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COVER STORY

A size that suits

It is crucial to identify an appropriate size for the carbon market
Vietnam will pilot in 2025 and officially operate by 2028

By HUONG LOAN

survey conducted by the Energy the formation of a carbon market, and 2027, when a carbon credit transaction
and Environment Consulting JSC Decree No. 06/2022/ND-CP from 2022 floor will be set up and operating, and
A (VNEEC) on 537 Vietnamese busi- on the mitigation of greenhouse gas emis- official operations from 2028.
nesses in the field of industry and trade, sions and the protection of the ozone layer, The three main subjects involved in a
construction, waste treatment, and transport which provides detailed regulations on carbon market in Vietnam are: (i) domestic
nationwide with emissions estimated at reducing greenhouse gas emissions and organizations participating voluntarily;
over 10,000 tons of carbon dioxide equiva- forming and developing a carbon market. (ii) facilities with greenhouse gas emissions
lent, found that the proportion of those to In addition, Decision No. 01/2022/QD- that are required to conduct greenhouse
have conducted greenhouse gas inventories TTg from the Prime Minister promulgated gas inventories, such as power plants,
stood at over 35 per cent, while 57.38 per a list of fields and facilities emitting green- industrial production facilities, cargo trans-
cent had not yet formulated plans to reduce house gases that were required to conduct portation companies, commercial buildings
emissions and only some 28 per cent had inventories, and a list of participants in with a total amount of energy consumption
already established such plans. the carbon market. The Decision is updated exceeding 1,000 tons of oil equivalent,
In particular, over half had heard every two years. There were initially 1,912 and solid waste treatment facilities with
about Vietnam’s Emission Trading System businesses obliged to report on their green- a capacity of over 65,000 tons; and (iii)
(ETS) and the carbon market but lacked house gas inventories, with the figure esti- other individuals and organizations who
knowledge about the fundamental oper- mated to increase to nearly 3,000 this year. engage in investment and business activ-
ating principles, while a few were com- Vietnam has also developed tools for ities in the field of carbon credit trading.
pletely unaware of ETS and the carbon managing greenhouse gas emissions, In order to effectively implement the
market and just 1.27 per cent understood including the ETS and a mechanism for roadmap, Ms. Hanh proposed selecting
how they operated. calculating carbon credits, which will be a plan for the pilot phase and designing
piloted in 2025-2027, as well as non- an ETS while issuing related legal docu-
Historical data for the pilot market tools such as regulations for the ments, including defining and allocating
Ms. Dang Hong Hanh, Team Leader, direct control of emissions, technology the greenhouse gas emissions quota.
Climate Change Policy Expert, Co-Founder, and financial support, and support in Pilot activities are to be carried out in
and Executive Director of VNEEC, said capacity improvements. 2025 and 2026 together with preparing
Vietnam’s carbon market is regulated by Under regulations, the development full ETS designs and issuing additional
various legal documents, including the roadmap for a carbon market in Vietnam legal documents for the pilot phase and
Law on Environmental Protection 2020, includes a preparatory period from 2021- ETS design. The ETS will be in full oper-
which creates a basic legal framework for 2024, pilot implementation from 2025- ations from 2028.

8 Vietnam Economic Times April 2024 en.vneconomy.vn