Vietnam rolls out first legal framework for cross-border carbon credit trading

Vietnam rolls out first legal framework for cross-border carbon credit trading

Vietnam has, for the first time, introduced a legal framework governing the international exchange of greenhouse gas emission reduction results and carbon credits.

Under Decree No.112/2026/ND-CP, dated April 1, 2026, projects such as offshore wind power, carbon capture technologies, and green hydrogen production may sell up to 90 per cent of the carbon credits they generate.

The decree sets out fundamental principles for international carbon credit exchange activities. These must align with the Paris Agreement while supporting emission reduction technology transfer, enhancing corporate competitiveness, and contributing to Vietnam’s transition towards a low-carbon economy.

The regulation also prioritises fulfilling Vietnam’s emission reduction targets under its Nationally Determined Contribution, alongside relevant international commitments. National interests are emphasised, alongside the need to balance stakeholder benefits and ensure sustainable development in local project areas.

Notably, all international exchanges must be recorded and publicly disclosed on Vietnam’s national registry system. This requirement is designed to ensure transparency, prevent double counting, and support emissions monitoring and inventory efforts.

The decree clarifies regulatory authority, assigning the Ministry of Agriculture and Environment responsibility for approving international transfers after emission reductions or carbon credits have been issued. Credits that have been revoked or expired are not eligible for transfer.

For transferred emission reduction results, corresponding adjustments between Vietnam and partner countries must comply with the Paris Agreement to avoid double counting in emissions accounting.

The sale of emission reduction outcomes and carbon credits from public investment programmes and projects requires consultation with relevant line ministries, the Ministry of Agriculture and Environment, the Ministry of Public Security, and other related agencies. These bodies must provide written feedback within 15 working days of receiving requests.

Revenue generated from carbon credit transactions under public-private partnership (PPP) projects will be recognised as project revenue and managed in accordance with regulations. For existing PPP projects, contracts and financial plans may be adjusted to incorporate carbon credit exchange activities.

Meanwhile, proceeds from the sale of emission reduction results and carbon credits derived from public investment programmes and projects will be treated as state budget revenue and managed in line with public finance regulations.

Vietnam has set a target of achieving net-zero emissions by 2050. While the Law on Environmental Protection 2020 laid the groundwork for a domestic carbon market, specific provisions governing international exchanges had remained absent.

According to the revised Power Development Plan VIII, offshore wind capacity is expected to reach around 6,000MW by 2030 and 17,000MW by 2035.

VIR