Vietnam Emissions Trading Scheme (ETS) and Carbon Credit Market
ENFORCEMENT TIMELINE
Pilot launched 2025
Overview
Aiming to achieve carbon neutrality by 2050, the Vietnamese government is developing a domestic Emissions Trading Scheme (ETS) and carbon credit trading market under Article 91 of the amended Law on Environmental Protection (LEP 2020) and Decree No. 06/2022/ND-CP.
The scheme primarily targets specific energy-intensive industries (such as steel, cement, and coal-fired power), and aims to move from a pilot phase starting in 2025 to full operation of an official carbon credit trading market in 2028. With support from international organisations including the World Bank, the free and paid allocation of greenhouse gas emission allowances and the establishment of trading mechanisms are being developed.
Enforcement Timeline
January 2022: Law on Environmental Protection (enacted in 2020) took effect, establishing the legal framework for GHG emission reduction obligations.
2024–2025: Submission of GHG emissions inventory reports and development of verification processes.
2026: Pilot operation of the carbon credit trading market begins.
2028: Full-scale operation of the carbon credit trading market and application of emissions trading.
Business Impact
Japanese companies with production bases in Vietnam, particularly in steel, chemicals, and energy-related sectors, need to strengthen their greenhouse gas measurement capabilities (MRV systems) at an early stage. Capital investment planning and the adoption of energy-saving technologies that account for future emission allowance allocation and carbon pricing impacts are essential.