Vietnam’s Carbon Market Could Attract International Green Funding
Vietnam’s carbon trading platform recorded transactions totaling 1,310 metric tons of CO2 equivalent in nearly five months of operation. The head of a UN project services agency energy transition program says carbon pricing could encourage businesses to invest in emissions reductions and help projects access international green funding.
Vietnam’s carbon market could attract international green funding for emissions reduction projects. At an event promoting the development of Vietnam’s carbon market on November 13, John Robert Cotton, head of the Southeast Asia Energy Transition Partnership (ETP) under the United Nations Office for Project Services, said the carbon market could serve as a financial tool to support Vietnam’s net zero emissions goal.
John Robert Cotton said achieving net zero emissions by 2050 would require substantial investment beyond the government budget. Carbon pricing puts the cost of emissions on companies’ books, prompting them to treat emissions reductions as investment decisions. Auctions of emissions allowances, expected to begin in 2029, could also generate additional government revenue to support industrial emissions reductions; mechanisms under Article 6 of the Paris Agreement offer projects opportunities to access international green funding.
Bùi Đức Hiếu, deputy director of Vietnam’s Department of Climate Change, said the carbon market should encourage businesses to upgrade technology, improve energy efficiency and invest in emissions reductions. Since Vietnam’s carbon trading platform began operating on June 29, transactions have totaled 1,310 metric tons of CO2 equivalent in nearly five months. The government approved a total emissions allowance of 511 million metric tons of CO2 equivalent for 2025–2026, allocated to 110 facilities in the thermal power, steel and cement sectors.
Vietnam’s pilot greenhouse gas emissions allowance trading system is expected to run through the end of 2028. Bùi Đức Hiếu said the country still needs to improve its emissions measurement, reporting and verification system during the pilot and strengthen businesses’ capacity to participate. At a side event of the COP31 UN climate conference, the United Nations Development Programme launched a Vietnam carbon market information portal that makes information on policies, allowances, carbon credits and trading publicly available.
Source: VietVance
