Greenhouse gas inventory - Prerequisite for participation in the carbon market

Mandatory requirement for emission quota allocation

Periodic greenhouse gas inventories conducted under the provisions of Decree No. 06/2022/ND-CP are considered a comprehensive review process aimed at identifying all emission sources generated from production and operational activities at a facility. This mechanism enables businesses to gain a comprehensive overview of their carbon footprint, thereby laying the foundation for reporting and fulfilling emissions-reduction commitments in accordance with legal requirements.

When conducting greenhouse gas inventories, businesses are required to clearly define the scope and boundaries of emissions, including direct emissions (Scope 1), indirect emissions from energy consumption (Scope 2), and, where applicable or sector-specific requirements exist, other indirect emissions (Scope 3). At the same time, enterprises must ensure the quality of activity data, prioritize the use of national emission factors, establish data quality management procedures, and prepare complete greenhouse gas inventory reports.

The list of sectors and facilities required to conduct greenhouse gas inventories is not fixed, but is issued and updated every two years by the Prime Minister. In the latest 2024 update, 2,166 facilities were included on the list, and this number is expected to continue to change in the next revision scheduled for 2026.

According to the Department of Climate Change under Ministry of Agriculture and Environment, during the 2025 inventory cycle, most facilities submitted their greenhouse gas inventory reports to provincial People’s Committees and relevant line ministries, while a small number of enterprises had yet to fulfill their obligations due to mergers, shutdowns, or ownership transfers.

Based on these reports, MAE, in coordination with the Ministry of Industry and Trade and the Ministry of Construction, proposed greenhouse gas emission quotas for 2025 and 2026, and submitted them to the Prime Minister for consideration and approval of total emission quotas by phase and annually.

In March 2026, MAE issued a decision on the pilot allocation of emission quotas for 2025 and 2026 to 110 facilities, representing approximately 40% of Vietnam’s total greenhouse gas emissions.

These include 51 cement production facilities, 34 thermal power plants, and 25 iron and steel production facilities. All are among the 2,166 facilities required to conduct greenhouse gas inventories under the Prime Minister’s list.

The 110 facilities are obligated to surrender greenhouse gas emission quotas and are entitled to buy and sell quotas and carbon credits on the domestic carbon market. This move officially transforms emission reduction outcomes into a commodity with economic value.

Businesses that proactively invest in green technologies and optimize production processes to keep actual emissions below their allocated quotas can sell surplus allowances to facilities exceeding their limits, thereby generating additional revenue for reinvestment.

Conversely, enterprises that are slow to transition may face significant financial burdens as they are required to purchase additional quotas or carbon credits to offset excess emissions. Failure to comply could also result in penalties and reputational risks that may hinder long-term sustainable development.

Regarding guidelines on greenhouse gas inventory methodologies and procedures, MAE has issued Circular No. 17/2022/TT-BTNMT dated November 15, 2022 for the waste management sector; Circular No. 19/2024/TT-BNNPTNT for the livestock sector; and Circular No. 23/2023/TT-BNNPTNT dated February 1, 2024 for the forestry sector.

The Ministry of Industry and Trade issued Circular No. 38/2023/TT-BCT dated December 27, 2023 for sectors under its management. Meanwhile, the Ministry of Construction issued Circular No. 13/2024/TT-BXD dated December 20, 2024 for the construction sector, and Circular No. 63/2024/TT-BGTVT dated December 30, 2024 for the transport sector.

Avoid turning greenhouse gas inventories into a procedural burden

After more than a year of implementation, although ministries have made considerable efforts to provide training and guidance on greenhouse gas inventories, it must be acknowledged that this remains a relatively new activity for most Vietnamese enterprises. In general, many businesses still have a limited understanding of the regulations, technical requirements, and emission reduction obligations related to greenhouse gas inventories.

According to Tran Thi Ngoc Anh from the Commission for the Standards, Metrology and Quality of Viet Nam (under the Ministry of Science and Technology), the commission has identified several common issues while guiding enterprises and organizations in conducting greenhouse gas inventories and verifying inventory results.

For example, some businesses fail to account for direct emission sources from wastewater treatment systems or refrigerant leakage, exclude indirect emission sources without sufficient explanation, collect inaccurate or incomplete data, or apply incorrect emission factors. Due to the broad scope of verification and the complexity of emission sources, verification bodies sometimes lack sufficient time to thoroughly review operational data, increasing the risk of oversight. This could significantly affect the quality of greenhouse gas inventory activities.

As part of efforts to reduce administrative procedures and compliance costs for businesses, Decree No. 119/2025/ND-CP has shifted the management approach from pre-audit to post-audit supervision.

According to Luong Quang Huy from the Department of Climate Change, in the upcoming inventory cycle, facilities included in the greenhouse gas inventory list, but not yet allocated emission quotas, will submit periodic inventory reports to provincial People’s Committees before March 31, 2027.

