3 mechanisms for international carbon credit exchange in Viet Nam

According to the Decree, emission-reduction outcomes and carbon credits eligible for international transfer must fall under one of three mechanisms: Article 6.2 or 6.4 of the Paris Agreement, or independent carbon standards.

First, the Article 6.2 mechanism refers to agreements or international treaties signed between the Government of Viet Nam and member countries of the Paris Agreement or international organizations, aimed at fulfilling greenhouse gas emission reduction targets under Nationally Determined Contributions (NDCs) or other climate goals. This mechanism allows the transfer of carbon credits or emission-reduction outcomes between Viet Nam and international partners with written approval from both parties.

Second, the Article 6.4 mechanism is the carbon credit trading and offset mechanism stipulated in Article 6.4 of the Paris Agreement, allowing agencies and organizations participating in programs or projects that generate emission-reduction outcomes to transfer those outcomes internationally. These credits may be used to fulfill NDC targets or other national emission reduction commitments.

Third, independent carbon standards include international carbon credit certification systems outside the framework of the Paris Agreement. These standards set out methodologies for calculating emission reductions, procedures for project registration, and mechanisms for issuing carbon credits in line with international practices.

Accordingly, both the transfer and receipt of international carbon credits must undergo a strict approval process to ensure transparency while safeguarding national interests. The Decree also clearly stipulates separate mechanisms for international exchanges serving climate commitments, including specific obligations in the international aviation sector. This provides an important legal basis for agencies and organizations in Viet Nam to proactively participate in the buying, selling, and use of international carbon credits for compliance purposes.

The guiding principle is that international exchange activities must prioritize Viet Nam’s NDC emission reduction targets and related international commitments, while safeguarding national interests, balancing the interests of all parties involved, and supporting sustainable development in project areas.

All carbon credit transactions and transfers must be recorded in the National Registry System for greenhouse gas emission quotas and carbon credits. Approval for transfer may only be granted after the emission reduction outcomes or carbon credits have been verified and issued, and after appraisal opinions have been obtained from competent authorities.

Under the Decree, the Ministry of Agriculture and Environment is assigned to issue approval documents for international transfer activities, while also carrying out corresponding adjustments to the amount of carbon credits or emission reduction outcomes transferred between Viet Nam and foreign partners.