Publications

Vietnam: New Decree Amending Regulations on Mitigation of Greenhouse Gas Emissions and Protection of the Ozone Layer

June 19, 2025

Introduction: Prior Legal Framework

Until recently, the framework was centred around Decree No. 06/2022/ND-CP “On Mitigation of Green House Gas (GHG) Emissions and Protection of Ozone Layer”, dated 7 January 2022 (Decree 06).

Decree 06 applied to:

• Businesses and facilities emitting GHGs (e.g., factories, transport, buildings).
• Producers/importers of ozone-depleting substances (ODS).
• Entities involved in carbon credit trading or offset projects.

Among other things, it provided for:

• GHG inventory for large emitters (e.g., thermal power plants, industrial production facilities).
• Requirement to develop and implement GHG reduction plans (with quotas from 2026 onward).
• Requirement to report and verify GHG emissions through the MRV system (Measurement, Reporting, Verification).
• Possibility to participate in a carbon trading exchange (CTX)—buy/sell GHG quotas and carbon credits.

Facilities could generate carbon credits through emission-reduction projects.  Carbon credits could then be traded or used to offset emissions exceeding their quota.

Updated Legal Framework

The new legal framework was introduced by Decree No. 119/2025/ND-CP, dated June 9, 2025 (Decree 119), which substantially expands and details existing regulations.

Among other things, Decree 119:

• elaborated on the National Registration System: a digital platform to track GHG quotas and credits.
• In terms of responsibility for the MRV system – handled by the Ministry of Agriculture and Environment (i.e. Under Decree 06, it was handled by the Ministry of Natural Resources & Environment and now under the new name of the merged Ministry of Natural Resources & Environment and Ministry of Agriculture & Rural Development).
• Provided more specific guidance with respect to the GHG Emission Quotas, namely:
  • Phase 1 (2025–2026): quotas apply only to thermal power plant, steel, and cement manufacturing facilities (which is included in the list determined by the PM).
  • Phase 2 (2027–2030): Broader application; quotas set by sector ministries.
• Quotas are tradeable and borrowable.

• Pilot Carbon Trading Platform to be fully launched by 2028.
• From 2029: it is anticipated that there would be formal auction systems and full regulations for domestic and international participation.

Who Can Participate?

Large GHG emitters such as:

• Thermal power plants
• Steel, cement factories
• Big commercial buildings and cargo transport companies

There is also an optional/voluntary participation for smaller businesses and investors to:

• Develop emission-reduction projects
• Generate carbon credits
• Sell credits on the carbon market
• Adopt sustainable technologies.

MRV Inventories

Decree 119:

• Specifies exact formats, deadlines, and procedures for GHG inventories and MRV.
• Establishes GHG inventory appraisal councils with technical experts.
• Introduces sector-specific methods and use of international protocols.
• Facilities must now:
  • Prepare every-two-year inventory reports.
  • Work with certified third-party appraisers.
  • Submit inventories through the National Registration System.
• Decree 119 distinguishes between large emitters (e.g., steel, cement, power) and smaller facilities — applying differentiated inventory rules.

Integration With International Mechanisms (Paris Agreement)

Decree 119 envisages participation in:

• Article 6.2 bilateral trading (e.g., Japan-Vietnam ITMO cooperation).
• Article 6.4 project mechanism (UNFCCC-supervised).
• CDM-to-Article 6.4 conversion (until Sept 30, 2025).
• Envisages international transfer of credits (e.g., issuance and reporting under Paris compliance).

This is crucial for:

• Foreign investors seeking to buy ITMOs from Vietnam.
• Vietnamese developers seeking to register emission reduction projects under global frameworks.

To Conclude

The Decree 06 as amended by Decree 119 have created a solid vision and foundation to:

• Establish Vietnam’s domestic carbon market.
• Enable integration into international trading frameworks.
• Define obligations and opportunities for businesses.

For businesses and manufacturers, there are now clearer compliance rules.  At the same time – new opportunities in terms of carbon credits transfers.