Hanoi (VNA) – As a key foundation for Vietnam to achieve net-zero emissions by 2050 lies in its substantial carbon absorption capacity from forests, seas and natural ecosystems, the Government has recently issued a decree aiming to deal with the measuring, converting and gradually establishing of a carbon credit trading market, which is seen as an essential solution to offset greenhouse gas emissions.
Establishing exchange model
Under Decree No. 29/2026/ND-CP dated January 19, 2026 on the domestic carbon exchange, which took effect upon issuance, the exchange will operate under a centralised model subject to strict state supervision.
According to the decree, the Hanoi Stock Exchange will organise and operate the trading system, the Vietnam Securities Depository and Clearing Corporation will provide custody and settlement services, and the Vietnam Stock Exchange will oversee overall market supervision. Tradable assets include greenhouse gas emission quotas and eligible carbon credits permitted under Decree No. 06/2022/ND-CP (amended). Trading, ownership transfer, custody and settlement processes are standardised to ensure transparency and effective risk control.
Exchange activities cover trading support services, operation of trading and settlement systems, quota deposits and transaction settlement, all conducted under principles of openness, transparency and fairness. Each participant may hold only one trading account, while carbon custody members must meet securities-law requirements, ensure adequate IT infrastructure and not be subject to operational warning or suspension.
The establishment of the exchange marks Vietnam’s first official domestic carbon trading mechanism, although the country has previously participated in emission trading projects with partners in Japan and Europe. According to the Ministry of Agriculture and Environment, Vietnam currently has more than 260 projects transferring tens of millions of carbon credits, generating trillions of VND annually.
The decree is expected to create opportunities for organisations and individuals managing carbon-generating resources, major emitters, and enterprises able to trade unused emission quotas.
Gradually addressing bottlenecks
Despite strong potential, the carbon market faces several challenges. Allocation of emission quotas must ensure objectivity and transparency to prevent misuse, while pricing mechanisms and payment frameworks for carbon source owners require clearer regulations.
Vietnam has yet to establish an independent organisation meeting international standards for carbon valuation, and to have legal retulations and detailed guidance for this “intangible” commodity. An incomplete legal framework may pose difficulties for credit institutions conducting related transactions such as trading, deposits and collateralisation.
According to economic expert Dr Pham Duc Anh from the Banking Academy, recognising carbon credits as collateral assets could create new opportunities for both businesses and financial institutions, provided credits are supported by a robust legal framework aligned with international standards.
State management agencies also need effective monitoring mechanisms to ensure credit quality and mitigate risks. International experience shows that carbon credit fraud has caused billions of EUR in losses, underscoring the importance of strict oversight. Many countries, including China, Australia and several European nations, already treat carbon credits as financial assets whose value depends on reliable verification systems and clear legal protections ensuring traceability and transaction legitimacy.
In Vietnam, Decree No. 29/2026/ND-CP introduces initial provisions through a national carbon credit registry system. However, its practical operation and acceptance as collateral, particularly in international transactions, will require further evaluation.
Another challenge is the limited domestic supply of tradable carbon credits. From 14.9 million hectares of forests, Vietnam’s potential is estimated at around 70 million tonnes of carbon credits, but economic utilisation remains modest.
Nguyen Ba Ngai, Vice Chairman and Secretary General of the Vietnam Forest Owners Association, noted that unclear ownership regulations continue to hinder forest-based carbon credit transactions. Meanwhile, marine ecosystems, spanning roughly 1 million square kilometres, also hold significant credit-generation potential, according to the Vietnam Administration of Seas and Islands.
Decree No. 29/2026/ND-CP is, therefore, expected to serve as an important starting point for developing Vietnam’s carbon market in the years ahead./.
