Mr. Nguyen Tuan Quang, Deputy Director General of the Department of Climate Change, Ministry of Agriculture and Environment

Cooperation under Article 6.2 of the Paris Agreement, especially within the framework of the Joint Crediting Mechanism (JCM) between Vietnam and Japan, has proven to be a highly-effective tool for achieving greenhouse gas emission reductions while promoting sustainable development. This mechanism not only facilitates international collaboration but also lays the foundation for countries to implement cost-effective mitigation actions and accelerate the formation of carbon markets.

Following COP26 in late 2021, Article 6.2 has been shaped by a new set of international regulations, requiring that participating countries revise and enhance their legal and institutional frameworks. For Vietnam, this means developing a more complete and coherent regulatory environment that enables both the implementation of bilateral agreements under Article 6.2 and the effective operation of the JCM in line with global standards and partner country requirements.

To support this transition, the Ministry of Agriculture and Environment (MAE) submitted Decree No. 119/2025/ND-CP, dated June 9, 2025, which includes general provisions for international cooperation under Article 6.2. However, these are primarily based on specific bilateral agreements. Therefore, the Ministry is now drafting a more comprehensive decree that will outline clearer procedures for approving and registering mitigation methodologies, validating projects, issuing and transferring carbon credits, and ensuring alignment with international mechanisms.

JCM projects continue to play a central role - not only by reducing emissions and encouraging the adoption of advanced low-carbon technologies but also by generating carbon credits that can be used within the domestic market or exchanged internationally. With supportive conditions in place, businesses in Vietnam have strong opportunities to engage in JCM activities.

At present, Vietnam is finalizing several critical documents to strengthen this cooperation framework. These include an updated bilateral agreement with Japan to reflect the new legal context in both countries and detailed guidelines on project implementation, monitoring, and credit issuance under the JCM.

According to Decree No. 119, carbon credits generated through the JCM are eligible to be traded on Vietnam’s carbon market. To operationalize this market, Vietnam has outlined a roadmap with a pilot phase from now through 2028, followed by the official launch in 2029, with plans to integrate it into international carbon markets thereafter.

The Ministry of Finance has already submitted a draft decree to the government outlining regulations for a national carbon trading platform. Meanwhile, the MAE is developing a national registration system for emission quotas and carbon credits, accompanied by a guiding circular to support users of the system.

At the infrastructure level, efforts are underway to ensure the Vietnam Securities Depository and Clearing Corporation and the Hanoi Stock Exchange are ready to manage carbon credit transactions. In parallel, authorities are ramping up communication, training, and capacity-building initiatives to help businesses and other stakeholders understand and engage with the carbon market more effectively.

These coordinated efforts are laying the groundwork for a transparent, credible, and efficient carbon market, one that unlocks greater participation from enterprises, particularly those involved in JCM projects, while contributing to Vietnam’s broader climate and development goals.

Mr. Tran Minh Giang, Deputy Head of the Financial Market Legal Division, Department of Legal Affairs, Ministry of Finance

A domestic carbon trading platform, currently being developed under the leadership of the Ministry of Finance, will provide a pricing mechanism for greenhouse gas emission quotas and carbon credits on the market. At the same time, it will offer a secure, transparent, public, and equitable venue and method for transactions among participating entities.

The government has been issuing legal documents to establish the regulatory framework that enables the development of the carbon market. Regulatory agencies will not directly intervene in the pricing of greenhouse gas emission quotas or carbon credits in transactions.

However, certain policies and decisions by regulatory authorities may directly impact the pricing of emission quotas and carbon credits. For example, in terms of supply, Vietnam is currently planning to allocate free emission quotas to businesses on the designated list. The volume of allocated quotas will influence the market price. If too many quotas are distributed, the market price will fall. If businesses do not feel the need to purchase additional quotas, transaction volumes and market liquidity will be extremely limited.

In the future, possibly after 2029, we may explore the application of an auction mechanism for these quotas, meaning businesses would have to pay for part of the allocated quotas. Transitioning from free allocation to auction-based allocation will directly affect the pricing of greenhouse gas emission quotas in the market.

