Flexible solutions crucial to develop carbon market: Deputy PM

Hanoi - With its tremendous potential in renewable energy and the carbon market, Vietnam will be highly attractive to investors, Deputy Prime Minister Tran Hong Ha stressed, while addressing a meeting in Hanoi on August 22 on seeking ideas towards completing a draft plan on carbon market development in Vietnam.

Ha highlighted the need for flexible, innovative, and breakthrough solutions in implementing the plan, and quickly adapting to and keeping up with global trends.

This is a game where the swift win, and the smart seize opportunities, he noted, emphasing the importance of bringing into play these opportunities to move from being behind and less developed to going "side by side" and eventually leading.

The official requested the Ministry of Finance to thoroughly consider and acquire all feedback, and quickly finalise the draft plan for not only the carbon market but also the organisational apparatus and infrastructure.

Besides, the Ministry of Natural Resources and Environment, the Ministry of Planning and Investment, and other relevant ministries and agencies are tasked to join hands in defining the supply and demand of the domestic and international carbon markets; and developing a legal framework for the calculation, measurement, and identification of trading products in the carbon market, such as greenhouse gas emission quotas and types of carbon credits. This framework will serve as a basis for designing a comprehensive operational plan for the domestic trading platform, as well as a condition for connecting with the international market to ensure transparency and openness.

In the latest draft, the carbon market will create a new financial stream for greenhouse gas emission reduction activities, promote green transition, develop low-emission technologies, foster a low-carbon economy, and proactively respond to climate change, aiming for net-zero emissions by 2050.

In the 2025-2028 period, the carbon market will be piloted nationwide, carbon credits will not be sold abroad, and there will be no regulations for connecting or exchanging carbon credits domestically with regional and global carbon markets.

From 2029 onwards, the market will be officially operational nationwide. During this period, efforts will continue to build and better the legal framework and infrastructure necessary for connecting the domestic with regional and global carbon markets.

Vietnam has successfully executed a landmark transaction, selling 10.3 million tonnes of CO2 emission credits to the World Bank for nearly VND1.25 trillion VND ($52.74 million), as confirmed by the Ministry of Agriculture and Rural Development to the prime minister on December 28.

Only a few developers of emission-heavy installations have a deep understanding of the emission trading system and carbon market, a wide-ranging survey has found.

The growing demand for carbon credits ranks high in Vietnam. As global awareness and regulatory pressures on climate change increase, the demand for carbon credits is expected to rise.

The local authorities are on track to complete a carbon credit market development scheme in Vietnam, which is careful preparation for establishing a pilot carbon trading platform from next year.