Vietnam: big steps toward intensity-based ETS, setbacks in timeline

Throughout 2024, Vietnam has been intensifying its efforts toward carbon trading, with the latest version of an emission trading system decree aiming for establishment and implementation by the end of 2027. Successive revisions of the decree have increasingly defined elements such as the system’s scope, banking/borrowing rules and offset use – but the timeline for entry into force has gotten pushed back due to lack of capacity for Monitoring, Reporting and Verification (MRV). Planned to begin operating in 2028, Vietnam ETS caps emissions per unit of production from entities in power, iron & steel, and cement sectors while allowing banking, some types of borrowing, and more generous offset provisions for covered entities only.