Vietnam is moving its carbon market from policy talk to a pilot. The government issued Decree 29/2026 to set up a domestic carbon exchange, with an initial pilot covering more than 511 million tons of CO2 from thermal power, iron and steel, and cement for 2025-2026. The pilot runs through 2028, and mandatory trading starts in 2029. BIDV is the sole settlement bank during the pilot. State Bank Deputy Governor Nguyen Ngoc Canh made the case that the carbon market should not be treated as a separate experiment. Emission reductions that are measured and traded can become cash flow for companies, which in turn improves their credit quality and lowers reliance on bank loans. That is a useful framing, because green credit alone is not enough to fund Vietnam's net zero target. Context worth noting: green credit outstanding reached VND 856 trillion by June 2026, up 9.87% from end-2025, with agriculture, forestry and fisheries at 31% and green energy at 28%. The real test is whether the pilot can produce verified, tradeable credits and whether settlement banks and verification systems can handle it.
