Vietnam pilots carbon trading market for heavy industry

Vietnam is piloting a carbon trading market on the Hanoi Stock Exchange, currently involving approximately 110 to 150 large emitters in the thermal power, steel, and cement sectors. The market operates through negotiated transactions where parties agree on terms before entering orders into the system.

Under the pilot framework, emission quotas are allocated 100% for free. Companies can use carbon credits to offset up to 30% of their allocated quotas, and they may borrow up to 15% of the following period's quota to meet current obligations. If a company reduces emissions below its allocated limit through technological investment, it can sell the surplus quotas or carry them forward.

Market liquidity remains low following the initial launch on June 29, with minimal trading volume recorded for the VN2025 emission quota code. Experts suggest this low liquidity is expected for a new market in its sandbox phase, as many businesses are still finalizing greenhouse gas inventories and adjusting to trading procedures. The transition to a full compliance phase requires companies to submit emission inventories by December 1, 2027, and complete quota returns by the end of that month.