What Vietnam actually approved and why the 90% threshold is a market signal, not a footnote
Decree 112/2026/NĐ-CP, effective 19 May 2026, sets a clear legal corridor for international transfer of greenhouse gas emission reduction results and carbon credits under the Paris Agreement’s Article 6. The practical headline is not just “export allowed”. It is “export allowed, but only after national registration”, which puts traceability and compliance controls at the center of any cross-border deal.
National registration before transfer matters because it changes the order of operations for developers and buyers. You cannot treat authorization and tracking as a back-office step after issuance. You need a pathway that is compatible with government oversight from the start, especially if the end goal is an Article 6-aligned unit rather than a conventional voluntary credit.
The “up to 90% transferable” rule is designed as industrial policy, not a blanket export permission. Vietnam’s framework distinguishes between projects using new, high-cost, or uncommon technologies and projects that are already widely deployed. For the first category, transferability can be up to 90%. For more common project types, the transferable share can be limited to 50%, explicitly preserving more reductions for domestic priorities.
That split turns the percentage into a market signal about what Vietnam wants to attract. If a project can credibly qualify as high-cost or uncommon, the exportable pipeline is potentially much larger. If it is a mainstream activity, the exportable volume can be structurally capped, even if the project performs well technically.
International buyers should read this as “supply is policy-shaped”. The headline volume is not only a function of methodology and performance. It also depends on whether the project proponent can demonstrate eligibility for the higher transferability tier, and whether the project clears national registration and authorization steps.
Developers and trading desks should treat the 90% threshold as a proxy for approval probability and policy preference. It belongs in the term sheet. Contracts will need explicit language on transferable quota, true-up mechanics if the quota is revised, and conditions precedent tied to registration and authorizations. In practice, this is authorization gating: delivery is not only about issuance, it is about permission to move units internationally.
Once you accept that export is now governed by a registry-first framework, the next question becomes where this sits inside Vietnam’s broader carbon market build-out. That bigger architecture is what will ultimately shape fungibility, domestic pricing, and the opportunity cost of exporting units.
Decree 06 in context: how Vietnam is building a carbon market architecture from project credits to compliance demand
Decree 06/2022/NĐ-CP is the backbone for Vietnam’s greenhouse gas management framework, and it is where the ETS roadmap and market infrastructure begin to make sense as a single system. Recent moves, including the domestic exchange framework and the international transfer rules, look like extensions that operationalise what Decree 06 set in motion.
Decree 29/2026/NĐ-CP, effective 19 January 2026, is a major institutional step because it establishes a centralized domestic carbon exchange with financial-market style infrastructure. VietnamPlus reports the Hanoi Stock Exchange (HNX) will organize trading, while VSDC will handle depository, clearing, and settlement. For market participants, that matters because it points to standardization, delivery-versus-payment mechanics, and more formal risk controls than ad hoc OTC transfers.
Vietnam also appears to be building origination capacity before full compliance demand arrives. VietnamNews reports that by August 2025, the national registry had more than 30 million credits from 158 projects, with projections reaching around 70 million by 2030. Those numbers do not guarantee exportable supply, but they do suggest a meaningful base of project activity and administrative experience with crediting.
For operators, the end-to-end architecture is becoming clearer. The workflow described in legal and market commentary looks like: MRV and issuance, then coding and national registration, then custody and trading accounts that resemble securities account models, and then either domestic trading or potential export under the international transfer rules. This reduces operational friction in some places, but it raises the bar on compliance, documentation, and process discipline.
This is the point where pricing starts to become more than a voluntary market question. Once a registry and exchange exist, the variable that “turns on” domestic demand is the ETS timeline, including when caps tighten and when quota management becomes mandatory.
The ETS timeline explained: pilot phase 2025–2027, mandatory phase after 2028, and what gets covered
Vietnam’s ETS timeline is best understood as a phased demand ramp that can change the opportunity cost of exporting credits. ICAP describes a pilot phase running from June 2025 through December 2028, which is a long runway where rules, allocation, MRV practices, and enforcement can evolve before full-scale mandatory operation.
Domestic policy communications point to a more operational framing: VietnamPlus reports a pilot focus through 2027, with nationwide mandatory management of emission quotas launched from 2028. For buyers and developers, the key takeaway is not the exact wording. It is that domestic compliance demand can start influencing behavior before a fully liquid market exists, especially if covered entities anticipate tighter conditions.
Initial coverage in the pilot includes thermal power, cement, and iron and steel. Enerdata reports the pilot is designed to cover a large share of emissions, often cited around 50% of CO₂ emissions, and it focuses on large emitters. Even without relying on any single percentage, the direction is clear: the ETS is being built around sectors that can generate meaningful compliance demand and where MRV can be institutionalized.
Cap setting signals matter because they shape expectations of scarcity and future domestic price discovery. VietnamPlus reports indicative quota reductions versus expected emissions for 2025–2026, including ranges for power, steel, and cement. Even modest tightening can affect how companies value domestic units, and how regulators think about retaining reductions inside the country.
Once an ETS starts creating domestic scarcity, the export rule becomes a balancing mechanism. The next question is who effectively “keeps” the non-exportable share, and how that retained volume is used to support national targets and domestic market development.
