Domestic carbon exchange to be launched in May

HÀ NỘI — Việt Nam is set to officially put its domestic carbon exchange into operation in May, marking a key milestone in the country's efforts to build a market-based mechanism for greenhouse gas mitigation and carbon pricing.The timeline was confirmed at a conference on implementing the legal framework and operational guidelines for the carbon exchange, organised by the State Securities Commission on March 30.The launch follows the Government's issuance of Decree No. 19/2026/NĐ-CP, which establishes a regulatory foundation for the domestic carbon trading platform.According to officials, the exchange will facilitate trading of both greenhouse gas emission allowances and carbon credits, creating a centralised marketplace designed to support price discovery and enhance transparency.The platform will be operated by institutions within the securities sector, leveraging existing infrastructure and technical expertise to accelerate implementation and ensure operational efficiency.Under the new framework, the Hanoi Stock Exchange (HNX) will be responsible for operating the carbon exchange, while the Vietnam Securities Depository and Clearing Corporation (VSDC) will provide custody and settlement services for traded instruments.This integration with the securities ecosystem is intended to optimise technological capacity and human resources, while reducing costs and shortening preparation time for market launch.Authorities emphasised that aligning the carbon exchange with established financial market institutions will help ensure a transparent, fair and secure trading environment. The centralised model is expected to support effective transaction execution while maintaining oversight and regulatory control.Speaking at the conference, Đỗ Thanh Lâm, a representative from the Legal Department at the Ministry of Finance, said that the carbon exchange aims to establish an effective pricing mechanism and a transparent and fair trading system, and to offer economic incentives for emissions reduction and investment in environmentally friendly technologies.Meanwhile, the Ministry of Agriculture and Rural Development's Climate Change Department said the pilot phase will allocate emissions quotas to 110 large emitters in sectors such as steel, cement and thermal power.Enterprises will be allocated quotas, said Nguyễn Thành Công, deputy head of the Carbon Market Division under the Climate Change Department. If they emit more than their quota, they must purchase additional allowances, which means paying. If they reduce emissions or save energy, they can sell surplus allowances.Tradable instruments on the exchange will include both emission allowances and carbon credits. Carbon credits are certificates representing the right to emit one tonne of CO2 or CO2-equivalent (tCO2e) and are issued to reflect emissions reductions from verified mitigation activities. Participants who hold credits can trade them in the marketplace.Experts highlighted Việt Nam's potential supply of carbon credits, particularly from agriculture and forestry. The country has significant potential in carbon credit supply. By the agriculture sector alone, credits could reach an estimated 57 million per year.Việt Nam has experience in the voluntary carbon market and has completed several transactions in recent years, securing nearly US$60 million in carbon credit sales through various programmes.The Biogas Programme in the livestock sector has constructed more than 181,000 biogas digesters nationwide, benefiting about 1 million rural households and generating over 3 million carbon credits, which yielded $8.1 million in revenue.In 2023, the forestry sector reportedly sold 10.3 million forest carbon credits through the World Bank, raising about $51.5 million. — BIZHUB/VNS