The carbon market plays a crucial role in supporting Vietnam’s efforts to fulfill its greenhouse gas (GHG) emission reduction commitments as outlined in its Nationally Determined Contributions (NDC). While the domestic compliance carbon market is entering its pilot phase—with its scope mainly applying to large emitters in sectors such as thermal power, steel, and cement—the Voluntary Carbon Market (VCM) presents broader opportunities for businesses across various industries.
Participation in the voluntary carbon market not only helps businesses generate additional financial streams from emission reduction activities but also promotes green transformation, the adoption of low-emission technologies, and enhances competitiveness both domestically and internationally. However, in practice, many businesses—particularly small and medium-sized enterprises (SMEs)—face significant challenges in accessing and implementing carbon credit projects.
One of the key obstacles businesses encounter when approaching carbon markets is the limited understanding of how these markets function. Many companies are still unclear about the differences between compliance and voluntary carbon markets, the relevant regulations, and operational mechanisms. Specifically, in the voluntary market, a significant number of businesses are unfamiliar with the procedures for registering and developing carbon credit projects.
Additionally, there is a general lack of technical knowledge about emission reduction technologies. The ability to access and adopt advanced technical solutions remains a hurdle, especially for SMEs. Data collection and management also pose considerable challenges. Establishing a Measurement, Reporting, and Verification (MRV) system to calculate and track emissions and reductions is still new for most companies and requires substantial resources. Furthermore, the costs associated with investing in emission reduction technologies, developing MRV systems, and registering carbon credit projects represent major barriers—particularly for SMEs that lack strong financial capacity.
Therefore, the government plays a pivotal role in developing the carbon market in Vietnam and helping businesses overcome these barriers. Through various surveys assessing the private sector’s readiness to participate in carbon markets, many businesses have emphasized the importance of a clear and transparent legal framework with specific regulations and guidelines for market participation.
One of the biggest barriers currently faced by businesses is financial. Financial institutions and banks can play a crucial role in supporting emission reduction initiatives. To optimize support resources, the government needs to improve the green finance policy framework and provide clear criteria for projects and initiatives that are eligible for support from financial institutions.
At present, Vietnam lacks an official platform that serves as an information hub, connection point, and guidance center for businesses interested in carbon markets. This makes it difficult for companies to access reliable information, find reputable consulting partners, and assess the feasibility and financial benefits of carbon credit projects. Many businesses remain unsure whether participating in the VCM will deliver real economic returns.
To effectively support businesses in engaging with the voluntary carbon market, it is essential to build a supportive ecosystem for carbon market development. This ecosystem should include a network of researchers, experts, consulting organizations, and businesses. It would serve as a knowledge bridge for carbon markets, share advanced technological solutions, and connect project developers with investors, project developers, and potential carbon credit buyers.
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