Vietnam Launch National Carbon Market by 2029

On January 24, 2025, Vietnam’s Prime Minister issued Decision No. 232/QD-TTg, laying out a phased roadmap to operationalize a domestic carbon market by 2029. The plan includes a legal framework to be finalized by June 2025, followed by a multi-year pilot emissions trading system (ETS).

Building on this policy milestone, the Vietnamese government enacted Decree No. 119/2025/NĐ-CP on June 9, 2025, which amends and strengthens the earlier Decree 06/2022. This new decree provides the legal foundation for how the carbon market will actually operate, from allowance allocation and credit issuance to market infrastructure and international linkages.

How This Shifts the Climate Investment Landscape

For years, project developers and sustainability investors have viewed Vietnam as a market full of potential but lacking regulatory clarity. With Vietnam launching a national carbon market by 2029, this creates a new roadmap. Vietnam signals a clear direction: it intends to become an active player in global carbon trading — and it's laying the legal and institutional groundwork to get there.

This development is particularly relevant for countries like Indonesia, where frameworks are also evolving. The shared ambition across ASEAN for environmental integrity and high-quality carbon credits creates space for learning, cooperation, and healthy competition.

Key Milestones Ahead for Vietnam’s Carbon Market

Legal Framework – by June 2025

Vietnam will finalize legal guidelines for carbon credit trading, GHG emissions quotas, and a national registry system. Decree 119 already defines key market components such as the carbon exchange, domestic and international crediting mechanisms (Article 6.2 and 6.4 of the Paris Agreement), and the IT-based registry — that will ensure transparency and proper oversight.

Pilot ETS Phase – 2025 to 2028

The pilot phase will target carbon-intensive sectors like steel, cement, and coal-fired power. Participants will receive emissions allowances and can trade Certified Carbon Credits (CCCs) sourced domestically or through global mechanisms like the CDM and JCM.

Full Implementation – from 2029

The carbon market will become fully operational, with the Hanoi Stock Exchange managing the trading platform. Additional sectors will be included, and emissions allowances may be auctioned, similar to mechanisms in mature markets.

What Decree 119 Adds to the Roadmap since Vietnam launch national carbon market 2025

• Allowance Allocation

Emissions quotas will be assigned to high-emitting sectors starting in 2025. These are calculated based on emission intensity, sectoral growth, and abatement potential.

• Trading Rules

Facilities can bank or transfer unused allowances, borrow up to 15% from future allocations, and face penalties for shortfalls.

• Carbon Credit Recognition

Credits generated from 2021 onward — including CDM and voluntary projects — are eligible for trading if registered under approved methodologies.

• International Participation

Vietnam legally enables bilateral trading (Article 6.2) and project-level participation under the UN-supervised Article 6.4 mechanism. Credit transfers abroad require approval to avoid double-counting against Vietnam’s NDC.

Implications for Business & Climate Investment

Market Incentives for Decarbonization

Companies will have financial and reputational reasons to innovate and reduce emissions.

Attractive Climate Investment Landscape

With regulatory certainty on the horizon, Vietnam could become a destination for carbon finance in nature-based solutions and clean technologies.

Regional Synergy

This aligns with broader shifts across ASEAN and enhances cross-border learning for integrated carbon markets.

Summarize from Vietnam Launch National Carbon Market by 2029

Vietnam’s carbon market roadmap is strengthened by Decree 119 that represents more than just policy reform. It is a strategic, enforceable shift to future-proof the country’s climate economy and elevate its role in global carbon markets.

At Carbon Tide, we’ll continue to monitor these developments closely, not just to observe, but to engage where we can create real impact.

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