Finalizing emission quota allocation mechanisms, developing carbon market

Detailed summary

A new draft decree will refine Vietnam's carbon market framework, introducing quota allocation and auction mechanisms alongside national credit standards.

At a consultation workshop held on November 10, the Carbon Market Division under the Department of Climate Change (the Ministry of Agriculture and Environment) provided updates on key proposed regulations.

Regarding climate change adaptation, the draft mandates announcing climate change scenarios every five years. These scenarios will serve as the foundation for impact assessments and risk identification across development strategies and plans.

Ministries, sectors, and localities will assess losses and damages while developing tailored adaptation solutions. The draft also introduces a monitoring framework linking implementation results with investment resources and management responsibilities, prioritizing water security, food security, ecosystems, and key infrastructure.

For greenhouse gas emission management, facilities emitting 3,000 tons of CO2 equivalent or more annually must conduct inventories. Select facilities in energy, transport, industrial, commercial, and waste treatment sectors will also fall under this mandate based on specific technical thresholds.

The draft adds a Measurement, Reporting, and Verification (MRV) mechanism based on national standards to ensure accurate and verifiable data, which is essential for allocating quotas and facilitating carbon market transactions.

Quota allocation for applicable facilities will continue through the 2027-2028 period under the proposed roadmap. Starting in 2029, an auction mechanism will supplement standard allocation methods. According to the Department of Climate Change, auctions aim to enhance transparency while encouraging businesses to adopt clean technologies and improve energy efficiency.

The draft includes market stabilization measures for instances of abnormal price fluctuations or severe supply imbalances. Solutions include adjusting the timing and volume of auctioned quotas, utilizing reserve quotas, and enhancing transaction monitoring.

At the workshop, Deputy Minister of Agriculture and Environment Le…

On…

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