Establishing the exchange model

Recently, the Government issued Decree No. 29/2026/ND-CP dated January 19, 2026, on the domestic carbon exchange (effective from the date of issuance). Accordingly, the exchange will operate under a centralised mechanism, subject to strict supervision by state management authorities.

The Ha Noi Stock Exchange has been assigned to organise and operate the trading system; the Viet Nam Securities Depository and Clearing Corporation will be responsible for custody and settlement; while the Viet Nam Stock Exchange will assume overall supervisory responsibility for the market.

Commodities traded on the exchange include greenhouse gas emission allowances and eligible carbon credits permitted for trading under Decree No. 06/2022/ND-CP (as amended and supplemented). The entire process of trading, transfer of ownership, custody, and settlement will be standardised to ensure transparency and effective risk control.

The Decree clearly stipulates that activities on the carbon exchange include: trading support services; operation of the trading, custody, and settlement systems; deposit of allowances; and settlement of transactions. All activities must adhere to the principles of openness, transparency, and fairness. Each participant may use only one account to conduct transactions. Carbon custody members must satisfy requirements under securities law, meet information technology infrastructure standards, and must not be under warning, supervision, or suspension status.

The launch of the carbon exchange marks Viet Nam’s first official carbon trading platform. However, the country has previously participated in emission trading projects and mechanisms with Japan and Europe. According to the Ministry of Agriculture and Environment, more than 260 projects are currently underway nationwide, transferring tens of millions of tonnes of carbon credits and generating revenue of trillions of VND annually.

The provisions of Decree No. 29/2026/ND-CP present opportunities and benefits for various stakeholders, including individuals and organisations owning or exploiting carbon-generating sources; enterprises with high levels of greenhouse gas emissions; and even companies that do not fully utilise their allocated allowances and may therefore trade the surplus.

Gradually removing bottlenecks

Bringing the carbon market onto an exchange platform also presents numerous challenges. First, the allocation of greenhouse gas emission allowances to enterprises must ensure objectivity and transparency in order to prevent abuse for illicit gain. Clear regulations are also required regarding pricing and payment mechanisms for owners of carbon-generating sources.

At present, Viet Nam does not yet have an independent organisation meeting international standards to conduct valuations, nor does it have comprehensive legal provisions and detailed guidance governing this type of “intangible” commodity. In the absence of a complete legal framework, credit institutions may face significant difficulties in conducting related transactions such as trading, deposits, and collateralisation.

According to economic expert Dr Pham Duc Anh of the Banking Academy, recognising carbon credits as a form of secured asset would open up opportunities for both enterprises and credit institutions. To achieve this, carbon credits must be supported by a robust legal framework and meet international standards.

At the same time, state management authorities need to establish supervisory mechanisms to ensure credit quality and effectively prevent and address potential risks. Oversight of transactions in this market must also be taken into account. Globally, there have been numerous cases of carbon credit trading fraud, causing losses amounting to billions of euros and damaging the reputations of the countries concerned.

Several countries, including China, Australia, and some European nations, have recognised carbon credits as assets that can be utilised in financial activities. Such credits only hold value when verified by a reliable control system and protected by clear legal provisions, enabling the verification of origin, legality, and quality of each transaction.

In Viet Nam, Decree No. 29/2026/ND-CP has initially addressed these issues through the National Carbon Credit Registry System. How the system operates in practice and whether carbon credits will be accepted as secured assets, particularly in international transactions, will require further time to assess.

Another challenge lies in the limited capacity to generate and bring carbon credits to the domestic market. According to data from the Ministry of Agriculture and Environment, from 14.9 million hectares of forest, the total potential is estimated at around 70 million tonnes of carbon credits. However, the economic value derived from this resource remains modest.

According to Vice Chairman and Secretary-General of the Viet Nam Forest Owners Association, Nguyen Ba Ngai, the lack of clear ownership regulations has created obstacles for forest owners seeking to trade carbon credits. Meanwhile, a report by the Viet Nam Administration of Seas and Islands (under the Ministry of Agriculture and Environment) indicates that with approximately 1 million square kilometres of sea (equivalent to 100 million hectares), the potential for generating carbon credits from marine ecosystems is also considerable. Therefore, Decree No. 29/2026/ND-CP is expected to serve as an initial gateway for this promising market in the years ahead.