KUCHING: Vietnam’s Ministry of Finance and Ministry of Agriculture and Environment have officially launched the country’s domestic carbon exchange, marking a major milestone in the country’s efforts to establish a carbon market.
Beyond supporting Vietnam’s goal of achieving net-zero emissions by 2050,the carbon exchange provides businesses with a mechanism to proactively manage emissions by trading emission allowances and carbon credits.
Department of Climate Change’s deputy director Nguyen Tuan Quang said the carbon market’s technical infrastructure comprises three key components — national registry for greenhouse gas emission allowances and carbon credits, carbon trading platform and repository and settlement system.
Alongside infrastructure development, the government has approved a pilot greenhouse gas emission allowance cap for the 2025-2026 period and allocation more than 511 million tonnes of carbon dioxide (CO2) equivalent to 110 facilities.
This forms the initial supply for Vietnam’s domestic carbon market, according to International Tropical Timber Organisation (ITTO) Tropical Timber Market Report (July 1-15, 2026).
Currently, Vietnam has about 116 carbon projects at various stages of development, including 40 that have already been certified, with an annual carbon credit issuance of about 10.7 million credits.
However, most of these credits are still sold to international buyers, while improvements are needed in the reporting and verification (MRV) system and benefit-sharing mechanisms to strengthen investor confidence, said Tran Duc Phu of the Foreign Trade University.
From the business perspective, Doan Hong Nhung of the University of Law said complex MRV requirements, limited digital infrastructure and an incomplete carbon credit database have increased compliance costs, particularly for small and mediumsized enterprises.
She, therefore, called for standardised MRV procedures, a centralised carbon registry, measures to prevent double counting of credits and stronger incentives, such as green finance and tax preferences.
As carbon credits have yet to be clearly recognised as property rights under Vietnamese law, Phan Duy Hoa of Foreign Trade University said this makes it difficult for businesses to transfer, account for or use them as collateral to access green financing.
Therefore, he said establishing a clear legal status for carbon credits will help unlock the market’s full potential.
As climate-related trade measures, such as the EU’s Carbon Border Adjustment Mechanism, increasingly affect exports, a transparent domestic carbon market support by certified emissions data will help businesses adapt, reduce compliance costs and enhance competitiveness.
Without transparency and market confidence, however, carbon trading risks becoming a transactional exercise rather than an effective driver for real emission reductions.
Meanwhile, a new Vietnamese government decree regulating forest carbon sequestration and storage services as well as a draft National Standard for Forest Carbon Credits had been introduced recently, The decree will establish a unified legal framework for forest carbon credits, laying the groundwork for national standards and a transparent carbon market that support Vietnam’s emissions reduction commitments, according to Pham Hong Luong, deputy director of Vietnam Department of Forestry and Forest Protection.
He described the decree as a milestone for carrying out the Forestry Law and developing a domestic forest carbon market.
The decree, which took effect on July 15, 2026, comprises four chapters, 20 articles and six appendices detailing project documentation, methods for allocating emissions reduction targets, contract templates and financial management requirements, Pham said the decree creates a comprehensive legal basis for forest carbon services and provide a clear framework for generating, managing and trading carbon credits in the country.
He noted that Vietnam has gradually developed its forest environmental services policy over nearly two decades.
Pilot payments for forest environmental services began in 2008, followed by a government decree in 2010 establishing three payment mechanisms.
The 2017 Forestry Law subsequently recognised forest carbon sequestration and storage as one of the five legal defined forest environmental services.
The Forestry Ministry will oversee the development of national standards, certify emissions reduction results and manage forestry sector mitigation targets.
The provincial People’s Committees will be responsible for implementing projects, managing local databases and submitting periodic reports.
The new legal framework is expected to gradually establish a transparent and efficient forest carbon market, mobilising additional financial resources for forest protection and sustainable development, improving local livelihoods and supporting the country’s goal of achieving net zero emissions by 2050.
