Hanoi (VNS/VNA) – Vietnam has put in place a comprehensive legal and institutional framework for its domestic carbon market that integrates carbon credit and greenhouse gas emissions quota trading with the country's securities infrastructure, a move aimed at boosting transparency, efficiency and market breadth ahead of pilot operations.
On January 19, the Government issued Decree 29/2026/ND-CP, establishing a regulatory architecture for the domestic carbon trading exchange.
The decree outlines how greenhouse gas emission quotas and carbon credits will be registered, transferred, custodied and traded, marking a key step from planning to implementation under the country's broader climate strategy.
Under the new framework, companies and other regulated entities will trade both emission quotas and carbon credits through securities accounts at licensed brokerage firms.
To participate, a business must open a dedicated carbon trading account at a securities member, separate from other financial trading accounts. This account will be used exclusively for transactions in greenhouse gas quotas and carbon credits, reflecting a design that mirrors the accounting and settlement systems used on Vietnam's stock exchanges.
Once a trade is executed, results will be published at the end of the trading day by the Hanoi Stock Exchange (HNX), with clearing and custodial functions supported by the Vietnam Securities Depository and Clearing Corporation (VSDC).
According to Decree 29, the carbon trading system is distinctly structured to avoid cross-offsetting with other trading activities and requires each transaction to settle in real time, without central counterparty clearing, based on sufficient holdings of quotas or credits and corresponding funds in the participating account.
By tying carbon transactions to securities accounts, the Government intends to anchor trading activity within existing, regulated financial infrastructure, helping to mitigate operational risk and leverage technological capabilities already present in the securities sector.
Securities members are required to display carbon trading components separately from other instruments when users log into their trading interfaces and to maintain distinct records for carbon credits and funds.
Registration and national registry links
Before any greenhouse gas quota or carbon credit is introduced into the market, it must be registered with and assigned a unique identification code by the national registry system managed by the Ministry of Agriculture and Environment.
This unique code serves as the definitive identifier for custody and trading activities and is shared with the VSDC and HNX once registration is completed.
The decree also specifies that participating entities must hold sufficient quotas or carbon credits when placing a sell order and adequate funds when submitting a buy order.
Members are responsible for monitoring their balances daily and ensuring that orders are complete and accurate under market rules.
Vietnam's carbon trading exchange is set to operate under a pilot regime through December 31, 2028, during which time no fees will be charged by the exchange operators for carbon market services.
After the pilot period, starting January 1, 2029, carbon trading service fees will be introduced in accordance with applicable law.
The design of the pilot is intended to allow market participants to become familiar with trading protocols, account requirements and settlement processes that are distinct from typical stock or derivative markets.
This phased approach aligns with the Government's roadmap toward a functional nationwide carbon market that supports both domestic compliance and potential future links with international mechanisms.
Decree 29's implementation reflects Vietnam's strategic positioning of market-based instruments as part of its climate mitigation policy.
By anchoring carbon trading within securities infrastructure, the Government expects to create transparent price signals that encourage cost-effective emissions reductions and stimulate investment in low-carbon technologies.
As of August 2025, more than 30 million carbon credits from 158 voluntary market projects have been issued under Vietnam's national registry, with projections suggesting this could rise to approximately 70 million by 2030.
Domestic demand is also growing, with sectors like aviation requiring hundreds of thousands of credits annually to offset emissions.
While trader account mechanics and securities-based systems may be new to some participants, integrating carbon credit trading with established financial market infrastructure signals Vietnam's commitment to building a credible and scalable carbon market, one that balances environmental integrity with operational efficiency and regulated oversight./.
VNA
