Recently, Vietnam has made significant progress in promoting carbon market development and clean energy growth. From high-level meetings to specific implementation plans, Vietnam has demonstrated its determination and action in addressing climate change and achieving sustainable development goals.
Government Leaders Discuss Carbon Market Development Plan
On August 22, Vietnamese Deputy Prime Minister Tran Hong Ha chaired a meeting to discuss the “Vietnam Carbon Market Development (Draft).” According to the draft, the carbon market will create new financial flows to reduce greenhouse gas emissions, promote green transition, develop low-emission technologies, foster a low-carbon economy, and proactively respond to climate change, contributing to achieving the net-zero emissions target by 2050. From 2025 to 2028, the carbon market will undergo a trial operation nationwide; from 2029, it will officially operate. Vietnam will continue to improve laws and infrastructure to connect the domestic carbon market with regional and global markets. Most greenhouse gas emission allowances will be allocated for free, with the remainder distributed through auctions. Consideration is being given to adding more types of carbon credits for market trading. Simultaneously, Vietnam will continue to improve laws and infrastructure to connect its domestic carbon market with regional and global markets.
Deputy Prime Minister Tran emphasized that Vietnam’s renewable energy and carbon market potential is enormous and highly attractive to investors. He urged relevant departments to adopt flexible, creative, and breakthrough solutions to quickly approach and catch up with global trends. The Deputy Prime Minister pointed out that this is a game of “whoever is fast wins, whoever is smart seizes the opportunity,” and Vietnam must seize the opportunity to transition from lagging behind to catching up and even surpassing others.
Multiple Departments Collaborating to Advance Carbon Market Construction
The Ministry of Finance, Ministry of Natural Resources and Environment, Ministry of Planning and Investment, and other relevant ministries are actively cooperating to determine domestic and international carbon market supply and demand, establish a legal framework for calculating, measuring, and identifying carbon market trading products, laying the foundation for developing operational plans for domestic trading platforms and aligning with international markets.
The Department of Climate Change under the Ministry of Natural Resources and Environment is actively promoting the construction of Vietnam’s compliance carbon market. Currently, Vietnam has 150 projects that have obtained 40.2 million carbon credits, which have been traded on the global market. Multiple departments are guiding enterprises and units to determine the amount of greenhouse gases emitted in their activities, with plans to first implement a compliance carbon market in sectors with high fossil fuel consumption, such as thermal power generation, steel production, and cement production.
Substantial Progress in Clean Energy Development
As one of the countries severely affected by climate change, Vietnam has been making tremendous efforts in addressing climate change, committed to achieving sustainable green development. In December 2023, at the United Nations Climate Change Conference (COP28), Vietnam announced its financing plan for implementing the “Just Energy Transition Partnership (JETP) Political Declaration,” pledging efforts to achieve clean energy development and move towards a net-zero emissions and sustainable development future.
Subsequently, Vietnam established the JETP Implementation Secretariat, headed by the Minister of Natural Resources and Environment, responsible for developing implementation plans for JETP financing and project priority selection principles, as well as mobilizing necessary funds for JETP implementation.
Active Response from Local Governments and Enterprises
At the local level, many provinces and cities have implemented solutions to address climate change in the agricultural sector and called for enterprises to invest in renewable energy projects, especially solar and wind power projects. Several coastal localities have transferred nearshore wind power project sea areas within their authority, including Kien Giang, Bac Lieu, Tra Vinh, Soc Trang, Ben Tre, and Tien Giang provinces.
At the enterprise level, large companies such as Vietnam Oil and Gas Group (PVN), Vietnam National Coal – Mineral Industries Holding Corporation Limited (TKV), and Vietnam National Chemical Group (Vinachem) are actively responding to the government’s call by investing in technology improvements, pollution treatment, waste recycling and utilization, and implementing carbon capture and storage solutions.
Future Outlook
The Vietnamese government has shown strong determination and action in promoting carbon market construction and clean energy development. Through establishing a sound legal framework, promoting technological innovation, strengthening international cooperation, and other means, Vietnam is striving to achieve its ambitious goal of net-zero emissions by 2050. However, challenges remain. Vietnam needs to find a balance between maintaining economic growth and achieving environmental sustainability while also requiring substantial financial support and technological innovation to drive energy transition. The Vietnamese government calls on the international community to strengthen cooperation in jointly addressing the global challenge of climate change.
As Vietnam’s carbon market gradually establishes and the clean energy industry continues to develop, Vietnam is expected to make greater progress in green economic transformation in the coming years, making an important contribution to global climate action. It is evident that Vietnam’s renewable energy and carbon market potential is enormous and highly attractive to investors. Companies are advised to closely monitor Vietnam’s energy economy and green economy. If you are considering investing in Vietnam, planning to expand into the Vietnamese market, or wish to learn more relevant information, please contact our professional consultant Jaycy. We will provide you with detailed market analysis, investment advice, and comprehensive overseas expansion support services.
