The Environmental Protection Law of Vietnam (2020) mandates the establishment of a domestic carbon market, encompassing the trading of greenhouse gas (GHG) emission allowances and carbon credits through an Emission Trading Scheme (ETS), along with participation in the global carbon market. Decree No. 06/2022/ND-CP further outlines Vietnam's plan to develop regulations governing the ETS and carbon credit management, initiating pilot trading from 2025 to 2027, and regulating integration into regional and international carbon markets from 2028 onwards.
This technical assistance aims at supporting the Ministry of Natural Resources and Environment (MONRE) to develop an effective mechanism to govern carbon credits and GHG emission allowance in Vietnam and to evaluate potential impacts of different governance options on the carbon market. An effective governance of carbon credits and GHG emission allowances is crucial for Vietnam to achieve its Nationally Determined Contributions (NDC) targets, aligning with the Paris Agreement and encouraging local investment in GHG emission reduction solutions.