Crucial aspects of carbon exchange pilot operation

Solutions must be prepared for Vietnam to ensure legal and regulatory certainty, technical infrastructure, system interoperability, and sustained capacity building for the operation of the pilot phase of its carbon trading exchange.

- By Michael Mehling

Through the process of accompanying legal agencies and consultancy units to build the carbon trading exchange (CTX) for the domestic market, I see that Vietnam currently has a complete legal framework to take it into pilot operation. However, there are some recommendations to help the operation go ahead.

Existing securities infrastructure such as the Hanoi Stock Exchange (HNX), Vietnam Securities Depository and Clearing Corporation (VSDC), and the State Securities Commission of Vietnam is sound, but requires significant adaptation for compliance-driven carbon market dynamics. Besides that, the dual-governance model between the Ministry of Finance (MoF) and the Ministry of Agriculture and Environment (MAE) requires a binding inter-agency coordination protocol to prevent regulatory ambiguity and delayed crisis response.

The legal nature of carbon units remains ambiguous under civil, commercial, and tax law, creating uncertainty on accounting, taxation, and collateral use. Furthermore, it is essential to implement sustained training, simplified tools, and a dedicated helpdesk for market readiness to remove capacity gaps across all stakeholder groups.

The above findings are necessary because, without a foundation for the legal nature of carbon units in collaboration with the absence of binding inter-agency protocols and gaps in implementing guidelines, all other market development efforts will face avoidable obstacles, and the CTX will not function as intended.