Vietnam has officially launched a pilot Emissions Trading Scheme (ETS) that will cover approximately 50% of the country’s total CO₂ emissions through 2029, reinforcing its commitment to ESG goals and […]

Vietnam has officially launched a pilot Emissions Trading Scheme (ETS) that will cover approximately 50% of the country’s total CO₂ emissions through 2029, reinforcing its commitment to ESG goals and a carbon neutral strategy aligned with its Net Zero 2050 target. 

The ETS applies to major carbon-intensive sectors: steel, cement, and thermal power. Companies will receive emission allowances based on carbon intensity, with the first batch of permits for 2025–2026 issued by the end of 2025. Businesses exceeding their quotas must purchase carbon credits to stay compliant, while up to 30% of emissions can be offset through verified low-carbon projects. 

While the scheme’s pilot phase is designed to help businesses acclimate to the new system, it represents a major policy shift in Vietnam’s decarbonization journey. The ETS introduces market-based incentives for emissions reduction and lays the groundwork for integration with international carbon markets. 

The move comes amid a surge in emissions, with coal-fired electricity increasing 18% and crude steel production rising 15% in 2024. Recognizing this rapid growth, the government views the ETS as a key tool for steering industries toward sustainable operations without compromising development goals. 

By adopting a phased implementation and initially offering free allowances, Vietnam aims to strike a balance between economic competitiveness and environmental responsibility. As the scheme evolves, it is expected to expand into additional sectors such as transport and commercial buildings. 

This bold initiative signals Vietnam’s proactive approach to ESG integration, carbon pricing, and sustainable development. It not only enhances regulatory clarity for industries but also strengthens Vietnam’s position as a responsible player in the global climate arena—turning policy ambition into actionable impact under its broader carbon neutral strategy. 

Source: 

https://esgnews.com/vietnam-launches-emissions-trading-scheme-covering-half-of-national-co2-output/