Việt Nam ready for the launch of the first domestic carbon exchange on June 29

Việt Nam ready for the launch of the first domestic carbon exchange on June 29

Việt Nam has completed preparations to launch its first domestic carbon exchange on June 29, marking a key step in the country's efforts to develop a carbon market and support its greenhouse gas emissions reduction commitments.

Mangrove forests and restored coral reefs in Côn Đảo Island help expand natural carbon sinks while protecting coastlines from erosion and providing habitats for marine life. Việt Nam has completed preparations to launch its first domestic carbon exchange on June 29. — VNA/VNS Photo Huỳnh Sơn

The legal framework, trading regulations, information technology infrastructure, settlement mechanism and tradable assets have been put in place, according to the Ministry of Finance and the State Securities Commission (SSC).

All key operational components prepared by the Vietnam Exchange (VNX), the Hanoi Stock Exchange (HNX) and the Vietnam Securities Depository and Clearing Corporation (VSDC) have now been completed to ensure the platform is ready to begin operations as scheduled, SSC said.

The Ministry of Finance has issued regulations governing market supervision and reporting requirements, while the SSC has instructed the market operators to finalise operational rules for trading, clearing and settlement.

The Ministry of Agriculture and Environment has allocated pilot greenhouse gas emission quotas to 110 facilities. The ministry has also introduced regulations governing the National Registration System for greenhouse gas emission allowances and carbon credits to provide the basis for managing and trading carbon assets.

The Department of Climate Change, VNX, HNX and VSDC have signed a cooperation agreement on data exchange, information reconciliation and incident management during market operations.

The trading platform at HNX, the clearing and settlement system at VSDC and the national registry have been fully upgraded and tested through internal and market-wide trials conducted in May and June. Authorities said the systems operated smoothly and met operational requirements.

The SSC has also selected a settlement bank for the carbon exchange while the Ministry of Finance has organised training programmes and workshops to familiarise prospective market participants with the legal framework and trading procedures.

The Ministry of Finance in coordination with the Ministry of Agriculture and Environment will officially launch the domestic carbon exchange on June 29.

The launch of the domestic carbon exchange is expected to accelerate the development of Việt Nam's carbon market, support the country's international climate commitments, promote the transition to a low-carbon economy and provide businesses with a market-based tool to achieve sustainable development goals.

It is estimated that the country could generate about US$1.9 billion a year, equivalent to around 0.3 per cent of GDP, by selling carbon credits on international markets if prices reach $47 per credit.

At carbon prices of $33.8 and $20.5 per credit, annual revenue is estimated at about $1.2 billion and $600 million, respectively. A transaction fee of 2 per cent of revenue could also contribute about $10.4 million annually to the State budget.

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