterprises earning high revenue, with
\nprivate and foreign companies accounting for a significant share. The results showed
\nthat readiness was generally low due to limitations in resources and finance. There
\nwere also notable knowledge gaps, such as a lack of awareness about carbon credit
\nstandards and mechanisms, as well as difficulties in understanding standard conditions,
\ndata requirements, and project registration procedures.<\/p>\n
Ms. Vo Hoang Nga, Director of ESG (environmental, social, and governance) at
\nTTC AgriS (the Thanh Thanh Cong – Bien Hoa Joint Stock Company), told the recent
\nVietnam Carbon Market Forum 2025 that businesses face significant challenges in
\ngetting projects approved and implemented, with the registration process for carbon
\ncredit issuance typically taking two to three years and in some cases up to four
\nyears.<\/p>\n
Meanwhile, a sugarcane production enterprise in north-central Thanh Hoa province
\nhas engaged in carbon credit transactions directly between enterprises. However,
\nthe process encountered obstacles due to a lack of clear regulations and legal guidelines
\nfor the model. When the company applied for a license to implement its project,
\nauthorities were unsure how to proceed due to the absence of a specific legal framework
\nin the field.<\/p>\n
Dr. Nguyen Phuong Nam, Climate Change expert and CEO of Klinova, said one key
\nbottleneck in Vietnam\u2019s legal regulations on new commodities such as carbon credits
\nis the lack of clarity on who invests the funds to create carbon credits during
\nthe design, construction, and operation of a \u201cgreen project\u201d or greenhouse gas reduction
\nproject. Furthermore, the law has not clearly defined which individual or legal
\nentity holds ownership rights and is entitled to profits from the sale of carbon
\ncredits once they are issued by international organizations such as Verra or Gold
\nStandard.<\/p>\n
Vietnam currently has no organization with both the professional capacity and
\nlegal authority to issue carbon credits generated by domestic mitigation projects.
\nWithout clear legal definitions of ownership, or prior agreements between stakeholders,
\nconflicts could arise between the initial project investor, the operating unit,
\nand individuals or organizations using the project\u2019s infrastructure, vehicles, and
\nmachinery. In the event of a dispute, these assets would be difficult to protect
\nunder the law. Such uncertainty about carbon rights poses a significant risk for
\ninvestment decisions.<\/p>\n
Dr. Nam noted that Vietnam is still in the process of finalizing its legal
\nframework for the carbon market. While it is important to launch the domestic carbon
\nmarket quickly, it is even more crucial to have clear regulations on how carbon
\ncredits are created in the country.<\/p>\n
Vietnam has introduced regulations such as Decree No. 119\/2025\/ND-CP, which
\namends and supplements certain provisions of Decree No. 06\/2022\/ND-CP on greenhouse
\ngas emission reductions and ozone layer protection. Under the planned roadmap, the
\npilot phase for the greenhouse gas emission quota and carbon credit trading market
\nwill run from June 2025 to the end of 2028.<\/p>\n
However, legal regulations remain vague on the process of creating such commodities.
\nCarbon credit projects also face practical barriers, as there is currently no organization
\nto guide the process or methodology for obtaining credits issued by either domestic
\nor international bodies, let alone to oversee trading activities.<\/p>\n
Therefore, Dr. Nam recommended introducing policies to encourage the development
\nof carbon credit projects certified by international organizations while Vietnam
\nworks to establish competent domestic issuers. Domestic carbon credit standards
\nshould align with internationally-recognized benchmarks to avoid risks in future
\ncross-border transactions of this new type of commodity. \u201cThis is also to protect
\nthe legitimate interests of pioneering enterprises investing in emission reduction
\nprojects and creating new commodities such as carbon credits,\u201d he emphasized. <\/p>\n
At a more transformative level, particularly to support private enterprises
\nseeking a green transition, Dr. Nam suggested that, in the spirit of fostering innovation,
\nthe State could introduce preferential tax, credit, and financial policies to encourage
\ninvestment in clean technology. Additionally, competent authorities should soon
\nissue guidelines to promote the registration and creation of voluntary carbon credits
\n(VCM) for pioneering enterprises in Vietnam.<\/p>\n
\n
\n\u201cWhen the interests and roles of the State and the private sector are clearly defined in the area of climate finance, it will create incentives for both parties to fully realize the potential of green projects that generate carbon credits.\u201d
\n
\nDr. Nguyen Phuong Nam, Climate Change Expert and CEO ofKlinova
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