Vietnam plans to launch its carbon credit market on a trial basis from 2025 to 2028, without permitting sales to foreign entities while it builds out its infrastructure and allows companies to adapt.
According to a report in Vietnam+, the country is accelerating the development of its carbon market, setting emission quotas for the power, iron and steel, and cement sectors starting in 2025. This move aims to help these industries address the challenges posed by the EU’s Carbon Border Adjustment Mechanism (CBAM) while also refining regulations related to the implementation of Article 6.
The 2025-28 pilot program was discussed at a government meeting held by Deputy Prime Minister Tran Hong Ha, who emphasized the importance of establishing a solid foundation for the domestic carbon credit market.
Throughout the three-year trial period, carbon trading with international parties will be limited, with the exception of transactions conducted under existing international agreements. The goal is to fully activate the carbon market nationwide by 2029 and explore potential connections with global markets.
Relevent: Switzerland And Thailand Made The First Ever Carbon Credits Deal Under Article 6.2
Vietnam’s compliance carbon market taking shape
The compliance carbon market project aims to support Vietnam’s greenhouse gas emission reduction targets under its Nationally Determined Contributions, offering a cost-effective approach to cutting emissions.
Around 200 facilities are expected to receive emission quotas during the pilot phase, representing roughly 45% of the total emissions.
The amendment outlines that power plants, iron and steel factories, and cement production facilities will serve as pilot sectors, receiving government-assigned emission quotas for the years 2025 and 2026. These facilities will be required to develop and execute emission reduction strategies in line with the quotas they are allocated.
The EU has emerged as Vietnam’s largest market for iron and steel exports, with shipments reaching over a third 33.6% of Vietnam’s total exports.
