CT Group initiated its ASEAN Carbon Credit Exchange Joint Stock Company (CCTPA) on September 29, becoming the first Vietnamese company to begin a voluntary carbon emissions exchange in response to global trade policies and to promote a low-carbon emission economy.
The EU began piloting its Carbon Border Adjustment Mechanism (CBAM) in October, with the aim of ensuing a level playing field for European businesses by imposing carbon tax on imports from countries that do not apply equivalent carbon pricing measures.
The US is also set to impose a carbon tariff in 2024, and more major markets are expected to follow suit.
As a major exporter to both the EU and the US, Vietnamese companies should focus on ensuring that their products meet green standards to enhance their long-term competitive edge.
In this regard, the development of a carbon market is viewed as an effective tool to reduce environmental damage and promote sustainable development.
According to Hoang Bach Duong, Vice Chairman of CT Group, the establishment of a carbon market and green finance market is an inevitable trend to enhance businesses’ competitive capacity since meeting all requirements of carbon barriers that major markets are imposing will play a decisive role for the competition in the global supply chain.
The launch of the CCTPA will encourage firms to transition to cleaner technologies, thereby reducing emissions and helping Vietnam achieve its net-zero goal by 2050, she said. She also mentioned that the company will invest in studying the application of blockchain for carbon market to ensure the transparency in carbon credit management, allocation, transfer, and calculation.
The CCTPA will be the first company in the country that offers full consultancy for companies, organizations, and individuals in the development of carbon credit projects, carbon offset and credit mechanisms, and application of carbon tax in the region and the world.
Tang The Cuong, the Director of the Department of Climate Change under the Ministry of Natural Resources and Environment, said that the carbon market is key for the nation to realize its ambitious target of net-zero emissions by 2050. He further added that the carbon market will play a crucial role in reducing emissions at low costs.
At the launching ceremony, a cooperation deal was inked between the CCTPA with the Association for Safe Water and Environmental Sanitation, the Institute for Research on Development Communication, scientific research organizations and financial agencies with a view to creating measures for green transition.
According to the Government’s Decree 06/2022/ND-CP outlining the roadmap for domestic carbon market development, Vietnam is set to implement various activities until 2027.
These include developing regulations for carbon credit management, exchanging greenhouse gas emission quotas and carbon credits, and building regulations for operating the carbon credit exchange.
At the same time, Vietnam is planning to commence a pilot program for a carbon credit exchange from 2025, alongside capacity building activities and efforts to raise public awareness regarding carbon market development.