Regarding carbon credit prices, under Decree No. 119/2025/ND-CP issued recently by the government, the offset ratio between quotas and credits in Vietnam is currently set at 30 per cent. The EU does not currently allow carbon credits to offset quota shortfalls. Whether we allow 30 per cent, 20 per cent, 10 per cent, or prohibit the use of carbon credits to offset emission quotas altogether, this policy will significantly affect the price of both quotas and carbon credits in the market.

Looking further into the future, after the pilot phase, depending on the actual scale and demand of the market, the Ministry of Agriculture and Environment and the Ministry of Finance may consider introducing institutions to support liquidity or establish market makers based on international best practices. This factor could also influence the pricing of quotas and carbon credits.

This is a very new market in Vietnam, and making accurate forecasts or simulations is no easy task. Therefore, under Decision No. 232/QD-TTg approving the Scheme on the Establishment and Development of the Carbon Market in Vietnam, as well as Decree No. 119, a pilot phase will run until the end of 2028.

Of course, our ultimate goal is to establish a more fully-developed market model. But for now, the first step is to establish a centralized trading platform for these products. Moving forward, we will gradually introduce supporting mechanisms and utilities for the market and for businesses and to help Vietnam in achieving its emission reduction goals.

Mr. Long Borareaksmey, Regional Director for Asia, Green Carbon Co., Ltd.

With the goal of contributing to greenhouse gas emission reductions and improving farmer incomes, Green Carbon - a pioneering organization in carbon agriculture - is implementing a wide range of projects in Vietnam, from the Mekong Delta to north-central provinces. These models not only help protect the environment but also offer a sustainable path forward for Vietnam’s agricultural sector.

Green Carbon is currently deploying several advanced farming models, most notably the Alternate Wetting and Drying (AWD) irrigation technique. This method has been proven to reduce methane emissions by up to 50 per cent compared to traditional continuous flooding cultivation. At the same time, AWD helps increase rice yields by around 5 per cent, lowers production costs through water and pesticide savings, and boosts farmer incomes by approximately $150 per ha per year.

These models are delivering tangible results. In addition to reducing greenhouse gas emissions, we are helping local farmers improve their livelihoods through higher productivity, lower input costs, and expanded access to carbon credits.

Leveraging Vietnam’s diverse geography and agricultural landscapes, Green Carbon has signed MoUs with numerous agricultural research institutes in the northern, north-central, south-central, and southern regions. These partnerships focus on measuring methane emissions and researching tailored cultivation solutions for each agro-ecological zone.

In addition, Green Carbon is currently collaborating with the Vietnam National University of Agriculture and the Agricultural Genetics Institute (AGI) to implement a soil carbon storage project through intercropping legumes, such as soybeans, during fallow periods. This approach is seen as a new direction to enhance carbon sequestration, restore soil health, and diversify farmers’ livelihood options.

Beyond technical solutions, we also place strong emphasis on social impact, committing to profit-sharing, job creation, productivity improvements, and livelihood support for local communities. Initiatives such as the production of biochar (6,000 tons a year), mangrove restoration (3,000 ha), and reforestation (4,000 ha) also highlight our comprehensive efforts to develop agriculture, the environment, and society in a harmonious and integrated manner.

With our integrated approach - combining technology, research, and community engagement - Green Carbon is gradually shaping a new development path for Vietnam’s agricultural sector, where economic, environmental, and human values are all prioritized.

Mr. Tran Nguyen Trong Nguyen, Managing Director, Kenzen Consulting and Trading Co. Ltd.

As the global race towards net-zero emissions intensifies, Vietnam is stepping up. At COP28, the Prime Minister reaffirmed the country’s commitment to achieving net-zero emissions by 2050. In line with global trends, Vietnamese enterprises are actively pursuing innovative solutions to reduce their environmental impact while fostering sustainable economic growth, with green hydrogen emerging as a key strategic direction.

