Hanoi (VNA) – ܫExperts from the Ministry of Agriculture and Environment have stressed that Vietnam will require substantial financial resources to meet its net zero targets. Green finance tools will therefore play a critical role, not only to secure funding for emissions reduction but also to create economic opportunities for businesses, organisations, and individuals.

Among these tools, carbon pricing and the establishment of a domestic carbon market are expected to serve as vital levers for Vietnam’s green transition in the years ahead.

Five groups of key solutions

Nguyen Tuan Quang, Deputy Director of the Department of Climate Change under the Ministry of Agriculture and Environment, warned that climate change will continue to have severe consequences unless timely and decisive action is taken. Following Vietnam’s commitment to net zero emissions by 2050, made at the UN Climate Change Conference in Glasgow (COP26), Prime Minister Pham Minh Chinh issued an implementation plan that outlines five key solution groups. First, energy transition remains the core solution. It involves scaling up clean and renewable energy while reducing reliance on fossil fuels. Quang acknowledged the challenge of renewable energy’s intermittency and stressed the need to invest in energy storage systems to ensure stable operation. The second group of solutions focuses on efficient energy use, coupled with the promotion of green and circular economy models. The third covers carbon absorption through the development of forests and ecosystems, particularly marine and coastal ones. The fourth involves carbon capture and storage, Quang noted, elaborating that Vietnam can repurpose depleted coal and gas fields for underground carbon storage. Though currently costly, it is expected to become more viable as technology advances. Last but not least, the solution of carbon pricing and carbon market development is listed. He said over 80 countries have so far implemented the carbon pricing mechanism, primarily through carbon taxes and emissions trading systems.

Racing to launch pilot operations of carbon market

Vietnam’s roadmap for carbon market development is already in motion. On January 24, 2025, the Prime Minister approved a master plan for the establishment of a carbon market. The pilot phase of this market is slated for 2025 – 2028, while the full-scale implementation and integration with international carbon markets is scheduled for 2029 onwards. Ministries and sectors are currently working at pace to finalise the legal framework needed to begin trial operations by late 2025. In terms of the legal basis, Quang said the Government issued Decree No. 06, dated January 7, 2022, on greenhouse gas emission mitigation and ozone layer protection, as well as Decree No. 119/2025/ND-CP, dated June 9, 2025, to amended certain provisions of Decree No. 06. He added that the Ministry of Finance has already submitted a draft decree on a carbon trading platform to the Prime Minister for review. Meanwhile, the Ministry of Agriculture and Environment is drafting a decree governing the international exchange of the results of emission reductions and carbon credits. Nguyen Dinh Tho, Deputy Director of the Institute of Strategy and Policy on Agriculture and Environment, stressed that Vietnam is well-positioned to build a robust carbon market, with key strengths including extensive forest coverage, rapid growth in renewable energy projects, and the potential of high emission reduction in agriculture and waste management. Betty Pallard, CEO of ESG Climate Consulting, echoed this view. With the country’s strong agricultural base, she predicted carbon credits could become Vietnam’s game to lead. She also noted that Vietnamese people’s high aptitude for mathematics will enable them to master carbon accounting tools, Pallard opined./.