How much are carbon credits and GHG emission quotas in Vietnam allowed to be traded on domestic carbon market?

1. How much are carbon credits and GHG emission quotas in Vietnam allowed to be traded on domestic carbon market?

Pursuant to Article 19 of Decree 06/2022/ND-CP stipulating exchange of GHG emission quotas and carbon credits on domestic carbon market as follows:

1. The exchange of GHG emission quotas and carbon credit shall be carried out on the CTX and domestic carbon market under regulations.

2. Carbon credits and GHG emission quotas allowed to be traded

a) GHG emission quotas prescribed in Clause 2 Article 12 are allowed to be traded on CTX. 01 GHG emission quota unit equals 01 tonne of CO2 equivalent;

b) Carbon credits collected from programs and projects according to the carbon exchange and offsetting mechanisms are allowed to be offset against GHG emission quotas on the trading floor. 01 carbon credit equals 01 tonne of CO2 equivalent;

3. Auctions, transfer, borrowing, return of GHG emission quotas and use of carbon credits to offset against GHG emissions

a) Facilities may auction to own more GHG emission quotas in addition to the amount of GHG emission quotas allocated in the same commitment period;

b) Facilities may carry forward unused of GHG emission quotas in the previous year to the following years within the same commitment period;

c) Facilities may borrow and use GHG emission quotas allocated to the following year for the previous year within the same commitment period;

d) Facilities may offset carbon credits from projects under the carbon exchange and balancing mechanisms against GHG emissions exceeding the GHG emission quotas allocated in the same commitment period; The amount of carbon credits for offsetting must not exceed 10% of the total GHG emission quota allocated to the facilities;

dd) The allocated GHG emission quotas will be automatically withdrawn by the Ministry of Natural Resources and Environment when a facility stops operating, is dissolved or goes bankrupt;

e) The State encourages facilities to voluntarily return the unused GHG emission quotas for the purpose of contributing to the achievement of the national GHG emission mitigation;

g) At the end of each commitment period, facilities must pay for GHG emissions exceeding the allocated GHG emission quotas after auction, transfer, loan, use of carbon credits for offsetting. Besides of payment, the amount of GHG emissions exceeding the GHG emission quotas allocated will be balanced with the GHG emission quotas allocated in the following commitment period;

h) The Ministry of Natural Resources and Environment shall provide guidance on auctions, transfer, borrowing, return of GHG emission quotas.

2. What is registration of programs and projects according to carbon exchange and offsetting mechanisms in Vietnam? 

According to Article 20 of Decree 06/2022/ND-CP stipulating registration of programs and projects according to carbon exchange and offsetting mechanisms as follows:

1. Entities formulating and implementing programs and projects according to carbon exchange and balancing mechanisms

a) Vietnamese organizations that wish to formulate and execute these programs and projects;

b) Foreign organizations that wish to formulate and execute these programs and projects in Vietnamese territory.

2. Entities specified in Clause 1 of this Article that execute programs and projects according to carbon exchange and offsetting mechanisms of UNFCCC, the international treaties and agreements to which the Socialist Republic of Vietnam is a signatory shall submits applications for approval of the programs or projects to the Ministry of Natural Resources and Environment through one of the following media: submitting in person, online or by postal service. An application for approval of the project includes:

a) An application form for approval of the program or project according to Form No. 03 of Appendix V issued herewith;

b) Documents of the program or project formulated according to guidelines of the Ministry of Natural Resources and Environment applicable to the regulations of The UNFCCC, treaties and agreements to which the Socialist Republic of Vietnam is a signatory;

c) A technical report or a verification report for the program or project of a particular verification authority according to guidelines of the Ministry of Natural Resources and Environment applicable to the regulations of The UNFCCC, treaties and agreements to which the Socialist Republic of Vietnam is a signatory;

d) A copy extracted from the master book or a certified true copy of each license and document relevant to specialized operation of the program or project according to applicable regulations.

3. The programs or projects according to carbon exchange and offsetting mechanisms shall be assessed and approved according to UNFCCC, the international treaties and agreements to which the Socialist Republic of Vietnam is a signatory.

a) Within 05 working days after receiving the application, the Ministry of Natural Resources and Environment shall decide whether to accept the application if it is valid, or request supplementation of the application if it is not valid. Deadline for supplementation of the application must not exceed 15 working days after a written request for supplementation of the application is issued;

b) Within 30 working days after receiving the valid application, the Ministry of Natural Resources and Environment shall assess the application for approval of the program or project through collection of opinions of relevant authorities. The enquired authorities shall be responsible for responding in writing within 7 working days after receiving the enquiry form attached with the application;

c) Within 03 working days after the assessment result is available, the Minister of Natural Resources and Environment shall consider and approve the program or project and notify the applicant . If the application is rejected, explanation must be provided.

4. The Minister of Natural Resources and Environment shall promulgate regulations on the assessment of programs or projects according to carbon exchange and balancing mechanisms within UNFCCC and appoint climate authorities change to act as standing agencies for assessment.

5. The entities prescribed in Clause 1 of this Article that carry out the program or project according to carbon exchange and balancing mechanisms beyond the scope of UNFCCC, the international treaties and agreements to which the Socialist Republic of Vietnam is a signatory on the territory of Vietnam shall:

a) Submit registration information to the Ministry of Natural Resources and Environment according to Form No. 04 of Appendix V issued herewith when they register the programs or projects;

b) Annually provide information about execution of the programs or projects to the Ministry of Natural Resources and Environment according to Form No. 05 of Appendix V issued herewith before December 31 during the period of executing the programs or projects.

Best Regards!