Vietnam's carbon credit market: Barriers need to be removed to effectively exploit potential

By creating economic value for reducing greenhouse gas emissions, the carbon credit market can help Vietnam harmonize economic growth, addressing social issues and protecting the environment.

According to a report from MSCI - an American financial company specializing in providing financial services to global investors, the value of the voluntary carbon credit market worldwide has reached the milestone of 1.4 billion USD with more than 6,200 carbon projects registered through the 12 largest credit registration agencies in the world by the end of 2024. Along with the increasingly popular trend of sustainable development, the above figure is forecast to fluctuate from 7 - 35 billion USD by 2030, clearly demonstrating the outstanding growth potential of this market.

Through the above statistics, it is clear that countries and businesses are deeply interested in sustainable development factors around the world. This model promises to increase strongly when the carbon credit market not only helps create long-term value but also helps reduce risks in the context of climate crisis and social unrest.

Forest area belongs to Lak Forestry One Member Co., Ltd. Photo: Van Tiep

Vietnam is also not outside the global sustainable development trend when the exchange of carbon credits to the world has been implemented by businesses since the mid-2000s. To date, Vietnam has had more than 300 programs and projects included in the carbon credit exchange and offset mechanism. Notably, about half of them have been granted up to 40.2 million credits and are trading on the international carbon market. Thanks to that, Vietnam has risen to become one of the top 4 countries in terms of the number of projects under the Clean Development Mechanism (CDM), just behind China, Brazil and India; and ranked 9th out of 80 countries with CDM projects granted credits.

In addition, with its geographical location and rich agricultural sector, Vietnam is assessed to have the ability to provide a large number of carbon credits in the context of the global search for solutions to reduce emissions. It is estimated that Vietnam's agricultural sector alone can contribute about 57 million carbon credits per year, equivalent to the ability to absorb 57 million tons of CO2. Through cooperation agreements with international organizations, Vietnam has the potential to earn hundreds of millions of USD per year from selling carbon credits, opening a feasible direction for a green economy and sustainable development.

It can be seen that sustainability is gradually becoming a mainstream trend, when all business goals go hand in hand with sustainable development strategies. Therefore, participating in the carbon credit market not only contributes to enhancing business reputation, minimizing risks and increasing operational efficiency, but also creates conditions for businesses to attract investment capital and expand the market.

Although the potential of the carbon credit market in Vietnam is huge, there are also many challenges and difficulties. Therefore, to take full advantage of this advantage, the Government and businesses need to thoroughly overcome the barriers that limit the development of the carbon credit market in Vietnam.

One of the biggest barriers to developing the carbon credit market in Vietnam is the limitation of capital and infrastructure. Accordingly, in order for the verification and trading of credits to achieve high efficiency, building a complete, accurate and transparent data infrastructure is extremely necessary. Not only that, information on carbon credit projects must be consistent and synchronized between the registration agency and the actual project. To meet the above strict requirements, the capital needed to prepare is extremely large, because the investment does not stop at improving technology but also includes the cost of training staff to operate the data system.

The carbon credit market can help Vietnam harmonize economic growth, solve social problems and protect the environment. Photo : Van Tiep

The lack of specific and strict legal regulations for the carbon credit market is also one of the reasons why many businesses choose to take a cautious approach or delay in participating in the market. Although the Government has made efforts to issue guiding documents, updating and applying them in practice still faces many difficulties. The lack of popularity, lack of specificity and ambiguity in the implementation regulations makes many businesses still feel confused and not confident enough to invest long-term.

In addition, the management and operation of the carbon credit market also requires a team of highly qualified experts with practical experience. However, at present, Vietnam still does not have enough manpower capable of operating the system according to international standards, from data collection to transaction management and project monitoring; professional training capacity also does not meet the requirements. This not only slows down the development progress but also affects the reliability of the carbon credit trading system in Vietnam.

The emergence of the carbon credit market has opened up many investment and sustainable development opportunities for the global economy. Therefore, in order to catch up with the global trend and affirm Vietnam's position on the world green economic map, strong interest from businesses as well as active support for green transformation from the Government and relevant ministries and branches is extremely necessary.

Source: https://baodaklak.vn/kinh-te/202505/thi-truong-tin-chi-carbon-viet-nam-can-go-rao-can-de-khai-thac-hieu-qua-tiem-nang-58b1825/