MAE issues legal framework for GHG reduction exchanges

On April 1, 2026, the Government issued Decree No. 112/2026/ND-CP on the international transfer of greenhouse gas emission reduction outcomes and carbon credits. The Decree establishes a legal framework for the international exchange of Viet Nam’s greenhouse gas emission reduction outcomes and carbon credits with international partners.

Ensuring corresponding adjustment of mitigation outcomes

Decree No. 112/2026/ND-CP institutionalizes the latest guidance on the global carbon market under Article 6 of the Paris Agreement. It thereby provides a comprehensive and unified legal basis for Viet Nam to participate in international cooperation mechanisms for the exchange of greenhouse gas emission reduction outcomes and carbon credits.

One of the most important objectives is to safeguard national interests by ensuring that the international transfer of emission-reduction outcomes aligns with the implementation of Viet Nam’s national greenhouse gas emission-reduction targets and complies with international regulations.

In principle, mitigation outcomes transferred internationally from Viet Nam must be subject to corresponding adjustment. This means such outcomes will no longer be counted toward Viet Nam’s national emission reduction targets under its Nationally Determined Contribution (NDC), but will instead be counted toward the NDC or other emission reduction targets of the acquiring party.

Under Decree No. 112/2026/ND-CP, the Ministry of Agriculture and Environment is the authority, on behalf of the Government, responsible for issuing approvals for international transfers and implementing corresponding adjustments for the volume of greenhouse gas emission reduction outcomes and carbon credits transferred between Viet Nam and its partners.

All international transfers of greenhouse gas emission reduction outcomes and carbon credits must be recorded in the national registry system for greenhouse gas emission quotas and carbon credits. Approval for international transfers with corresponding adjustment is only granted after the emission reduction outcomes or carbon credits have been issued and after consultation with relevant regulatory authorities.

The new regulation also establishes a legal corridor to mobilize international resources in finance and technology for greenhouse gas mitigation activities, supporting the promotion of green transition, low-carbon economic development, enhanced competitiveness, and contributing to the achievement of net-zero emissions by 2050.

Caps on transfer ratios by mitigation measures

Regarding international transfer ratios, the Decree is designed to both attract investment and ensure the fulfillment of national greenhouse gas emission reduction commitments. Accordingly, mitigation activities are specifically categorized and linked to caps on transfer ratios.

For groups of mitigation measures and activities involving new technologies, high costs, and limited or no prior implementation in Viet Nam, the maximum transfer ratio may reach up to 90%.

For groups of mitigation measures and activities that have already been implemented in Viet Nam but still require additional financial and technological support, the maximum transfer ratio may reach up to 50%.

The cap on maximum transfer ratios, particularly for mitigation measures and activities that have already been implemented or are being implemented in Viet Nam, is intended to ensure that sufficient emission-reduction outcomes remain available for Viet Nam to achieve its NDC before they are sold internationally. By tightening transfer ratios for existing technologies while allowing higher ratios for new technologies, the regulation effectively requires investors to adopt advanced emission-reduction technologies in Viet Nam. This creates a strong incentive to attract investment flows for green transition and the development of a low-carbon economy.

Three groups of international transfer mechanisms

The Government stipulates that emission-reduction outcomes and carbon credits transferred internationally must fall under one of three mechanisms: Article 6.2, the Article 6.4 mechanism of the Paris Agreement, or independent carbon standards.

The Article 6.2 framework includes bilateral or multilateral agreements, negotiated and concluded with international partners under the lead of the Ministry of Agriculture and Environment, in coordination with the Ministry of Foreign Affairs, sectoral ministries, and relevant agencies.

These agreements include key contents such as project registration, recognition of greenhouse gas emission reduction outcomes and issuance of carbon credits; applicable carbon standards and crediting methodologies; financial obligations; dispute resolution mechanisms; recognition and publication of validation and verification bodies; information-sharing mechanisms; and procedures for approving international transfers in cases where Viet Nam receives emission reduction outcomes or carbon credits.

Article 6.4 of the Paris Agreement focuses on the management of emission reduction programs and projects under UN standards. The Decree sets out regulations on program and project registration; amendments to program and project activities; issuance of carbon credits; approval of international transfers; and the transfer of carbon credits to Viet Nam.

Independent carbon standards refer to widely used international carbon standards outside the framework of the Paris Agreement. Relevant regulations include the recognition of carbon crediting methodologies, project registration, and credit issuance. Similar to the two groups above, the approval of international transfers and the receipt of carbon credits from abroad to Viet Nam must also follow strict approval procedures to ensure transparency and safeguard national interests.

A notable point in Decree No. 112/2026/ND-CP is the introduction of specific provisions on international transfers to implement emission reduction targets under international treaties and commitments, including specific obligations related to the aviation sector. This provides an important legal basis that allows agencies and organizations in Viet Nam to proactively purchase and use international carbon credits to comply with the commitments the country has undertaken.

The Decree also clearly defines the responsibilities of ministries, sectors, and local authorities in management, inspection, and supervision. All transactions must be publicly disclosed and recorded in the National Registry System, ensuring maximum transparency and enhancing the effectiveness of state management.

It can be said that the issuance of Decree No. 112/2026/ND-CP marks an important step forward for Viet Nam in completing its legal framework for the carbon market and international climate cooperation. This opens the door to attracting green investment flows and advanced technologies. Proactive integration through a transparent legal framework will not only help the country achieve its net-zero emissions commitment but also affirm Viet Nam’s position as a responsible and promising link in the global low-carbon economic value chain.