The government issued Decree No. 29/2026/ND-CP on January 19 on the domestic carbon exchange, in the context of the Prime Minister approving the Scheme on the “Establishment and Development of the Carbon Market in Vietnam” under Decision No. 232/QD-TTg issued in January 2025.
The Scheme clearly defines the viewpoints, objectives, roadmap, and tasks and solutions for forming and developing Vietnam’s carbon market. It aims to promote low-emission technologies, contribute to building a low-carbon economy, and achieve the target of net-zero emissions by 2050.
Legal foundation
The Decree stipulates that greenhouse gas emission allowances and carbon credits traded on the carbon trading system are those permitted to be exchanged on the carbon exchange in accordance with Decree No. 06/2022/ND-CP dated January 7, 2022, on greenhouse gas emission reduction and ozone layer protection, as amended and supplemented by Decree No. 119/2025/ND-CP.
Entities eligible to participate in trading on the domestic carbon exchange are those authorized to exchange greenhouse gas emission allowances and carbon credits in accordance with Decree No. 06, as amended and supplemented by Decree No. 119.
According to the Prime Minister’s Decision, Vietnam’s carbon market is to be developed under a centralized model, operating on market principles under State management and supervision, ensuring openness, transparency, safety, and alignment with national conditions and international practices.
The Decision specifies that during the pilot operation of the domestic carbon exchange through December 31, 2028, the Vietnam Securities Depository and Clearing Corporation, the Vietnam Exchange, and the Hanoi Stock Exchange will not charge fees for services provided on the domestic carbon exchange.
From January 1, 2029, the Vietnam Securities Depository and Clearing Corporation, the Vietnam Exchange, and the Hanoi Stock Exchange will collect service fees for activities on the domestic carbon exchange in accordance with regulations.
Experts view the issuance of the Decree on the domestic carbon exchange as a concrete step to operationalize the contents set out in the Prime Minister’s Decision, providing a legal basis for organizing, operating, and managing carbon trading activities in Vietnam according to the approved roadmap.
Mr. Truong Tu Long, Expert on Policy and Law at GREEN IN Vietnam, told Vietnam Economic Times / VnEconomy that the new Decree provides specific regulations for market trading activities and serves as a crucial “missing piece” and foundation for operating and developing Vietnam’s carbon market under Decision No. 232.
Along with the Decree, additional policies, such as allowance allocations and regulations on international carbon credit exchanges, are expected to be issued in the time to come, contributing to a more complete legal and policy framework for operating a carbon market in Vietnam and connecting the domestic market with regional and international markets.
Mr. Tran Ky Anh, a carbon credit expert, emphasized that the launch of the domestic carbon exchange is a significant step in Vietnam’s journey towards its net-zero goals. Decree No. 29 will supplement and refine existing regulations under the Law on Environmental Protection 2020 and Decree No. 06, as amended and supplemented by Decree No. 119.
Mobilizing resources
Experts have said the carbon market will help generate green financial resources, promote green enterprises, and realize Vietnam’s net-zero emissions by 2050 commitment, helping it achieve its Nationally Determined Contribution (NDC). The operation of the carbon exchange will play a pivotal role in the green transition, the development of a low-carbon economy, and climate change response.
“The carbon exchange provides a centralized, transparent platform under State management,” Mr. Anh noted. “It helps price carbon more accurately, reflecting emission costs and the value of emission reduction activities. These price signals directly influence corporate investment decisions, channeling capital into clean technologies, renewable energy, energy efficiency, and cost-effective emission reduction solutions.”
Moreover, it serves as a channel to mobilize social resources for the green transition, easing pressure on the State budget, helping Vietnam gradually connect with international carbon markets, and attracting foreign capital into projects that reduce and absorb greenhouse gases.
He added that enterprises participating in the market must cap total greenhouse gas emissions in line with allocated allowances. For companies that have proactively invested in emission reductions, this presents an opportunity to recover investment capital and generate additional revenue by selling unused allowances or carbon credits.
“Participation in the carbon market also helps enterprises strengthen ESG [environmental, social, and governance] practices, improve brand image, and enhance access to green finance,” he continued. “Conversely, companies that lag in the green transition will face higher costs, affecting their competitiveness.”
Mr. Long believes the carbon market should also be viewed as a financial market that mobilizes capital for the economy, specifically financing the implementation of green and emission reduction projects.
