VIETNAM’S CARBON MARKET: A PROMISING FUTURE FROM ITS FIRST TRADING SESSION
29 June 2026 marked a significant milestone in Vietnam’s transition toward a green economy with the official launch of the domestic carbon exchange. This represents a concrete step in implementing the Government’s roadmap for developing Vietnam’s carbon market, pursuant to the Prime Minister’s Decision approving the Scheme for the Establishment and Development of the Carbon Market in Vietnam and Decree No. 29/2026/ND-CP on the Domestic Carbon Exchange. The launch also contributes to realizing Vietnam’s commitment to achieving Net Zero emissions by 2050.
The First Carbon Trading Session
On its opening day, the market recorded its first carbon transactions. According to officially released data, the VN2025 greenhouse gas emission allowance recorded a trading volume of 1,210 tonnes of CO₂, with a total transaction value of approximately VND 161.6 million. Trading prices ranged from VND 130,000 to VND 136,000 per tonne of CO₂, with the closing price at VND 130,000 per tonne. During the pilot phase, which will run until the end of 2028, the Government has waived all trading service fees to encourage businesses to participate in the market. The trading platform operates on the infrastructure of the Hanoi Stock Exchange (HNX) and the Vietnam Securities Depository and Clearing Corporation (VSDC), ensuring that trading, registration, custody, and settlement activities are conducted in a secure, transparent, and reliable manner.
The Significance of the Carbon Market
The Carbon markets are carbon pricing mechanisms that enable governments and non-state actors to trade greenhouse gas emission allowances and carbon credits. Their primary objective is to achieve climate targets and implement climate actions in a cost-effective manner. Within the carbon market, businesses and organizations purchase emission rights when they need to offset their greenhouse gas emissions in order to meet either voluntary or mandatory emission reduction targets. Conversely, sellers are entities whose emissions remain below their allocated emission limits or those capable of generating tradable emission rights through certified carbon credits derived from eligible mitigation activities.
Two assets are traded in carbon markets include greenhouse gas emission allowances and carbon credits. Emission allowances represent the amount of greenhouse gases that an enterprise is legally permitted to emit under regulations established by the competent state authority. Enterprises that emit less than their allocated allowances may sell the surplus, while those exceeding their allowances must purchase additional allowances from other market participants. Carbon credits, by contrast, are generated from verified greenhouse gas emission reductions or removals. One carbon credit is generally equivalent to one tonne of CO₂ that has either been avoided or removed relative to an established baseline. Examples include carbon credits generated through sustainable forest protection, development, and management activities that enhance carbon sequestration. During Vietnam’s pilot phase, which extends until the end of 2028, only greenhouse gas emission allowances are traded on the domestic carbon exchange.
The launch of the domestic carbon exchange represents not only a milestone in strengthening Vietnam’s institutional framework for green economic development but also establishes a transparent and market-based mechanism for trading greenhouse gas emission allowances and carbon credits. Through market-based carbon pricing, enterprises are encouraged to invest in cleaner technologies, improve energy efficiency, reduce emissions, and achieve these objectives at lower overall costs. From a broader economic perspective, the carbon market constitutes a new component of Vietnam’s green finance ecosystem, facilitating the mobilization and allocation of financial resources for sustainable development projects. Moreover, it enables Vietnam to gradually align with international practices while enhancing the competitiveness of domestic enterprises amid increasingly stringent global climate requirements and green trade measures.
Opportunities and Challenges
Vietnam enters the operational phase of its carbon market with several important advantages. Considerable progress has been made in establishing a comprehensive legal framework to support the market’s development and effective operation. Following the enactment of the 2020 Law on Environmental Protection, the Government issued Decree No. 06/2022/ND-CP on greenhouse gas emission mitigation and ozone layer protection. Subsequently, Decree No. 119/2025/ND-CP introduced more detailed provisions regarding enterprises’ obligations in greenhouse gas inventories and the allocation of emission allowances. In early 2025, the Scheme for the Establishment and Development of the Carbon Market in Vietnam was approved, marking a significant step in preparing for the market’s operation. The legal foundation was further strengthened through the promulgation of Decree No. 29/2026/ND-CP on the domestic carbon exchange and Decree No. 112/2026/ND-CP governing the international exchange of greenhouse gas emission reduction outcomes and carbon credits.
Alongside the legal framework, the trading and settlement infrastructure has been established, and enterprises participating in the pilot phase have received training before entering the market. The waiver of trading fees during the initial stage helps reduce transaction costs while encouraging businesses to become familiar with the new mechanism. Furthermore, the market enables enterprises to regard emission allowances as valuable assets, creating incentives to invest in cleaner technologies, generate surplus allowances for trading, and reduce future demand for carbon credits.
Nevertheless, Vietnam’s carbon market also faces significant challenges. As an entirely new market, it requires enterprises to establish accurate greenhouse gas inventory systems, strengthen data management capacity, and develop a comprehensive understanding of trading procedures. During the initial phase, market liquidity is expected to remain limited, making negotiated transactions the primary trading mechanism. At the same time, regulatory authorities must continue strengthening market supervision to prevent fraud, market manipulation, and other misconduct while ensuring transparency and maintaining market confidence. Although the first trading session recorded only a modest transaction volume, it carries considerable significance from both economic and environmental perspectives.
The first carbon trading session recorded a modest transaction volume, yet it carries significant implications in both economic and environmental terms. The carbon market not only facilitates the fulfilment of environmental obligations but also enhances the competitiveness of Vietnamese enterprises, particularly as green standards become increasingly prevalent in international trade. Vietnam’s carbon exchange is expected to become an important instrument for promoting green growth, strengthening business competitiveness, supporting the country’s goal of achieving Net Zero emissions by 2050, and contributing to the sustainable development of the national economy.
Division of Public international law
Hanoi Law University