To accelerate the implementation of national commitments on climate change and environmental protection, on June 9, 2025, the Government officially issued Decree No. 119/2025/ND-CP (referred to as Decree 119).

This Decree amends and supplements several provisions of Decree No. 06/2022/ND-CP (Decree 06) regarding greenhouse gas (GHG) emissions reduction and ozone layer protection, thereby completing the legal framework for operating the carbon market in Vietnam.

Decree 119 takes effect from August 1, 2025, and includes many critical regulations directly impacting businesses, especially those in high-emission sectors such as industry, construction, energy, and transportation.

Key contents of Decree 119/2025/ND-CP include:

1. Implementation of GHG emissions quota allocation starting in 2025

Decree 06 originally planned for the issuance and allocation of total GHG emissions quotas starting from 2026. However, Decree 119 accelerates this by requiring quota allocation to begin in 2025. Accordingly:

• In 2025 and 2026, GHG-intensive facilities such as thermal power plants, iron and steel manufacturers, and cement producers must conduct GHG inventories and will be allocated GHG emissions quotas. The quota allocation will be piloted at the facility level, implemented immediately, and precedes the Prime Minister's official approval of the total GHG emissions quotas by period and annually.

• From 2027 to 2030, additional facilities and annual quota allocations will be proposed. During 2025–2030, facilities receiving quotas must implement emissions mitigation measures in line with their allocated quotas. Facilities not yet allocated quotas must still develop and implement facility-level emissions mitigation plans.

2. Establishment of a National Registry System for GHG Quotas and Carbon Credits

Similar to securities depositories in the stock market, Decree 119 introduces the establishment of a National Registry System to support trading GHG emissions quotas and carbon credits on the carbon exchange.

This system will manage, operate, update, and provide ownership information on quotas and credits, and facilitate borrowing, surrendering, transferring, and offsetting of emissions. A centralized registry will ensure transparency and efficiency for carbon market transactions.

3. Adjustment of the domestic carbon market development roadmap

3.1 Postponement of the carbon exchange launch

Decree 06 had set out the roadmap for piloting the carbon exchange starting in 2025. However, this timeline lacks sufficient implementation grounds.
Decree 119 adjusts the milestones as follows:

By the end of 2028:

• Complete the National Registry System;
• Pilot the domestic carbon exchange;
• Implement mechanisms for domestic carbon credit trading and offsetting.

From 2029:

• Conduct GHG quota auctions;
• Officially operate the domestic carbon market and integrate with the global carbon market.

4. Flexibility in selecting methodologies for generating carbon credits in domestic offsetting projects

4.1 Eligible methodologies

Applicable methodologies include:

• Those defined, approved, and published by relevant ministries on the National Registry System and their websites;

• Those recognized under the UNFCCC for Article 6.4 of the Paris Agreement, reviewed and approved by Vietnamese authorities;

• Other methodologies proposed by organizations/individuals and approved by relevant ministries.

4.2. Proposal for methodology approval

From January 1, 2028, organizations and individuals may submit proposals to competent ministries for methodology approval.

Proposals will be reviewed based on implementation goals, emission calculation methods, technical feasibility, and scalability. If approved and published, proponents may charge royalties for their use per IP and related laws.

4.3. Registration of chosen methodologies

From the effective date of Decree 119, organizations and individuals can register selected methodologies with the relevant ministries for use in domestic offsetting projects. Ministries will review the GHG reduction measures, methodology, and monitoring parameters. Approved projects will be published in the National Registry System.

5. Legal framework for trading GHG quotas and carbon credits in the domestic market

5.1 Trading

• Trading is conducted on the carbon exchange;

• Permissible tradable instruments include:

  • GHG quotas allocated to facilities;

  • Carbon credits issued for verified GHG reductions since January 1, 2021, under domestic and international offsetting mechanisms.

5.2 Surrendering of GHG quotas

Facilities with allocated quotas must surrender to the State an amount equal to their verified direct emissions during the allocation period, minus any offsets.

They may use trading, borrowing, transferring, or carbon credit offsets to fulfill their obligation. Failure to do so results in penalties and deduction from future allocations.

5.3. Borrowing GHG quotas

Until 2030, facilities may borrow up to 15% of their next-period quotas but cannot trade borrowed quotas.

5.4. Transferring GHG quotas

Unused quotas after surrendering may be carried over to the next period and traded.

5.5. Offsetting GHG quotas using carbon credits

Facilities may offset up to 30% of their allocated GHG quotas using carbon credits from eligible projects.

→ Details of Resolution 119/2025/ND-CP: see here

6. What should businesses do now?

To avoid falling behind, Vinacontrol recommends the following key actions:

• Comprehensive assessment: 

Review operations, conduct GHG inventories, and identify emission reduction opportunities.

• Capacity building:

Train internal teams on GHG inventory methods, carbon finance, and regulatory compliance.

• Carbon strategy planning:

Develop a roadmap for choosing optimal actions – invest in technology, purchase quotas, or generate carbon credits.

7. Vinacontrol – Your Partner on the Green Transition Journey

As Vietnam’s leading and longest-established conformity assessment organization, Vinacontrol offers a comprehensive service ecosystem supporting businesses across all steps: from GHG inventory and mitigation planning to report verification and international-standard carbon credit development consulting.

With solid expertise and deep regulatory knowledge, Vinacontrol is ready to help your business meet sustainability goals and access billion-dollar carbon market opportunities.

→ Explore our tailored solutions for your business: click here

For any service inquiries, please contact Vinacontrol via Hotline/Zalo: +84 243 943 3840 for the best consultation and support!