Chairing a meeting to finalize the draft proposal for the establishment and development of a carbon market in Vietnam on the afternoon of October 7, 2024, Deputy Prime Minister Tran Hong Ha emphasized the significant potential of the carbon market in attracting investment and promoting technological advancements.
However, he noted that nations have yet to agree on a unified mechanism, policies, technical standards, and a fair, clear, and transparent global framework for carbon quota allocation. Therefore, the proposal outlines a pilot implementation roadmap for Vietnam’s carbon market, adopting a “learn-by-doing” approach to stay ahead and catch up with global trends.
The Deputy Prime Minister instructed the Ministry of Finance to closely collaborate with the Ministry of Natural Resources and Environment and other relevant ministries and sectors to meticulously review legal documents pertaining to the establishment, operation, management, monitoring, and supervision of the domestic carbon market.
He emphasized that the proposal should be concise and clear in its objectives and perspectives. Specifically, it should focus on seamlessly forming and operating a domestic carbon exchange in terms of legal framework, human resources, and policies; excluding international transactions except for carbon credit exchanges as per international agreements.
The proposal’s tasks and solutions should be assigned to specific ministries, sectors, and agencies, with defined timelines and tangible outputs, including legal documents, organizational structure, infrastructure, and human resources.
The implementation process should ensure integration and harmony in terms of procedures, professional capacity, and alignment with international practices, including legal systems, consulting, assessment, and carbon quota and credit evaluation, consulting with foreign entities. It should also address the necessary conditions for the domestic carbon market to connect with regional and global markets in the future.
According to the draft proposal, developing a carbon market in Vietnam contributes to achieving the country’s greenhouse gas emission reduction goals as outlined in its Nationally Determined Contributions (NDCs) while minimizing costs for businesses and society. It also creates new financial opportunities for emission reduction activities, promotes green transformation, and fosters low-emission technology development. These efforts enhance the competitiveness of Vietnamese enterprises domestically and globally, foster a low-carbon economy, and proactively address climate change, aiming for net-zero emissions by 2050.
During the pilot phase from 2025 to 2028, the carbon market will be implemented nationwide, with a focus on domestic carbon credit transactions and excluding connections with regional and global carbon markets.
From 2029 onwards, the carbon market will be officially operated nationwide, allowing for the inclusion of additional types of certified carbon credits, expanding the range of participants in carbon credit exchanges, and exploring possibilities for connecting the domestic carbon market with regional and global markets.
The draft proposal outlines five key task groups: commodities in the carbon market, market participants, carbon exchange, market operation, and raising awareness and capacity building.
At the meeting, representatives from various ministries and sectors discussed and agreed on several previously divergent viewpoints, including the responsibilities of the Ministry of Natural Resources and Environment and the Ministry of Finance in governing the carbon market, managing international carbon credit exchange activities, and allocating tasks among ministries and sectors.
The Ministry of Finance is tasked with organizing, managing, monitoring, and supervising activities related to commodity exchanges in the carbon market, as well as addressing complaints, denunciations, and violations pertaining to commodity exchange activities in this market.
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