Unlike previous requirements, provincial authorities will no longer be responsible for appraising the inventory reports, but will instead receive, review, and forward the information to MAE and the relevant line ministries.

Businesses will submit greenhouse gas inventory reports for the 2025-2026 period to provincial People’s Committees before March 31, 2027.

Businesses allocated emission quotas will submit verified greenhouse gas inventory reports for the 2025-2026 period to MAE before December 1, 2027.

However, the 110 facilities allocated emission quotas are still required to have their greenhouse gas inventory reports verified by independent assessment bodies. The verification results serve as the legal basis for determining emission quotas, and any inaccuracies in the inventory may lead to adjustments or withdrawal of a facility’s allocated quotas. Currently, the list of qualified independent verification bodies has been publicly disclosed for businesses to select from.

In the coming period, MAE is expected to pilot an online emissions reporting system. Under this system, businesses will only need to input operational data, such as coal or fuel consumption, while the software will automatically calculate emissions based on national standard emission factors and generate reports in the prescribed format.

In addition, the system will be integrated with the National Registration System for greenhouse gas emission quotas and carbon credits, allowing businesses allocated quotas to complete both procedures, greenhouse gas inventory reporting and quota surrender obligations, through a single declaration process.

This digitalization solution is expected not only to enhance data transparency and traceability but also to help businesses significantly reduce the cost of hiring external consultants for greenhouse gas inventory services.

A powerful management tool for businesses

In greenhouse gas inventories, regulators emphasize that businesses must accurately identify both direct and indirect emission sources. For inventories serving the pilot allocation of emission quotas, the focus will be placed on core production processes that directly use fossil fuels or carbonate-based raw materials, including electricity generation at thermal power plants, crude steel production at iron and steel facilities, and clinker production at cement plants.

According to Luong Quang Huy, after MAE issued its emission quota allocation decisions, many businesses responded that the allocated quotas were far lower than their facilities' total greenhouse gas inventory results. The discrepancy arose because enterprises were calculating emissions for the entire factory, which were significantly higher than those generated solely by core production stages such as clinker or crude steel manufacturing.

At the same time, many businesses still lack automated energy or emissions management software systems. Operational data are often scattered across different departments, including accounting, engineering, and production, making it difficult to retrieve historical data for inventory reporting. This leads to inconsistencies, errors, and challenges in cross-checking when verification bodies request supporting evidence.

“If businesses provide inaccurate operational data, emission quota allocations will also be inaccurate, causing waste and unnecessary costs because enterprises will not know how to properly account for them,” Huy emphasized.

To optimize greenhouse gas inventory processes and turn them into a competitive advantage, businesses should establish digitized Activity Data (AD) management systems to standardize data collection at the source, thereby accelerating verification processes and minimizing subjective errors.

In addition, regulators recommend that enterprises establish dedicated emission reduction management units and provide regular training on MRV methodologies, ISO 14064-1 for greenhouse gas reporting, and ISO 14064-3 for verification practices. Mastering internal technologies and calculation capabilities will enable businesses to respond promptly to post-audit inspections instead of relying entirely on external consultants.

Rather than viewing greenhouse gas inventories as merely a compliance cost burden, businesses should regard them as a smart management tool that helps identify major emission “hotspots.” This can support the development of optimized mitigation roadmaps and targeted investments in clean energy and energy-efficient technologies.

Effective participation by businesses during the pilot phase will also help regulators refine greenhouse gas emission benchmarks so that they better reflect actual production conditions, thereby ensuring fairness and sustainability once the carbon market becomes fully operational in the future.

From June 4-6, 2026, in Cua Lo Ward, Nghe An Province, the Ministry of Agriculture and Environment, in coordination with the Nghe An Provincial People’s Committee, will organize a series of communication events in response to World Environment Day (June 5), World Oceans Day (June 8), the Month of Action for the Environment, and Viet Nam Sea and Islands Week 2026.

1. National Forum on Environment and Climate - From Policy to Action

• Time: 8:00 AM, June 5, 2026

• Venue: Vinpearl Cua Hoi, Cua Lo Ward, Nghe An Province

• Online participation: ID: 942 6837 3034. Passcode: KH0605.

2. National Workshop on “Improving Institutions and Policies to Promote Sustainable Marine Economic Development”

• Time: 2:00 PM, June 5, 2026

• Venue: Vinpearl Cua Hoi, Cua Lo Ward, Nghe An Province

• Online participation: ID: 934 2999 5099. Passcode: HT0506

3. Art Program “Vietnam Sea - A Journey Toward Green Spaces”

• Time: 8:00 PM, June 5, 2026

• Venue: Binh Minh Square, Cua Lo Ward, Nghe An Province

4. Exhibition on Blue Marine Economy - Sustainable Agriculture and Environment

• Time: June 4-6, 2026

• Venue: Binh Minh Square, Cua Lo Ward, Nghe An Province