Vietnam has favorable natural conditions for renewable energy, with over 1,000 GW in potential capacity, including 650 GW from wind and 380 GW from solar. Under the National Power Development Plan VIII (PDP8), solar and wind energy are expected to reach 47 GW by 2030 and 313 GW by 2050. More than 680 GW of renewable energy could be harnessed for green hydrogen production.

But utilization remains limited. In 2022, renewable capacity reached 21,000 MW, but 4,736 MW had not been connected to the grid. Green hydrogen production from surplus electricity is thus seen as a strategic solution to both energy and environmental challenges.

Vietnam aims to produce 100,000-500,000 tons of green and blue hydrogen annually by 2030, scaling up to 10-20 million tons by 2050. Supporting this ambition, Japan’s Obayashi Corporation is developing a hydrogen supply chain in Vietnam, from production to transport and local use, with a pilot project at the Kizuna 3 - Ready Serviced Factory in what is now southern Tay Ninh province. The initiative leverages surplus solar power for local hydrogen production, targeting a reduction of 1,000 tons of CO₂ in the pilot phase.

The model features three stages: electrolysis, storage, and localized consumption, enabling clean energy access without upfront user investment or large infrastructure. A Measurement - Reporting - Verification (MRV) framework is also being developed, with plans to apply the Joint Crediting Mechanism (JCM).

Obayashi’s experience in Japan with hydrogen from renewables, geothermal energy, and combined electricity-heat systems underpins its confidence in expanding the model to Vietnam and across Southeast Asia. Plans include establishing hydrogen transport chains from Quy Nhon Port in the south-central region to northern Vietnam, Singapore, and neighboring countries.

While green hydrogen holds promise, the sector still faces hurdles such as high costs, limited infrastructure, and a need for policy support. Public-private partnerships, stronger State mechanisms, and international cooperation are seen as key to scaling the industry.

With strategic investment and clear government direction, green hydrogen can become a pillar of Vietnam’s energy transition, boosting emissions reductions, energy independence, and clean energy exports. The journey to net-zero is long, but with companies like Obayashi leading the way, Vietnam has the potential to become a regional hub for green hydrogen in the near future.

Mr. Matsuzawa Yutaka, Advisor to the Minister of the Environment (Japan), and former Vice Minister for Global Environmental Affairs, Ministry of the Environment

The fact that both Vietnam and Japan have developed or are in the process of developing their own domestic and international carbon credit markets will create more opportunities to expand carbon credit trading both within and across borders.

The two countries have engaged in more than a decade of collaboration through the Joint Crediting Mechanism (JCM). The JCM is an approach that addresses climate change and reduces greenhouse gas emissions by offering practical solutions through tools such as financial support, technology transfer, and the substantive participation of both countries.

Moreover, the JCM can generate credits within frameworks like the Paris Agreement on climate change and the carbon credit market regulations in both Vietnam and Japan. This means that credits issued under the JCM are transparent, reputable, and guaranteed in terms of quality.

The JCM between Vietnam and Japan will play a significant role in contributing to global greenhouse gas emission reductions. Both sides have high expectations for the development of this mechanism. In the time ahead, the two governments will work closely to examine the economic feasibility of emission reduction projects and ensure policy alignment under the JCM framework.

Additionally, Vietnamese enterprises, through the JCM, have recently participated in several high-tech emission reduction projects, such as constructing biomass power plants. The technology and experience gained from these projects can also be shared with other countries undergoing similar economic decarbonization processes and facing conditions similar to Vietnam.

Mr. Koakutsu Kazuhisa, Director of the Paris Agreement Article 6 Implementation Partnership Center, Institute for Global Environmental Strategies (IGES)

With over 20 years of experience in climate change mitigation and having been involved in the early stages of the Joint Crediting Mechanism (JCM), I see that Vietnam is demonstrating strong momentum in implementing the JCM as well as in developing both domestic and international carbon credit and emissions trading systems (ETS).

Looking at the broader evolution of the carbon trading market, which originated from the Clean Development Mechanism (CDM), we are now seeing a new phase where each country is establishing its own domestic trading market. Among them, the EU currently hosts the largest ETS, while countries such as China, India, and Brazil are also developing their own ETS frameworks.