To realize its net-zero by 2050 target, Vietnam is currently promoting a wide range of emission reduction projects across industrial production, agriculture, and forestry. Green development and emission reduction projects are expected to benefit significantly from the establishment of a domestic carbon exchange.
According to Mr. Long, the exchange will serve as a venue to trade and sell outputs in the form of carbon credits generated by facilities and enterprises, providing additional financial resources to offset initial investments and potentially generate profits. Enterprises with large emission volumes, under a flexible mechanism, may choose to purchase carbon credits on the compliance market instead of buying emission allowances. Overall, the emergence of the carbon market is expected to deliver benefits to both the supply and demand sides.
As greenhouse gas reduction requirements become increasingly stringent, particularly for high-emission sectors, the gradual formation and operation of the domestic carbon market carries strategic significance not only for compliance but also for enhancing enterprises’ long-term competitiveness.
The carbon market offers a flexible mechanism that allows enterprises to meet emission reduction obligations along a more suitable roadmap, while encouraging cost-effective investment decisions. More importantly, it helps businesses become familiar with carbon pricing mechanisms, emissions transparency, and carbon risk management - standards that are increasingly becoming the norm in international markets.
If effectively designed and implemented, the carbon market could not only reduce compliance costs for enterprises but also unlock financial resources for the green transition. Estimates suggest that operating the domestic carbon market could help enterprises cut compliance costs by $400 million to $800 million, freeing up investment for greenhouse gas reduction technologies. If Vietnam participates in international carbon markets, it could potentially attract between $500 million and $2 billion in investment from international climate finance and green transition funding sources.
Considerations and recommendations
To seize opportunities and ensure the effective operation of the carbon exchange, experts stress the importance of comprehensive and accurate emissions data inventories. Enterprises should prioritize building robust Measurement, Reporting, and Verification (MRV) systems. According to Mr. Anh, only with reliable data can companies develop proactive and effective market participation strategies.
Enterprises are also advised to approach the carbon market with a long-term mindset, aligning participation strategies with broader green transition goals, technological innovation, and energy efficiency improvements, rather than treating participation as a short-term compliance exercise.
Though the carbon exchange is expected to officially begin operations by the end of 2026, companies should start preparing early. “The carbon market is a new and complex game,” Mr. Ky Anh emphasized. “Early movers with solid preparation will have a clear advantage.”
From a market trend perspective, Mr. Long noted that in 2025 the international carbon market experienced a major shift in demand. Instead of focusing on volume as in the past, the market is now prioritizing high-quality removal credits, generated from nature-based solutions such as afforestation, sustainable forest management, agroforestry models, or direct carbon capture and storage projects. In contrast, reduction and avoidance projects are no longer prioritized.
Accordingly, experts recommend that instead of focusing solely on renewable energy projects as before, investors and enterprises should turn towards greenhouse gas removal and nature-based projects. Carbon credits from these projects are expected to be more sought after and command higher prices in the coming period.
This view was also highlighted by Dr. Beria Leimona, Theme Leader for Climate Change, Energy and Low-carbon Development at scientific researchers CIFOR-ICRAF, who pointed out that the potential and growth trajectory of carbon credit projects are substantial, with a strong correlation between high credit quality and pricing. Nature-based removal credits currently command the highest prices, while forest and ocean carbon credits and blue carbon are also highly valued, with blue carbon prices rising sharply in recent times.
Decree No. 29/2026/ND-CP on the domestic carbon exchange consists of six chapters and 35 articles, governing activities such as registration, issuance of domestic codes, transfer of ownership, custody, and the trading and settlement of transactions involving greenhouse gas emission allowances and eligible carbon credits traded in accordance with the law; the responsibilities of agencies and organizations in managing the domestic carbon exchange; and requirements in reporting and information disclosure.
Mr. Todd Berkinshaw, CEO of NatureCO, said significant financial resources from global investment funds and corporations are seeking to invest in nature-based carbon projects, particularly those with low risk, high integrity, and strong value creation.
Experts believe the carbon market is not merely about “selling CO₂” but rather a mechanism to transform the challenge of climate change into opportunities for green economic development. Every ton of CO₂ cut represents economic value, and takes Vietnam a step closer to its net-zero emissions by 2050 goal.
