The Vietnamese Government issued Decree No. 112/2026/ND-CP on April 1, 2026, regarding the international transfer of greenhouse gas (GHG) emission reductions and carbon credits. The Decree implements Article 139 of the Law on Environmental Protection, gives effect to provisions under the Paris Agreement, and establishes a legal framework for managing international carbon credit transactions.
Decree No. 112 marks a significant step in completing Vietnam’s carbon market framework by opening the way for international exchanges of GHG emission reductions and carbon credits. The new rules are expected to help mobilize international finance, technology, and expertise to support the country’s transition to a low-emissions economy. At the same time, the Decree makes clear that international trading is not intended solely to maximize the commercial value of carbon credits, and must also safeguard national interests and prioritize the achievement of Vietnam’s Nationally Determined Contribution (NDC).
Prioritizing Vietnam’s climate targets
The Decree governs the international transfer of GHG emission reductions and carbon credits under three main frameworks.
The first is cooperation under Article 6.2 of the Paris Agreement. Vietnam may enter into bilateral or multilateral agreements with other Paris Agreement parties or international organizations to establish frameworks for transferring GHG emission reductions and carbon credits. Article 6.2 agreements set out the principles of cooperation, project registration procedures, recognition of emission reductions and carbon credit issuance, applicable crediting standards or methodologies, and procedures for approving international transfers.
The second framework is the Article 6.4 mechanism of the Paris Agreement. This centralized international carbon crediting and offset mechanism operates under the supervision of the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) and succeeds the Clean Development Mechanism (CDM). Project registration, methodology approval, credit issuance, and credit management are carried out in accordance with the international rules and guidance governing Article 6.4.
The third framework covers carbon credits generated under independent carbon standards administered by international organizations. Projects may be registered and issued credits under the procedures established by the relevant standard-setting organizations. However, any Internationally Transferred Mitigation Outcomes (ITMOs) involving corresponding adjustments must still satisfy Vietnam’s legal requirements and receive approval from the country’s competent authorities.
By incorporating all three frameworks, the Decree enables Vietnam to participate flexibly in different forms of international carbon market cooperation while ensuring consistent oversight and alignment with national emission reduction objectives.
A central principle of the Decree is that international transfers must not undermine Vietnam’s NDC or other emission reduction commitments under international agreements. International transactions must comply with the Paris Agreement, promote technology transfer, strengthen business competitiveness, safeguard national interests, and contribute to sustainable local development.
All transfers between Vietnam and international partners must be recorded and disclosed through the National Registry System. This system tracks the origin, status, and intended use of carbon credits, helping prevent double counting while enhancing transparency.
For transfers involving corresponding adjustments, Vietnam must make the necessary adjustments to its national GHG inventory. Emission reductions transferred internationally can no longer be counted toward Vietnam’s NDC but instead contribute to the NDC or other mitigation targets of the receiving party. As a result, approvals for international transfers must balance the benefits of attracting international investment with the need to preserve Vietnam’s ability to meet its own climate commitments.
Transfer limits
The Decree classifies emission reduction activities eligible to become ITMOs with corresponding adjustments into two categories.
The first category includes priority activities, primarily projects involving new or advanced technologies or requiring substantial investment. These projects may transfer up to 90 per cent of emission reductions or carbon credits generated during a crediting period.
The second category covers activities encouraged for international transfer. Projects in this category may transfer up to 50 per cent of their emission reductions or carbon credits with corresponding adjustments.
Where international transfers do not require corresponding adjustments, all programs and projects may transfer up to 90 per cent of their emission reductions or carbon credits. Any remaining credits may be used in Vietnam’s domestic carbon market.
The differentiated transfer limits reflect Vietnam’s cautious policy approach. Projects deploying advanced, capital-intensive technologies that require international support are allowed greater flexibility to transfer credits abroad, while a larger share of credits from activities that directly contribute to Vietnam’s NDC is retained for domestic use.
Project management
For projects developed under Article 6.2, the Decree establishes a management process covering project concept registration, project approval, measurement and verification of emission reductions, issuance or recognition of credits, and authorization for international transfer.
Organizations seeking to develop projects must first submit a project concept to the Ministry of Agriculture and Environment (MAE), which assesses whether the proposal aligns with the list of eligible mitigation activities for international transfer, as well as relevant national, sectoral, and local development strategies and plans.
Once the project concept is approved, the developer submits a formal registration application, including a project design document and validation report prepared under the carbon standard specified in the Article 6.2 agreement. After registration, project participants are responsible for measuring and reporting emission reductions in accordance with the applicable standard. The results must then be independently verified by an entity accredited under either the relevant carbon standard or the Article 6.2 agreement.
Following issuance or recognition of emission reductions or carbon credits and their registration in the National Registry System, the project representative may apply to the MAE for approval to transfer the credits internationally.
For Article 6.4 projects, registration, amendments, credit issuance, and project administration follow the rules and guidance established under the Paris Agreement and the Article 6.4 Supervisory Body.
The MAE reviews each project to ensure consistency with Vietnam’s NDC and national emission reduction objectives. Once the Article 6.4 Supervisory Body approves project registration, the project representative must submit regular implementation reports to the Ministry.
Though carbon credits are issued under the Article 6.4 mechanism, any internationally-transferred credits requiring corresponding adjustments must still receive approval from the MAE. This approach links international governance procedures with Vietnam’s domestic regulatory framework, particularly regarding the impact of credit transfers on the country’s ability to meet its NDC.
For projects using independent carbon standards, the Decree does not automatically recognize every standard or crediting methodology available on the international market. Eligible standards must have transparent governance systems and international recognition, while crediting methodologies must clearly demonstrate additionality, sustainability, measurability, verifiability, and the absence of double counting.
Project registration and carbon credit issuance are carried out under the procedures of the relevant independent carbon standard organization. Project representatives must regularly report implementation progress to both the relevant line ministry and the MAE.
For ITMOs requiring corresponding adjustments, the Ministry will consider only projects using crediting methodologies included on Vietnam’s approved list.
Under the Decree, project developers must prepare complete legal documentation, establish clear ownership of emission reductions, select appropriate crediting methodologies, implement robust measurement, reporting and verification (MRV) systems, and define benefit-sharing arrangements among project participants and local communities.
The MAE serves as the lead authority overseeing international carbon credit transactions. Acting on behalf of the government, it issues transfer approvals, carries out corresponding adjustments and operates the National Registry System. Relevant line ministries provide technical and sector-specific assessments.
Decree No. 112 establishes the legal foundation for Vietnam’s participation in international carbon markets while attracting additional resources for green transition and low-emissions technology development. The new framework reinforces a core principle: international carbon credit trading must be underpinned by high-quality emission reductions, support Vietnam’s NDC, ensure transparency, and deliver long-term national benefits.
(*) Mr. Nguyen Thanh Cong is a Deputy Head of the Carbon Market Division at the Department of Climate Change under the Ministry of Agriculture and Environment.
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