In addition to these leading economies, Southeast Asian countries are beginning to enter the field. For instance, Singapore has introduced a carbon tax. Vietnam is also planning to launch its own ETS while continuing to strengthen and formalize its carbon market regulations. Other countries like Indonesia, Malaysia, and the Philippines are closely following this trend.

In terms of preparedness, Vietnam has made its ambitions clear by committing to net-zero emissions by 2050 and pledging bold targets in its Nationally Determined Contributions (NDC).

To realize this goal, the government, particularly the Ministry of Agriculture and Environment and the Ministry of Finance, is actively developing a strong legal framework along with several technical regulations. Another advantage for Vietnam is its ability to leverage the experience gained from over a decade of participation in the JCM to accelerate the implementation of its domestic carbon market regulations.

The JCM provides detailed provisions for calculating emission reductions across different types of projects, as well as for project registration, approval, and monitoring. Moreover, companies that have already taken part in JCM projects in other countries will likely find it easier to adapt to Vietnam’s domestic carbon market if similar rules are applied.

Japan hopes that Vietnam’s participation in the JCM will provide valuable experience in developing monitoring, evaluation, and technical standards for its carbon market.

Mr. Tran Ky Anh, Carbon Credit Transaction Manager, Vingroup

For Vingroup, a major challenge in joining the international carbon market under Article 6 of the Paris Agreement is the existing information gap. As this market remains relatively new in Vietnam, many businesses, including Vingroup, still lack clarity on the processes and requirements for participation.

The Ministry of Agriculture and Environment has recently proposed Decree No. 119, to amend Decree No. 06/2022/ND-CP, offering clearer guidance on international carbon credit trading and offsetting mechanisms under Article 20a. This is expected to help address part of the knowledge gap. Vingroup also hopes the upcoming decree on international carbon exchange will offer more specific instructions for businesses to engage in Article 6 markets.

Regarding Vingroup’s greenhouse gas emission reduction efforts in Vietnam, over the past three years VinFast has sold nearly 400,000 electric vehicles (EVs). It is projected that these vehicles will reduce emissions by 5.9 million tons of CO₂ over their lifetime. Supporting this is a national network of charging stations, with 150,000 charging ports installed around the country. In 2024 alone, people choosing Xanh SM electric taxi services helped cut emissions by 150,000 tons of CO₂. In addition, with more than 300 electric buses operating across 31 routes in five cities, including Hanoi and Ho Chi Minh City, Vingroup estimates a reduction of around 48,000 tons of CO₂ was achieved last year.

VinEnergo, a newly-established subsidiary, is also implementing renewable energy projects of 14,000 MW and LNG thermal power projects of 4,800 MW, with a target of increasing capacity to approximately 47,100 MW by 2035.

Vingroup is also developing and registering several carbon credit projects under international standards. For example, V-Green’s EV charging station carbon credit project is planned to be registered under the Verra Verified Carbon Standard (VCS) starting in July. The VinFast electric motorbike project is being registered under the Gold Standard for the Global Goals (GS4GG), and a solar power project in northern Son La province is expected to be registered under the Global Carbon Council (GCC) standard.

Furthermore, we have identified a number of other potential projects, including renewable energy projects (VinEnergo), the high-speed railway project (VinSpeed), VinBus electric public transportation services, Xanh SM electric taxi services, and green urban building projects.

In terms of carbon market participation, we have identified four key markets: the NDC compliance market, under Article 6 of the Paris Agreement, the CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) compliance market for airlines, the soon-to-be-piloted domestic emissions trading system (ETS), and the voluntary carbon market (VCM).

Vingroup aims to participate in all of these markets, depending on actual conditions and suitable opportunities. This approach is intended to quantify the group’s green transition efforts while also creating an additional revenue stream.

We look forward to opportunities to collaborate with Japanese partners on implementing carbon credit projects and participating in the Joint Crediting Mechanism (JCM) between Vietnam and Japan.