Harmonizing national and business interests in carbon credit exchange

On September 26, the Department of Climate Change (Ministry of Agriculture and Environment) held a consultation workshop with representatives of major domestic corporations and enterprises on issues related to the international exchange of greenhouse gas emission reduction outcomes and carbon credits.

Currently, the Ministry of Agriculture and Environment is leading the drafting of a Government Decree on international exchanges of greenhouse gas emission reduction outcomes and carbon credits, under the direction of the Prime Minister.

4 key national considerations in international exchanges

Mr. Nguyen Tuan Quang, Deputy Director General of the Department of Climate Change and representative of the drafting body, noted that from a national perspective, international exchanges should be considered in four main aspects.

First, Vietnam must ensure its international commitments on greenhouse gas emission reduction as set out in its Nationally Determined Contribution (NDC). The international market requires corresponding adjustments, meaning that carbon credits transferred abroad from Vietnam will be counted toward the NDC of the partner country. Therefore, Vietnam must avoid overselling credits, which could leave insufficient resources to meet its own domestic commitments.

“If this happens, Vietnam may face restrictive measures from the international community, similar to the ‘yellow card’ in the fisheries sector,” Quang emphasized.

Secondly, stabilizing the domestic carbon market is crucial. At present, the Ministry of Finance is drafting a Decree on the carbon trading exchange, which is expected to be operational by the end of this year. Under current regulations, enterprises are allowed to offset up to 30% of their greenhouse gas emission quotas with carbon credits. Therefore, when international trading is permitted, it is necessary to retain a sufficient amount of credits for the domestic market to avoid risks of speculation or shortages.

Thirdly, taxation, fees, and charges in international transactions must be properly managed. Without a sound calculation and strict control mechanism, Vietnam could lose an important source of revenue from this activity.

Fourthly, support for domestic enterprises must be ensured as they participate in international commitments on emission reduction, such as the CORSIA mechanism in the aviation sector or carbon border adjustment mechanisms (CBAM) from the European Union, the U.S., and the U.K. If the domestic supply of carbon credits is insufficient, Vietnamese businesses will be forced to purchase credits from abroad at higher costs.

Mr. Quang also noted that from a business perspective, investments in emission reduction that generate carbon credits must be accompanied by mechanisms that allow maintenance and international exchange, thereby creating revenue streams for reinvestment in production. Therefore, the drafting of the Decree must ensure a balance between national and business interests, while also establishing incentives for stronger participation. “The experience and inputs from delegates today will serve as an important foundation for the Department of Climate Change to finalize the draft Decree, with both theoretical grounding and practical relevance,” Deputy Director General Nguyen Tuan Quang emphasized.

Regarding the management of emission reduction outcomes and carbon credit exchanges, the draft regulation on international transfer will follow two main approaches: exchanges under the Paris Agreement framework and exchanges outside the Paris Agreement framework through voluntary mechanisms. Credit transfers between parties must be consistent and transparent, formalized through official international transfer approval documents. 

In drafting the Decree, the Department of Climate Change is also considering proposals on differentiated transfer ratios for emission reduction outcomes and carbon credits, depending on the priority level of domestic NDC targets and categorization of activities with or without corresponding adjustment requirements with international partners. The remaining emission reduction outcomes and carbon credits will continue to serve as the supply source for the domestic carbon market.

Enterprise perspectives and policy

According to Ms. Ha Thi Thu Hang, representative of Vietnam Airlines, the aviation sector will start participating in the CORSIA mechanism on a voluntary basis from 2026. It is estimated that Vietnam Airlines will need between 312,000 and 420,000 carbon credits as early as the following year to offset its emission reduction obligations. The airline, therefore, has a significant demand for domestic carbon credits to comply with this mechanism and hopes that related administrative procedures will be streamlined. 

Representatives from government agencies and enterprises emphasized the strong demand for buying and selling emission reduction outcomes and carbon credits, expressing hope that the new Decree will establish a clear legal framework for such activities.

Mr. Tran Ky Anh, representative of VinGroup, proposed allowing a higher international transfer ratio and exemptions from retention requirements for low-risk projects such as electric vehicles and renewable energy. He noted that Vietnam’s commitments to greenhouse gas reduction with the international community will become increasingly ambitious, especially after 2030, in order to achieve the goal of net-zero emissions by 2050. This will directly affect the volume of international transactions, and therefore regulatory agencies should carefully consider this factor when setting transfer ratios to ensure that emission reduction investments remain attractive.

Within the consultation framework, representatives of major corporations and state-owned enterprises shared their desire to participate in the carbon credit market. They proposed appropriate mechanisms to facilitate businesses, exchanged ideas, and put forward initiatives to strengthen supply–demand connections for carbon credits. They also proposed policies to support emission reduction activities and credit generation in Vietnam in the coming time.

The policy advisory unit presented detailed studies and calculations on the impact of international carbon credit trading on Vietnam’s implementation of its NDC commitments and on the development of the domestic market.

The Ministry of Agriculture and Environment is expected to finalize the draft Decree on the international exchange of greenhouse gas emission reduction outcomes and carbon credits and submit it to the Government in 2025.