Legal ecosystem being completed carbon credit trading exchange

Legal ecosystem being completed carbon credit trading exchange

State management authorities are eager to complete the legal framework and necessary conditions for operating a carbon credit trading exchange, aiming to start pilot operation this year.

The Ministry of Finance (MoF) is working diligently to complete all preparatory work, from developing regulations and perfecting the system to testing with market participants. In addition, the Hanoi Stock Exchange and VSDC will coordinate the testing of the system to ensure seamless connectivity for trading participants. It is expected that, if the preparations are completed on schedule, the market could officially operate this year.

“In 2026, the government has issued several legal documents that have created an important legal foundation for the operation of the carbon exchange, marking the transition from the policymaking stage to practical implementation,” Do Thanh Lam, representative of the Legal Department under the MoF, said at a training event organised by the MoF on April 13.

The legal documents mentioned combine Decree No.29/2026/ND-CP on the domestic carbon exchange and Decree No. 112/2026/ND-CP on international exchange of greenhouse gas (GHG) emission reduction results and carbon credits. Circular No. No.11/2026/TT-BNNMT of the Ministry of Agriculture and Environment also regulates the management and operation of the National Registration System for GHG emission quotas and carbon credits.

“The exchange is designed to establish a transparent pricing mechanism that reflects market supply and demand. The operating model is built on the existing infrastructure of the stock market," Lam said. "Entities participating in domestic carbon trading who collude, entice others to buy or sell, use other trading methods, or combine spreading false rumours or providing misleading information to manipulate GHG emission quota prices, will be subject to administrative penalties or criminal prosecution depending on the nature and severity of the violation; if damage is caused, compensation must be paid in accordance with the law,”

According to regulations, the Ministry of Agriculture and Environment (MAE) is responsible for the goods; it presides over the resolution of petitions, complaints, and denunciations, and handles administrative violations related to goods and entities participating in trading on the domestic carbon exchange.

The State Securities Commission is in charge of inspecting trading activities on the domestic carbon exchange; the provision of transaction support services; and inspecting and supervising Vietnam Securities Depository and Clearing Corporation, and the Vietnam Stock Exchange.

Meanwhile, the Hanoi Stock Exchange will resolve petitions, complaints, denunciations, and handle administrative violations in trading activities and the provision of transaction support services on the domestic carbon trading floor in accordance with law regulations.

Regarding traded commodities, Pham Nam Hung, representative of the Carbon Market Division of the Department of Climate Change under the MAE, said, “The Vietnamese carbon market focuses on trading two main types, namely GHG emission quotas and carbon credits. Emission quotas are allocated to large-scale emitters. Currently, a list of 110 facilities in three high-emission sectors – thermal power, iron and steel, and cement – ​​has been identified, with a total allocation of over 500 million tonnes for the period 2025-2026.”

According to the MAE, businesses and investors can develop emission reduction projects to generate credits and participate in trading on the market. Vietnam allows businesses to use carbon credits to offset emissions exceeding their quotas, up to a rate of 30 per cent. This is a difference compared to some international markets, aiming to provide flexibility for businesses during the initial transition phase. In addition, besides businesses allocated quotas, other entities can also participate in carbon credit trading. This mechanism contributes to increasing market liquidity.

“The period from now to 2028 will be a pilot phase, focusing on operating the emission quota mechanism. During this phase, the management agency will simultaneously implement, monitor, evaluate, and gradually refine the mechanism. The database used will be the results of GHG inventories provided by businesses,” Hung said.

Besides refining the policy mechanism, the authorities also organise training programmes to enhance the capacity of businesses and provide them with the knowledge to confidently participate in transactions.

Nguyen Thi Thu Ha, director of the Derivatives Market Department at the Hanoi Stock Exchange, said, “Businesses and organisations wishing to participate in trading are required to have a tax identification number and complete registration on the National Registration System of the MAE.”

Due to leveraging the existing securities infrastructure, trading entities need to have accounts at securities companies and are only allowed to use one securities trading account, Ha added. "They must also have sufficient funds when placing buy orders and sufficient quantities of greenhouse gas emission quotas/carbon credits when placing sell orders. Businesses and organisations can use their existing securities accounts to participate in the exchange; those without an account must open a new one,” Ha said.

The carbon exchange is where transactions involving the exchange of GHG emission quotas and carbon credits take place.

Vu Thi Chau Quynh, deputy director of the Legal Department under the MoF, said, “The carbon exchange is expected to be both an economic tool and a driving force to promote the goal of reducing GHG emissions, towards developing a low-carbon economy. At the same time, the exchange will create a new flow for emission reduction activities, encourage the green transition, develop low-emission technologies, and enhance the competitiveness of Vietnamese businesses.”

VIR