Vietnam has introduced a comprehensive legal and institutional framework for its domestic carbon market, integrating the trading of carbon credits and greenhouse gas emission quotas with the country's existing securities infrastructure.
The move is intended to improve transparency, efficiency and market participation as Vietnam prepares to roll out pilot operations.
Under Decree 29/2026/ND-CP, issued on January 19, the government has laid out the regulatory architecture governing the operation of a domestic carbon trading exchange. The decree marks a significant transition from policy planning to implementation under Vietnam's broader climate and emissions reduction strategy.
The new framework details how greenhouse gas emission quotas and carbon credits will be registered, transferred, custodied and traded. Companies and other regulated entities will conduct carbon transactions through securities accounts opened with licensed brokerage firms, mirroring the systems used in Vietnam's stock markets.
To participate, entities must open a dedicated carbon trading account that is separate from other financial trading accounts. These accounts will be used solely for transactions involving emission quotas and carbon credits, reinforcing a structure designed to align with existing accounting and settlement mechanisms in the securities sector.
Trades executed on the carbon market will be published at the end of each trading day by the Hanoi Stock Exchange (HNX), while custodial and clearing functions will be supported by the Vietnam Securities Depository and Clearing Corporation (VSDC).
The decree specifies that carbon trading will operate independently from other market activities, with real-time settlement based on sufficient holdings of credits or quotas and corresponding funds, without the use of central counterparty clearing.
By anchoring carbon transactions within regulated securities infrastructure, the Government aims to reduce operational risks and leverage established technological and supervisory capabilities. Securities firms are required to display carbon trading instruments separately on their platforms and maintain distinct records for carbon credits and related funds.
Before any greenhouse gas quota or carbon credit can be traded, it must be registered with the national registry managed by the Ministry of Agriculture and Environment and assigned a unique identification code. This code serves as the definitive reference for custody and trading and is shared with both the VSDC and HNX upon registration.
The decree also places responsibility on market participants to ensure compliance with trading rules. Sellers must hold sufficient quotas or credits before placing orders, while buyers must have adequate funds in their accounts. Securities members are tasked with daily monitoring of balances and ensuring the accuracy of submitted orders.
Vietnam's carbon trading exchange will operate under a pilot regime until December 31, 2028. During this period, no service fees will be charged by exchange operators. From January 1, 2029, fees will be introduced in line with prevailing regulations.
The pilot phase is designed to help participants familiarise themselves with specialised trading protocols, account structures and settlement processes that differ from conventional securities markets. This gradual approach supports the Government's roadmap towards a fully functional nationwide carbon market and potential future integration with international carbon mechanisms.
As of August 2025, Vietnam's national registry had issued more than 30 million carbon credits from 158 voluntary market projects, with projections indicating this could reach around 70 million by 2030. Domestic demand for credits is also increasing, particularly in sectors such as aviation, which require substantial offsets each year.
By embedding carbon trading within established financial market infrastructure, Vietnam aims to generate transparent price signals that encourage cost-effective emissions reductions and drive investment in low-carbon technologies, reinforcing its commitment to market-based climate mitigation policies.
