According to leading carbon market experts, over the next decade, beyond core production and business activities, carbon credits could emerge as a unique asset class, offering added value that many businesses have yet to fully envision.

Carbon Market Policies: What Businesses Need to Know

As one of the keynote speakers at the final forum in the “Talk GreenBiz – The Compass for Green Growth” series, organized by the For a Green Future Foundation under Vingroup in collaboration with Dan Tri Newspaper, Nguyen Sy Linh, Head of Climate Change at the Institute of Strategy and Policy on Agriculture and Environment under the Ministry of Agriculture and Environment Vietnam, provided detailed insights into Vietnam’s evolving carbon market framework.

According to Dr. Linh, Vietnam’s carbon market legal framework has been built progressively, from early climate change policies in 2008 and the 2011 national strategy, to the pivotal Environmental Protection Law 2020. Article 139 of the law serves as the cornerstone for organizing and developing the carbon market.

Subsequent decrees, including Decree 06 (2022) and Decree 119 (2025), further define emission quota allocation, sectors required to conduct greenhouse gas inventories, auction mechanisms starting from 2029, and the allowance for businesses to offset up to 30% of excess emissions using carbon credits.

Additionally, Government Project 232 outlines a three-phase roadmap, from legal completion to pilot implementation and full market operation after 2029.

Despite this progress, Dr. Linh noted that the market still faces bottlenecks on both the supply and demand sides, creating challenges for businesses in cost accounting, strategic planning, and identifying commercial opportunities.

Dr. Nguyen Sy Linh noted that the link between climate policy, green finance, and sustainable development is becoming increasingly interconnected (Photo: Mạnh Quân).

He highlighted the 30% offset provision under Decree 119 as a significant development, opening up new opportunities for carbon credit suppliers to participate in the compliance market.

Looking at international models, Dr. Linh emphasized that Vietnam can adopt flexible approaches tailored to its context, as most mature carbon markets began with pilot phases before scaling up.

More broadly, he pointed out the increasingly tight linkage between climate policy, green finance, and sustainable development. Climate change has evolved from an environmental issue into a core economic and trade concern. Policies such as the Carbon Border Adjustment Mechanism (CBAM) illustrate this shift—export-oriented businesses must meet emission reduction requirements or face additional costs.

To remain competitive and access green finance, Vietnamese businesses must therefore adjust production models, reduce emission intensity, and improve energy efficiency. Keeping pace with green trade trends and international standards will be critical for long-term sustainability.

Readiness of Vietnamese Businesses in the Voluntary Carbon Market

Focusing on the voluntary carbon market, Nguyen Phuong Nam, Founder and CEO of KLINOVA, offered practical insights into barriers, opportunities, and the preparedness of Vietnamese businesses.

He described the voluntary carbon market as economically promising but requiring long-term understanding, investment, and operation under strict international standards.

Unlike compliance markets, voluntary markets operate based on supply and demand, with prices negotiated between parties on platforms managed by independent organizations. This creates flexibility for businesses, albeit with more complex mechanisms and rigorous compliance requirements.

In terms of benefits, Dr. Nam emphasized that carbon credits can generate economic returns, enhance brand reputation, and improve access to green financing. While carbon credits may initially be considered “additional benefits,” well-structured projects can create stable revenue streams.

Businesses engaged in green transition projects not only strengthen their ESG credentials but also meet increasingly stringent expectations from international investors, who are more willing to finance emission reduction initiatives.

Another advantage of voluntary markets is the ability to quickly adopt sustainability standards, improve competitiveness in export markets, and optimize costs through emission reduction solutions.

However, Dr. Nam stressed that carbon credit development is a long-term process embedded within business strategy, not a one-off transaction. The process typically involves five stages, from registration and validation to monitoring and certification, and can take up to two years.

Whether a project ultimately generates credits depends on actual performance, not just initial design. Many projects fail to reach certification due to inability to meet ongoing monitoring and verification requirements.

Regarding readiness, Dr. Nam observed a mixed landscape. A group of pioneering companies, mainly integrated into global supply chains, have proactively explored carbon markets and incorporated emission reduction targets into their strategies. Meanwhile, many small and medium-sized enterprises have only recently begun engaging with the concept, particularly following Vietnam’s Net Zero commitment at COP26.

Nevertheless, green transition is increasingly viewed as an opportunity to restructure business models toward lower emissions, improved competitiveness, and stronger access to international markets.

Drawing from consulting experience at KLINOVA, Dr. Nam highlighted that carbon credit projects demand persistence, significant investment, and long-term vision. Many failures stem from insufficient resources to sustain measurement, monitoring, and verification processes, essential for credit issuance.

Long-Term Strategy: The Key to Success

Both experts agreed that long-term strategy is critical for success in the carbon market.

Dr. Linh emphasized that effective and transparent carbon market operation requires coordinated efforts among government agencies, businesses, and financial institutions. He also highlighted the importance of MRV (Measurement, Reporting, and Verification) systems in establishing carbon credits, monitoring emissions reductions, and enabling market adjustments as systems transition from free allocation to auction-based mechanisms.

Dr. Nam added that credit quality, transparency, and buyer trust are fundamental to sustainable market development. Lessons from markets such as the EU and South Korea show that financial stabilization mechanisms can help maintain price stability and encourage broader participation from institutions and investors.

In Vietnam, while the carbon market is still emerging, the potential for a broader ecosystem, from brokerage to support services, is substantial. Businesses must therefore understand technical standards, develop high-quality credit projects, and integrate them into long-term business strategies.

Ultimately, both experts underscored that green transition delivers real, lasting value, not only ensuring business survival but enabling future success (Photo: Mạnh Quân).

“The returns from green transition and carbon credits are well-deserved rewards, motivating businesses to remain committed to environmental protection and sustainable development,” Dr. Nam concluded.