You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

February 11, 2025

Vietnam to Establish and Develop Carbon Market

Subscribe to Updates

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.

Related Professionals

Industries

Energy

Practices

Capital Markets

Corporate/M&A

Location

RELATED INSIGHTS​ 

October 15, 2020
Practical Law has published the 2020 online version of Electricity Regulation in Thailand: Overview, a Q&A-style guide that provides detailed overviews of power issues and regulations for operators in the Thai electricity market. The Thailand overview is one of 22 such guides to jurisdictions worldwide, covering key practical issues related to the legal environment for agricultural operations.
Read More
October 13, 2020
On September 9, 2020, Vietnam’s Ministry of Industry and Trade (MOIT) issued Circular No. 21/2020/TT-BCT on the order and procedures for issuance of electricity operating licenses (Circular 21). Circular 21 will take effect on October 26, 2020, replacing Circular No. 36/2018/TT-BCT as amended by Circular No. 15/2019/TT-BCT (together, Circular 36).
Read More
October 1, 2020
Partner Vinh Quoc Nguyen and senior associate Tu Ngoc Trinh have contributed a chapter on electricity regulations in Vietnam, with a focus on the emerging renewable energy field, for the 2020 edition of the Practical Law Energy and Natural Resources Global Guide . The guide provides a comparative high-level overview, in a concise Q&A format, of energy laws and regulations in multiple jurisdictions around the world, and is split into three sections featuring regulations on (i) electricity, (ii) oil and gas, and (iii) mining. The Vietnam electricity chapter covers a range of topics, including the following: Recent trends in Vietnam’s electricity market and regulatory structure Companies involved in electricity generation, transmission, distribution and supply Import and export of electricity Electricity generation and renewable energy sources, including government policies and incentives Electricity transmission, distribution, and supply Proposals for reform, including privatization Practical Law Company is owned by Thomson Reuters and provides global guides covering legal know-how for corporate lawyers, including Global Guides to electricity regulation. Tilleke & Gibbins also contributes the Thailand chapter of this guide, as well as guides to numerous other practice areas. The full chapter can be viewed on the Practical Law website or downloaded using the button below.
Read More
October 1, 2020
On August 26, 2020, the Vietnamese Government issued Decree No. 99/2020/ND-CP stipulating penalties for administrative offenses in the petroleum sector, and in the petrol, oil, and gas trading sector. Decree 99 will take effect on October 11, 2020, replacing Decree No. 67/2017/ND-CP dated May 25, 2017.Decree 99 stipulates that the maximum fine in the sector of exploration and production of petroleum is VND 1 billion (approx. USD 43,000) for an individual and VND 2 billion (approx. USD 86,000) for an organization.
Read More