In the Project on developing the carbon market in Viet Nam, the Ministry of Finance has identified two main types of commodities: greenhouse gas emission quotas and carbon credits.
In this way, the Ministry of Natural Resources and Environment allocates greenhouse gas emission quotas to establishments on the list of establishments required to inventory greenhouse gases. Emission quotas are the volume of greenhouse gases, converted into equivalent tons of CO2, that the management agency allows a facility/entity/organization to emit within a certain period. Establishments that emit more than the prescribed quota will have to buy quotas from other establishments or carbon credits on the market to compensate for the excess, or they will be fined by the state management agency.
Carbon credits certified by the Ministry of Natural Resources and Environment are traded on the carbon credit exchange. Carbon credits are created from domestic and international credit-generating programs and projects. Carbon credits represent the equivalent amount of tons of CO2 that an activity can generate based on the activity's ability to absorb or remove greenhouse gases, such as Afforestation, gas recovery for power generation, or based on the activity's ability to reduce emissions compared to other normal activities (renewable energy, etc.)
According to the Ministry of Finance, the carbon market will involve two main subjects: investors and intermediary organizations. Investors are understood to include three subjects: Facilities on the List of entities required to inventory greenhouse gases, Organizations implementing programs and projects to create domestic or international carbon credits; Organizations and individuals eligible to participate in carbon credit investment and trading activities.
The Ministry of Natural Resources and Environment will also be responsible for managing and operating the domestic carbon market and supervising the carbon credit trading floor, according to the provisions of the Law on Environmental Protection 2020 and related decrees.
Developing a carbon credit market will help Viet Nam green its economy and improve the competitiveness of businesses exporting goods. If appropriate transactions are made, Viet Nam can sell carbon credits worth about 300 million USD/year.