Who gets to keep the remaining 10%: domestic allocation, national targets, and the politics of retaining value at home
The retained share should be read as a domestic set-aside that serves multiple functions. The Saigon Times frames the rule as requiring national registration for international transfers, and the retention logic aligns with building credible national accounting, supporting NDC-related needs, and ensuring there is domestic availability for offsetting or compliance as the ETS becomes more binding.
The policy is also not simply “90% export, 10% domestic”. Some projects can be capped at 50% transferability, which means domestic allocation can be materially higher in mature or widely deployed project categories. That creates a structural difference between exportable and retained units, and it can lead to a pricing wedge if domestic demand strengthens.
For domestic market development, retention can act as a lever to finance transition priorities. If Vietnam wants to pull in new or high-cost technologies, allowing higher exportability for those categories can improve project economics. At the same time, retaining more volume from common project types can reduce the risk of domestic shortage when quota management becomes mandatory from 2028, as VietnamPlus reports.
For international buyers, the retained share is also a signal about authorization selectivity. VnEconomy’s reporting on the “up to 90%” rule implies discretion and criteria. In practice, export authorization may be more likely where Vietnam sees co-benefits such as technology transfer or green finance, while standard projects may face stronger pressure toward domestic retention.
This is where Article 6 mechanics become central. Export is not just a logistics question. It is about whether units can be authorized as ITMOs, how corresponding adjustments are handled, and how contracts allocate the risk that authorization or transferability changes.
Implications for international buyers and developers: ITMO potential, authorization risk, and contract terms to watch
Article 6.2 ITMOs require more than a credit issued under a voluntary standard. They require government authorization and accounting that avoids double claiming, typically via corresponding adjustments. The cooperative mechanisms under Article 6 are designed to enable cross-border transfers, but only if the host country and acquiring party follow agreed accounting and authorization steps.
Decree 112/2026 makes authorization risk commercially concrete because transferability is explicitly capped and category-dependent. If a project is treated as common and capped at 50%, an offtake that assumed 90% exportable volume can break economically. That risk belongs in ERPAs and offtakes as conditions precedent, representations about eligibility as high-cost or uncommon, and fallback pathways if ITMO authorization is not granted.
Fallbacks should be explicit rather than implied. A deal can be structured to deliver VCM-only credits if ITMO authorization is delayed or denied, or to pause delivery until authorization is secured, or to reallocate volumes between domestic and export tranches. What matters is that the contract does not pretend that “issuance equals transferability”.
Domestic market infrastructure can also influence pricing and settlement expectations. Commentary on the exchange framework highlights that with HNX trading and VSDC clearing and settlement, domestic prices could become more observable. For global buyers, that can affect floor and ceiling negotiations, indexation concepts, and even the definition of delivery point, whether delivery is at the registry level or via an exchange-linked mechanism.
A practical due diligence checklist follows naturally from Vietnam’s direction of travel. VietnamNews reporting on the domestic market foundation supports focusing on: national registry status, project category and its likely transferability tier, MRV plan and verifier readiness, clauses addressing suspension or revocation of transfer permissions, and change-in-law protections given the ETS ramp from 2025 to 2028 and tighter conditions after 2028.
Once the deal mechanics are clear, the remaining question is timing. Monetization depends on implementing guidance, registry and exchange readiness, MRV capacity, and the first credible signals of price discovery.
What to monitor next: implementing guidance, registry readiness, MRV capacity, and early price discovery signals
Implementing guidance will decide how real the 90% headline is in practice. VnEconomy’s reporting makes the effective date clear, but the market will need detailed criteria for what counts as high-cost or uncommon, how national registration for international transfers works step-by-step, and what timelines apply. This is where the 90% versus 50% boundary becomes enforceable rather than rhetorical.
Registry and exchange go-live milestones will determine transaction lead times and costs. VietnamPlus reporting on the domestic exchange framework points to HNX and VSDC roles, but participants will care about account opening requirements, custody and trading account mechanics, and delivery rules. If delivery requires specific coding, custody movements, or settlement windows, that will affect how buyers schedule retirements and how developers manage working capital.
MRV capacity building is a gating factor for both compliance integrity and ITMO bankability. VietnamPlus reporting on the move toward mandatory quota management from 2028 implies a need for regulator-grade MRV. Market participants should watch practical indicators such as the availability of accredited verifiers, the quality and consistency of inventory datasets, and whether audits reveal recurring issues that could slow issuance or trigger reversals.
Early price discovery signals will likely show up as spreads and premiums rather than a single benchmark price. Watch for differences between retained and exportable units, premiums for “authorization-ready” volumes, discounts reflecting corresponding adjustment uncertainty, and liquidity indicators on the domestic exchange as it becomes operational. Those signals should be interpreted alongside ETS tightening expectations for 2025–2026 and the shift to mandatory quota management from 2028.
Supply pipeline reality checks should stay grounded in official and credible reporting. VietnamNews’ figure of more than 30 million credits from 158 projects by August 2025 provides a baseline for tracking growth. The key is not only whether issuance grows toward projected 2030 levels, but also how retention rules redistribute volumes between export and domestic use as the ETS becomes a stronger demand center.
