Vietnamese businesses will soon have the opportunity to trade carbon credits with the Singapore market following the implementation of a new bilateral cooperation agreement.
On the morning of September 16, the Ministry of Agriculture and Environment, on behalf of the Vietnamese Government, signed an online agreement with Singapore under Article 6 of the Paris Agreement on climate change.
Singapore – A Global Pioneer in Carbon Credit Markets
Singapore is one of the world’s pioneers in developing the carbon credit trading market. The country enacted its Carbon Pricing Act in 2019 and has since developed internationally recognized carbon credit exchanges such as CIX and ACX. Singapore is also positioning itself to become a global carbon finance hub.
Meanwhile, Vietnam is preparing to pilot its domestic carbon credit exchange until the end of 2028, before making it official in 2029.
What Are Carbon Credits?
A carbon credit is a tradable permit or certificate that grants the holder the right to emit one ton of CO₂ or an equivalent amount of another greenhouse gas listed in the international emissions reduction framework.
Agreement Expectations
Acting Minister of Agriculture and Environment Tran Duc Thang expressed his hope that the agreement will enable Vietnamese organizations and enterprises to develop greenhouse gas reduction projects, generate carbon credits in line with international standards, and transfer them to Singapore.
According to Mr. Thang, specialized agencies will provide guidance and finalize regulations to bring the agreement into effect as soon as possible. Vietnam and Singapore will also engage in technical-level exchanges to identify greenhouse gas reduction projects that align with both countries’ priorities.
Singapore’s Perspective
Grace Fu, Singapore’s Minister for Sustainability and the Environment and Minister-in-Charge of Trade Relations at the Ministry of Trade and Industry, emphasized that Vietnam is among the first Southeast Asian nations to sign such an agreement with Singapore.
She stated that the cooperation will enhance regional climate action, strengthen emission reduction efforts, and pave new pathways toward sustainable development.
Vietnam’s Carbon Credit Market Potential
According to the World Bank (WB), Vietnam has issued more than 22 million carbon credits since 2003, verified by international organizations such as Verra and Gold Standard. More than half of these credits were issued in the past year alone. Under the Clean Development Mechanism (CDM), Vietnam has been verified and has traded more than 40 million carbon credits to date.
Source: Gia Chinh / VnExpress
