Vietnam has officially launched its domestic carbon exchange, a joint effort by the Ministry of Finance and the Ministry of Agriculture and Environment. The government approved a pilot cap of 511 million tonnes of CO2 equivalent for 110 facilities in high emitting sectors like thermal power, cement, and steel for the 2025-2026 period. The market uses a cap-and-trade mechanism where businesses that exceed their allowances must buy credits or offsets, while those that cut emissions can sell surplus allowances. Experts say the market's success depends on a transparent measurement, reporting and verification (MRV) system. Currently, Vietnam has about 116 carbon projects in development, with annual credit issuance estimated at 10.7 million credits, but most are still sold internationally. Legal recognition of carbon credits as property rights and better digital infrastructure are needed to lower compliance costs for small and medium enterprises. The article also notes that a transparent domestic market could help Vietnamese exporters adapt to the EU's Carbon Border Adjustment Mechanism.
