On the morning of October 16, 2025, the Forest Carbon Network held webinar titled “Overview of Vietnam’s Carbon Market: Prospects for Forestry Carbon Projects”, attracting more than 200 participants from government agencies, research institutes, enterprises, NGOs, and international organizations. The discussion aimed to share the latest updates on the development of Vietnam’s carbon market, while analyzing the potential, challenges, and outlook for forest carbon credit projects — a field expected to become a key pillar in the country’s emission reduction strategy.
1. Overview of the Carbon Market
On the first section of the webinar, speakers shared foundational concepts on carbon pricing — a tool considered key to the transition toward a low-emission economy. Three main mechanisms were presented: the Emissions Trading System (ETS), carbon tax, and carbon credit mechanisms. The speakers emphasized that while the ETS controls the volume of emissions and the carbon tax regulates the price of emissions, the carbon credit mechanism provides incentives and recognition for activities that remove or reduce emissions through specific projects.
A noteworthy point highlighted during the session was the distinction between carbon credits and emission allowances. While allowances represent the right to emit one ton of CO₂ within a compliance system, carbon credits reflect actual reductions or removals of emissions that can be traded on voluntary markets or used for offsetting. Understanding this distinction is essential as Vietnam develops and pilots its domestic carbon market.
According to Decree No. 119/2025/NĐ-CP, Vietnam has set out a roadmap to develop the infrastructure and operate its national carbon market in three phases:
Phases
Time
Objectives
Preparation and piloting
Until June 2025
Develop infrastructure, pilot a domestic carbon trading platform, finalize the legal framework, and strengthen the capacity of government agencies and enterprises.
Trial operation
2025–2028
Pilot the greenhouse gas (GHG) emission allowance trading system in three sectors: steel, cement, and thermal power. Approximately 200 enterprises are expected to participate, with 100% of allowances allocated free of charge. Up to 30% of carbon credits may be used for offsetting.
Official operation
After 2029
Officially operate the national carbon trading platform, complete the legal and infrastructural framework, and strengthen management capacity and public awareness.
Simultaneously, the State Securities Commission, the Hanoi Stock Exchange, and the Ministry of Finance are coordinating to establish a carbon credit trading floor.
2. Forestry – A Pioneering Sector with Great Potential
In the next segment, speakers focused their analysis on the opportunities and challenges in implementing forest carbon credit projects, regarding this as a strategic step in Vietnam's green transition roadmap.
According to Ms. Nguyen Hong Loan (GreenCIC), Vietnam's forest credit projects are currently in the startup phase. GreenCIC has implemented activities primarily in Tuyen Quang and Thua Thien Hue within the framework of the Partnerships for Carbon Markets Program (DFAT, Australia). These two projects—one following the ARR mechanism (Gold Standard) and the other IFM (Verra VCS)—have completed feasibility assessments, signed Memoranda of Understanding (MoU) with the local Department of Agriculture and Rural Development (DARD) and are in the process of finalizing their MRV dossiers. However, Ms. Loan stated that the projects cannot yet issue credits due to a "lack of comprehensive legal regulations on carbon project registration and credit trading, carbon ownership, and benefit-sharing mechanisms."
She also pointed out that although Vietnam’s credit potential is substantial, the actual issuance rate of eligible credits is often lower than anticipated. This is attributed to stringent international standards demanding rigor in additionality, transparency, and independent monitoring. Completing the national MRV framework, along with an integrated forest data system, is considered key to enhancing credit quality and building market confidence.
3. A Voice from the Locality – Realities in Tuyen Quang
During the discussion, Mr. Trieu Dang Khoa, Deputy Head of the Provincial Forest Protection Department in Tuyen Quang province, shared the practical results and difficulties.
Tuyen Quang currently possesses over one million hectares of forestry land, nearly 900,000 hectares of which is covered by forest, comprising 600,000 hectares of natural forest and 300,000 hectares of planted forest. Mr. Khoa stated that over 50% of the forest area is currently managed by Commune People's Committees. This poses a major challenge in identifying the subject that owns the carbon rights and in implementing community-level project models.
Tuyen Quang province proactively issued Resolution No. 36-NQ/TU on June 26, 2021, from the Provincial Party Committee Executive Board on a plan to reduce greenhouse gas emissions. The province has coordinated with several organizations, including GreenCIC, KOICA, and VNEEC, to conduct feasibility studies, while simultaneously signing MoUs with four forestry companies (covering a total area of over 1,200 hectares of planted forest). However, Mr. Khoa observed: “We have forests and models ready to participate in the market, but we still lack a legal framework for carbon projects and credit issuance. There are no specific guiding documents on ownership rights, credit valuation, and benefit-sharing mechanisms. Provinces like ours urgently need technical, financial, and institutional support to move into substance.”
This statement received widespread agreement from delegates, reflecting a common reality: localities are ready, but the legal policy and institutional framework for implementing forest carbon projects must be finalized.
4. Expert Perspective – Finalizing the Legal Framework for Forest Carbon
Associate Professor Dr. Nguyen Ba Ngai, former Deputy Director General of the Vietnam Administration of Forestry, emphasized that the development of forest carbon credit projects must be viewed as a genuine form of investment, compliant with the Investment Law and the Land Law, rather than solely an environmental activity. According to him, Vietnam currently has "only a few projects with real carbon commodities," such as the North Central ERPA (Emission Reductions Payment Agreement); other activities and projects have only addressed issues related to capacity building, promoting stakeholder participation, and so on.
Associate Professor Dr. Nguyen Ba Ngai also shared with the delegates about the Draft Decree on Forest Carbon Absorption and Storage Services, which is currently being prepared by the Ministry of Agriculture and Environment. He noted that this will be the first legal document to clearly define the concept of a "forest carbon project," regulating the process from project development, appraisal, approval, issuance, and transfer of credits, as well as the principles for benefit-sharing among the State, enterprises, and local communities.
5. Policy Discussion – Opportunities and Direction
The Vietnamese carbon market is at a nascent stage, presenting great opportunities alongside significant hurdles. Delegates agreed that transforming this potential into tangible value requires synchronizing the following solutions:
- Finalize the legal framework for forest carbon, clearly defining the establishment, registration, and deployment of forest carbon projects, ownership rights, and benefit-sharing mechanisms.
- Develop a national MRV (Measurement, Reporting, and Verification) system that integrates forest data, PFES (Policy on Forest Environment Service Fees), and REDD+ (Reducing Emissions from Deforestation and Forest Degradation).
- Establish a domestic carbon trading floor that operates securely and transparently, building confidence for businesses and investors.
- Enhance local capacity, particularly in technical MRV, credit valuation, and credit management.
The webinar on October 16, 2025, offered a clearer picture of the progress in forming Vietnam's carbon market, with the forestry sector playing a pioneering role. The synergy between the central policy framework and local realities, such as in Tuyen Quang, is a crucial factor for establishing a functional market.
If the legal corridor and technical infrastructure are completed during the 2025–2028 period, Vietnam could soon become one of the region's operational carbon market nations, making an important contribution to the goal of achieving net-zero emissions by 2050.
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