In the draft decree regulating the organization and operation of the domestic carbon trading exchange, the Ministry of Finance has proposed that carbon transactions be carried out through securities companies.
Specifically, individuals and organizations participating in the market must open trading accounts at designated securities firms. These firms would act as intermediaries connecting investors to the trading system of the Hanoi Stock Exchange, following a model similar to that used for the stock market.
The Ministry of Finance argues that conducting transactions through securities companies would enhance system security and stability. The entire system would remain unaffected by a technical failure at one firm. With existing technological infrastructure and established links with the Hanoi Stock Exchange and the Vietnam Securities Depository and Clearing Corporation, securities firms are well-positioned to facilitate carbon trading efficiently.
The exchange will trade two types of commodities: greenhouse gas emission quotas and carbon credits. Before being listed, the Ministry of Agriculture and Environment must verify and register these in the national registry.
Only facilities included in the list of greenhouse gas emitters issued by the Prime Minister that have completed emission inventories will be eligible for trade quotas. However, carbon credits will have broader eligibility, including domestic and international offset project developers and individuals authorized to participate.
Trading on the exchange will follow a negotiated order-matching mechanism. Once a match is made, the intermediary securities firm will notify the relevant parties. The Hanoi Stock Exchange will then forward the information to the depository for settlement via commercial banks.
Notably, suppose a securities firm also acts as an investor. In that case, the draft decree mandates that the firm prioritize matching customer orders at prices equal to or better than those requested by the customer. This aims to ensure fairness and avoid conflicts of interest.
Establishing a carbon trading exchange marks a concrete step within the framework of Vietnam’s Carbon Market Development Scheme, which was approved by the government earlier this year.
A pilot phase for the domestic carbon market is planned from June 2025 to the end of 2028 before full-scale operations commence in 2029. This phase will focus on finalizing the trading system, management processes, and settlement mechanisms, as well as assessing the operational feasibility of the domestic market.