Carbon market emerges as catalyst for business competitiveness

Carbon market emerges as catalyst for business competitiveness

A carbon market forum in Hanoi has heard that Vietnam’s 2050 net-zero goal is not only attainable with strong domestic and international collaboration, but also a strategic gateway to boost national competitiveness and deepen global partnerships.

On April 10, the Department of Climate Change under the Ministry of Agriculture and Environment (MoAE), in collaboration with the Swiss Agency for Development and Cooperation and the International Finance Corporation (IFC), co-hosted the 2025 Vietnam Carbon Market Forum.

Dr. Tang The Cuong, director general of the Department of Climate Change at MoAE, emphasised that Vietnam’s commitment to achieving net-zero emissions by 2050 is an ambitious yet attainable goal. However, he stressed that this will require a much more robust energy transition, the development of low-emission technologies, and a comprehensive suite of other actions.

Dr. Tang The Cuong, director general of the Department of Climate Change at MoAE speech at the forum. Photo: IFC

“Building and developing a carbon market is a strategic step towards green growth and achieving net-zero,” added Cuong. “However, to ensure its effectiveness, Vietnam must swiftly complete its legal framework, issue a decree on the carbon exchange, set standards for carbon credits, and invest in training a high-quality workforce in this sector.”

In January, Vietnam's plan for establishing and developing Vietnam’s carbon market was approved, with the roadmap outlining three key phases.

The first, before June, focuses on developing the legal framework and technical infrastructure; the second, from June to the end of 2028, involves piloting the market mechanism; and the final phase, starting in 2029, will see the market operating at a national scale.

To effectively implement the plan, the MoAE is working closely with the Ministry of Finance to draft a decree on the domestic carbon exchange platform, as well as regulations governing international carbon trading under the Paris Agreement framework.

Simultaneously, efforts to promote the voluntary carbon market are accelerating, aiming to encourage proactive participation from the private sector. Many businesses, particularly in green finance and sustainable projects, have begun to engage actively in this area.

Representing the international research community, Elvira Morella, country advisory and economics manager at the IFC, underscored the critical role of the private sector in innovation and sustainable practices as Vietnam advances towards its 2050 net-zero target.

"There are three essential factors for an effective carbon market. First is ensuring environmental integrity by developing and implementing a robust monitoring, reporting, and verification system to accurately track greenhouse gas emissions,” she said.

“The second aspect is establishing a clear legal framework aligned with international standards to build market confidence and attract participants, and the third is enhancing capacity and encouraging stakeholder engagement to ensure all parties understand the market’s mechanisms and their roles within it.”

Through close collaboration, knowledge-sharing, and bold action, Vietnam can build a strong carbon market that benefits both the economy and the environment, Morella added.

Elvira Morella, country advisory and economics manager at IFC. Photo: IFC

At the forum, the IFC reaffirmed its commitment to supporting Vietnam on this critical journey. Alongside the World Bank Group, it aims to scale up its climate programme in Vietnam through direct financing and by catalysing private investment into green projects and climate-related capital flows.

“We hope to continue supporting Vietnam in developing its green standards and policies, and most importantly, encouraging greater private sector participation in the carbon market,” added Morella.

Sibylle Bachmann, head of Cooperation at the Embassy of Switzerland in Vietnam, stressed the importance of active private sector engagement for a functional carbon market.

Citing Switzerland’s experience, Bachmann noted that her country, highly industrialised and equipped with a comprehensive climate change legal framework, has achieved significant progress through strong international cooperation.

Switzerland has committed to achieving net-zero emissions by 2050 and completed its first international carbon credit transaction under Article 6 of the Paris Agreement, with Bachmann highlighting the nation’s partnerships with low- and middle-income countries, including Vietnam.

“With the goal of promoting a green economy, climate finance will remain a core priority in our cooperation with Vietnam from now to 2028. Switzerland is committed to supporting Vietnam in reaching net-zero. We expect Vietnamese enterprises to take proactive, innovative steps towards building a transparent carbon market that translates global climate goals into meaningful action,” added Bachmann.

Sibylle Bachmann, head of Cooperation at Embassy of Switzerland in Vietnam. Photo: IFC

Also at the forum, the Department of Climate Change and the IFC released a report on Vietnamese businesses’ readiness to participate in the carbon market, covering rice production, food and beverage processing, livestock, and waste management.

The results indicate that most surveyed businesses recognise that greenhouse gas reduction efforts can be turned into carbon credit projects, offering both environmental benefits and potential revenue.

“Enterprises subject to mandatory greenhouse gas inventories show higher compliance with emissions reporting and verification, while those not under such mandates rely primarily on voluntary initiatives. However, awareness and readiness to engage in the voluntary carbon market remain limited,” said a Department of Climate Change representative.

VIR