Vietnam is not pursuing large volumes of cheap carbon credits but is instead prioritizing quality to protect its credibility.

Forest resources are now a major source of offset credits for both businesses and governments. Photo: Mekong ASEAN

The position was outlined by Nguyen Tuan Quang, Deputy Director General of the Department of Climate Change under the Ministry of Agriculture and Environment, at a workshop on global and Vietnamese carbon market trends this week.

“Vietnam does not sell cheap carbon credits,” Quang said.

A carbon credit is a tradable certificate that grants the holder the right to emit one ton of CO2 or an equivalent amount of another greenhouse gas.

Quang explained that forest resources are now a major source of offset credits for both businesses and governments and have become a highly valued environmental asset.

Major markets are tightening their requirements on sustainability, transparency, integrity and the prevention of double-counting.

Dr. Beria Leimona, a lead expert from the Center for International Forestry Research, said forest-based credits under the REDD+ (reducing emissions from deforestation and forest degradation) mechanism along with credits generated from peatlands and mangrove ecosystems, are also being scrutinized more closely.

Data from the non-profit Forest Trends shows that credits from avoided deforestation projects were traded for more than US$6 last year, down 23%.

Newly planted forest credits and afforestation and reforestation (ARR) credits reached $20.4, rising 19%. Blue carbon credits from mangroves and seagrass approached $30, increasing three and a half times.

Low-quality credits are often described as “paper credits” by Professor Terry Sunderland of the University of British Columbia. He said these credits do not represent real emission reductions and therefore weaken trust and global climate ambition.

While higher prices may benefit producers, Dr. Beria noted that strict standards can create barriers for smallholders or communities with limited capacity. Markets may favor large corporate projects instead of local initiatives.

To raise the quality of Vietnam’s carbon credits, strengthening the Measurement, Reporting and Verification (MRV) system will be essential to ensure market recognition. Professor Sunderland added that stronger market governance is needed to prevent the growth of “paper credits.”

He also pointed out that challenges such as lack of additionality and the risk of emission leakage remain difficult problems in many countries.

The professor recommended that Vietnam establish a strong legal framework to support market governance and provide a foundation for the carbon market.

A unified credit standard with clear guidance and decentralization would be a key step, said Sunderland. He added that Vietnam should attract more private investment into emission reduction projects built on principles of transparency and benefit sharing.

Vietnam aims to pilot its carbon exchange platform by the end of 2026 before launching full operations and linking to international markets by 2029.

A draft decree on the carbon exchange has been submitted to the prime minister. The Ministry of Agriculture and Environment is preparing another decree on international transfers of emission reduction results and carbon credits which is expected to be submitted to the Government in December.