The draft proposal outlines how the carbon market will introduce new financial resources for reducing greenhouse gas emissions, driving green transformation and promoting low-carbon technology, with a goal of reaching net zero emissions by 2050.

During the pilot phase, the market will operate exclusively within Vietnam. All carbon emission quotas will be allocated free of charge, without auctions, focusing on sectors with the highest emissions.

Trading will be limited to carbon credits generated from domestic programs, and international carbon trading mechanisms will not be implemented until later.

The main participants in the market will be large greenhouse gas emitters and organizations authorized to trade carbon credits.

Carbon credits will be exchanged on a centralized online trading platform, overseen by the Ministry of Natural Resources and Environment (MoNRE).

The pilot phase will help the government finalize the legal and technical infrastructure needed to integrate the domestic carbon market with regional and global markets, which is expected to occur after 2028.

Official launch of the carbon market

The official nationwide launch of Vietnam’s carbon market is expected in 2029, following the pilot phase. At that point, the government will begin auctioning a portion of carbon emission quotas. By then, the country will also explore legal frameworks for connecting its domestic carbon market with international markets.

Trading activities during the pilot phase will occur on a domestic carbon exchange, established and managed by the Hanoi Stock Exchange and Vietnam Securities Depository and Clearing Corporation, in cooperation with MoNRE.

At the meeting, Deputy Prime Minister Tran Hong Ha emphasized the importance of being flexible and innovative in implementing the carbon market plan.

He noted that Vietnam has significant potential in renewable energy and the carbon market, which could attract substantial investment.

Seizing opportunities in the carbon market

With renewable energy and carbon markets offering substantial potential, Deputy Prime Minister Ha stressed the importance of taking swift and strategic actions to capitalize on opportunities.

“This is a game where those who are fast and smart can catch up or even surpass more developed players,” he remarked.

To ensure the smooth implementation of the carbon market, the Deputy Prime Minister tasked the Ministry of Finance and MoNRE with refining the proposal to cover market structure, organizational capacity, and the necessary infrastructure.

Additionally, government agencies were directed to assess the supply and demand dynamics of both domestic and international carbon markets.

The Deputy Prime Minister also called for clear legal frameworks to be established for carbon credit calculation, measurement, and certification.

This will enable transparent trading of carbon quotas and credits on the domestic market and lay the groundwork for future international market integration.

Tam An