Sustainable Markets: Insights into VietNam's Environmental Trends
As two prominent players in the VCM, AlliedOffsets and ACX (AirCarbon Exchange) have teamed up to bring you valuable insights into the most recent developments, project activities, pricing trends, and the status and locations of projects within the market.
In this newsletter, we do a deep dive into the dynamics of the voluntary carbon market (#VCM) across different regions and countries. This edition focuses on Vietnam, offering a comprehensive overview of the country's carbon offset projects, leading buyers, and the latest data on issuances and retirements.
Regional Project Overview
Vietnam
In 2024, Vietnam saw a significant increase in issuances and retirements surpassing any previous year, including the peak year of 2021. This uptick follows steady growth in 2020 and 2021 and indicates a strong momentum for the voluntary carbon market in Vietnam.
At the moment, Vietnam has 168 active projects and 94 more pending, with the majority focused on clean energy initiatives. Some major international companies across various sectors, including JetBlue (aviation), Volkswagen (industrials), and Eurofins (services) are the top buyers in the country.
Only 0.19% of these projects employ removal methodologies, and none have received Letters of Approval (LoA) or Core Carbon Principles (CCP) approval. The average estimated annual emissions reduction reported by project developers stands at 87,000 tonnes, with 84 out of 536 projects offering additional co-benefits such as contributions to Sustainable Development Goals (SDGs) or Verra CCB validation.
Projects by status
Project by registry
Projects by sector
Issuances Over Time
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Retirements over time
Vietnam’s Potential in Voluntary Carbon Market
Vietnam’s carbon market is gaining traction, driven by increasing global demand for carbon credits and supportive government policies. As companies worldwide seek cost-effective ways to meet emissions targets, Vietnam is emerging as a key carbon credit provider, thanks to its natural resources and investment opportunities in renewable energy, afforestation, and sustainable agriculture.
Government Support and Legal Framework: Vietnam’s government has actively promoted carbon market development through policies like the Law on Environmental Protection (2020) and Decree No. 06/2022/ND-CP, which lay the foundation for a regulated market. These measures focus on emissions reporting and trading, preparing industries such as power, steel, and cement for compliance with international mechanisms like the EU’s Carbon Border Adjustment Mechanism (CBAM).
International Collaboration and Green Finance: International collaboration plays a vital role, with programs like the Green Climate Fund and green finance initiatives attracting socially responsible investors. Vietnam’s State Bank is also developing a green bond taxonomy, expected in 2024, to support these efforts.
Despite this progress, challenges remain, including regulatory uncertainty, limited expertise in Measurement, Reporting, and Verification (MRV), and market fragmentation. The evolving policy environment and complexities of international carbon trading add to these hurdles.
Vietnam plans to launch a national carbon credit exchange by 2028, with a pilot platform in 2025, aligning with global markets by 2030. With proper management and strategic planning, Vietnam has the potential to become a significant player in global carbon trading while meeting its own climate goals under the Paris Agreement.
Sources:
For more information on ACX (AirCarbon Exchange) , please visit https://acx.net/ or email [email protected] .
For more data on carbon credits and information on AlliedOffsets , please visit https://alliedoffsets.com/ .