The carbon market in the new era towards Net Zero

With the theme "Carbon Market in the New Era", the Net Zero Vietnam Forum 2025 showcases Vietnam's steadfast commitment to achieving net-zero emissions by 2050, while simultaneously advocating for the establishment and operation of a carbon market as a critical economic instrument to achieve this objective.

The most robust commitment is Net Zero

Speaking at the opening of the event, Dr. Le Xuan Nghia, representative of the Institute of Development Consulting, emphasized: "Net Zero is the strongest commitment humanity has ever made and has attracted the participation of many countries worldwide. Nevertheless, this is not the ultimate destination. In order to effectively address the increasing severity of climate change, humanity must continue to advocate for more robust measures in the future.

Climate disasters are escalating at an unprecedented rate, as per Mr. Nghia. Epidemics, droughts, floods, and the severe degradation of land, water, and forest resources are no longer exclusively issues that affect developing countries; they have also impacted significant economies such as the United States.

Vietnam previously declared its commitment to achieve Net Zero by 2050 at COP26. Since then, numerous significant solutions have been implemented to mitigate greenhouse gas emissions in critical sectors, including agriculture, energy, transportation, and industry.

Vietnam is also committed to advancing renewable energy sources, such as solar and wind power, promoting a circular economy model, and improving energy efficiency. This commitment not only facilitates Vietnam's response to climate change but also establishes the necessary conditions for the attraction of investment resources and the expansion of international cooperation in the pursuit of sustainable development.

Nevertheless, Vietnam has a mere 25 years to execute the Net Zero roadmap, a brief period in light of the intricacy and magnitude of the dual objective: to simultaneously reduce emissions and sustain economic growth in order to become a high-income, developed nation.

Consequently, this year's Forum's objective was to advance Vietnam's Net Zero voyage by implementing policy, institutional changes, practical actions, and technological innovation in line with the latest global trends.

The carbon market is a critical financial instrument

Immediately following COP26, the Vietnamese Government issued a plan to implement the Net Zero commitment with five key solution groups: energy transition, energy saving, protection and development of forest ecosystems, carbon capture and storage, and carbon pricing, according to Dr. Nguyen Tuan Quang, Deputy Director General of the Department of Climate Change (Ministry of Agriculture and Environment).

Mr. Quang underscored the significance of carbon pricing as a solution, as it has the potential to mobilize the necessary financial resources for Vietnam and contribute approximately 28% to reducing greenhouse gas emissions. Currently, carbon pricing is implemented through two common mechanisms: a carbon tax, which imposes a fixed price, and a carbon market, which establishes emission limits and enables the trade of carbon credits and allowances.

Currently, the carbon market is implemented in two distinct ways: a mandatory market tied to legal regulations and a voluntary market designed to support businesses' carbon neutrality objectives. The Measurement, Reporting, and Verification (MRV) system is essential for guaranteeing the accuracy and transparency of transactions.

Vietnam has implemented an initial legal framework for the carbon market through Decree 119 and Decision 232. The plan anticipates that the pilot phase will commence in late 2025 and conclude in 2028. This phase will involve the unrestricted allocation of allowances and the establishment of a carbon exchange. The official implementation of auction mechanisms and international connectivity will commence in 2029.

Nevertheless, Mr. Quang also recognized that the carbon market in Vietnam faces numerous obstacles, including a lack of inter-sectoral coordination, limited technical capacity, and insufficient business awareness. To overcome these obstacles, it is imperative to finalize the institutional framework, enhance human resource training, expand international cooperation, and digitalize the system.

Assoc. Prof. Dr. Nguyen Dinh Tho, Deputy Director of the Institute of Strategy, Policy on Agriculture and Environment, stated at the forum that the carbon market will be one of the most critical instruments for mobilizing climate finance in the coming decade. He placed a high value on Vietnam's efforts to establish a legal corridor for the carbon market.

However, for the carbon market to function efficiently, comprehensive technical guidelines must be implemented, and management and monitoring capabilities must be improved at both the local and enterprise levels. Vietnam's carbon exchange must be structured in accordance with international standards to guarantee transparency, efficiency, and openness in trading activities.

Speakers presented a plethora of studies, shared international experiences, and extracted lessons from businesses regarding the development of carbon markets within the event's framework.

Additionally, the Organizing Committee presented the "Outstanding Net Zero Journey" emblem to recognize initiatives, projects, organizations, and individuals who have made exceptional contributions to promoting sustainable development and emission reduction in Vietnam.