SD LINK at Inception Workshop Impact Assessment of the Emission Trading System and Carbon Credit in Vietnam
On October 29th, 2024, at Hanoi, the United Nations Office for Project Services (UNOPS), in collaboration with the Department of Climate Change (Ministry of Natural Resources and Environment), organized the kick-off Inception Workshop Impact Assessment of the Emission Trading System and Carbon Credit in Vietnam.
During the workshop, delegates focused on discussing policy management and support for carbon credit projects, plans for implementing the carbon market in the coming period, and methods to ensure the accuracy and reliability of data for the impact assessment model.
Currently, 70 countries and territories have implemented carbon pricing mechanisms, covering approximately 11 billion tons of carbon, which accounts for 20% of global emissions. Vietnam is also in the process of preparing for its domestic carbon market, as outlined in the Environmental Protection Law and Decree 06/2022/NĐ-CP.
According to information shared at the workshop, by June 2025, Vietnam plans to allocate emission quotas and pilot the Emission Trading System (ETS). This technical support plays a crucial role in assessing potential impacts and preparing for this pilot phase. The advisory team involved in the technical support has been highly regarded and is expected to provide valuable findings and recommendations for Vietnam.
During the upcoming pilot phase, only major emitting facilities in industries such as iron and steel production, cement, and thermal power will be included in the carbon market (approximately 150 enterprises). The Ministry of Natural Resources and Environment will organize and manage activities related to trading, reclaiming, surrendering, and borrowing emission quotas. Vietnam aims to officially operate its carbon market by 2028 and plans to integrate the domestic market with international and regional markets after 2030.
At the kick-off workshop, both local and international experts provided updates on Vietnam's carbon market regulations and international carbon credit trading. They also shared global experiences in determining management approaches and assessing impacts on the ETS and international carbon credit trading.
Dr. Robert Ritz from the University of Cambridge shared Europe's experience in designing and managing the ETS. He highlighted the example of the UK's carbon tax in the power sector, which helped reduce CO₂ emissions from electricity generation by 26% within just three years.
Additionally, Mr. Frederic Gagnon-Lebrun, an expert from South Pole, introduced international experiences in determining management approaches and impact assessments for international carbon credit trading. He emphasized that to attract investment and ensure transparency, Vietnam needs to simplify the rules and processes for carbon credit transactions while establishing a clear management system for traded carbon credits.
Ms. Nguyen Hong Loan, Director of GreenCIC and Lead Climate Policy Expert, stated that this technical support will analyze Vietnam’s legal framework and consider international experiences to determine suitable design and management approaches for the ETS, focusing on feasible options for piloting the carbon market during 2025-2027.
As part of the project activities, the domestic consulting team will assess and model the impact of ETS management options in Vietnam, including analyzing the specific economic, social, and environmental effects of these options, particularly their impact on energy-intensive industries. They will also evaluate and model the economic, social, and environmental impacts of carbon credit trading and Vietnam’s greenhouse gas emission reduction results on an international scale. Based on this analysis, the consulting team will provide recommendations to determine optimal management approaches for carbon credits and greenhouse gas emission quotas.
Through the project's technical support activities, domestic and international experts will provide in-depth expertise and evidence-based recommendations to assist policymakers in designing a carbon market that aligns with domestic regulations and supports Vietnam’s efforts to reduce emissions and combat climate change.
The inception workshop marks an important step in implementing the technical support for assessing the impact of the greenhouse gas emission quota trading system and carbon credit market in Vietnam, contributing to the development and operation of Vietnam’s carbon market.
SD LINK Co., Ltd., a consultancy specializing in management and investment in Vietnam, participated in the workshop as a facilitator connecting researchers and investors in this field. With strong implementation capabilities and a team of experts from diverse specialties with years of experience, SD LINK will support potential domestic and international clients in researching and entering Vietnam’s carbon credit market in the near future.