Legal framework for the carbon market in Vietnam

Abstract

Vietnam has committed to reducing greenhouse gas emissions under the Paris Agreement and achieving net-zero emissions by 2050. To realize this goal, establishing a legal framework for the carbon market is an urgent task, as it provides an economic instrument to promote emission reductions and mobilize green finance. Vietnam has already developed an initial legal foundation, including the Law on Environmental protection (2020), Decree No. 06/2022/ND-CP, Decree No. 119/2025/ND-CP, and Decision No. 232/QD-TTg. However, detailed regulations regarding trading mechanisms, carbon pricing, ownership rights, and market monitoring systems remain incomplete. In practice, international experience from China and the European Union Emissions Trading System (EU ETS) demonstrates that national emissions trading systems can be effective when supported by transparent regulations and strong enforcement mechanisms. For sustainable development, Vietnam needs to establish a unified national authority responsible for carbon market management, refine mechanisms for the ownership and benefit-sharing of forest carbon credits, develop a national MRV (Measurement, Reporting, and Verification) system, and apply digital technologies such as blockchain to carbon credit registries. In addition, it is necessary to link the carbon market with green finance instruments, introduce tax incentives, and support enterprises in adopting low-carbon technologies. These measures would help ensure that the carbon market operates transparently, fairly, and in alignment with international standards.