What are carbon credits and why are they being emphasized?
Climate change is a global challenge that forces countries and businesses to seek solutions to reduce greenhouse gas emissions. One of the most important tools currently available is carbon credits, which are seen as a financial mechanism to encourage green projects and help businesses meet their emissions reduction targets. Vietnam, with its commitment to achieving net-zero emissions by 2050 as part of COP26, must quickly adapt to this trend.
Carbon credits are units used to measure the amount of CO₂ or other equivalent greenhouse gases that have been reduced or removed from the atmosphere. Each carbon credit corresponds to one metric ton of CO₂ that has been reduced or absorbed. Businesses can buy and sell these credits on the market to offset excess emissions. The trading of carbon credits not only helps countries achieve emission reduction goals but also opens financial opportunities for businesses.
Carbon credits are becoming an essential tool in the global economy for several reasons. Developed countries like the European Union, the United States, and Japan are implementing carbon tax mechanisms and requiring businesses to purchase carbon credits to offset their emissions. A prime example is the EU’s Carbon Border Adjustment Mechanism (CBAM), expected to take effect in 2026, which will impose carbon taxes on imported goods from countries without appropriate emissions reduction policies. This will have a direct impact on key export sectors in Vietnam. Additionally, many multinational corporations are imposing stricter carbon emission requirements on their supply chains. If Vietnamese businesses fail to meet these emission standards, they may lose important partners in the international market.
Another crucial factor is the rising trend of green finance. International financial institutions are prioritizing funding for businesses with sustainable development strategies and low-carbon standards. Participating in the carbon credit market not only helps businesses meet environmental standards but also allows them to access funding at lower costs, improving their long-term financial advantage.
What should Vietnamese businesses do to adapt?
To remain competitive and take advantage of opportunities from carbon credits, Vietnamese businesses must proactively equip themselves with knowledge and prepare appropriate strategies. Meeting export standards is becoming increasingly important, especially for high-emission industries such as steel, cement, textiles, and leather. Without a specific emissions reduction plan, businesses will face difficulties in export, especially when the EU’s CBAM is officially implemented.
In addition to complying with international regulations, businesses can capitalize on financial advantages from the carbon credit market. By investing in emissions-reducing projects such as renewable energy, reforestation, or clean production, businesses can register and sell carbon credits on the international market, generating new sources of revenue. Moreover, achieving low-carbon standards helps businesses protect their brand and enhance their reputation in the market. Consumers are increasingly interested in environmentally friendly products, so businesses that implement sustainable development strategies will have a competitive edge in attracting customers and maintaining their position in international markets.
Opportunities and challenges businesses face
Participating in the carbon credit market offers significant opportunities for Vietnamese businesses. Not only does it create additional revenue from the sale of carbon credits, but it also allows businesses to access preferential capital from banks and international financial institutions. Many investment funds are currently giving special attention to businesses committed to emissions reductions, enabling them to access capital at lower interest rates and alleviate financial pressure during the transition to a sustainable business model.
Furthermore, achieving low-carbon standards allows businesses to maintain and expand market share in major export markets such as the EU, the United States, and Japan. As these countries tighten emissions regulations, businesses that meet the standards will have an advantage in retaining partners and expanding operations. The Vietnamese government is also building an internal carbon market under Decree No. 06/2022/ND-CP, allowing domestic companies to buy and sell carbon credits within Vietnam, reducing reliance on international markets and creating long-term incentives for sustainable development.
However, Vietnamese businesses also face numerous challenges. Currently, many businesses lack understanding of the carbon credit mechanism and do not have a reliable system for measuring emissions. The transition to a green production model also requires significant initial investment, which is challenging for many small and medium-sized enterprises. Furthermore, the domestic carbon market is still being developed, lacking a transparent trading platform and clear pricing mechanisms, making it difficult for businesses to access and fully leverage the benefits of carbon credits.
Solutions for Vietnamese businesses to leverage carbon credits
To overcome these challenges, businesses need to proactively raise awareness and invest in emissions measurement infrastructure. The government must also introduce appropriate supportive policies, such as implementing training programs on carbon credits to help businesses better understand how this market operates. Additionally, the establishment of a transparent and highly liquid carbon credit trading platform will enable businesses to easily participate and take advantage of opportunities in this market.
Moreover, financial policies that support businesses in the transition to green production are also essential. The government could implement support funds to ease the financial burden on businesses and incentivize the adoption of sustainable development models.
Conclusion
Carbon credits are not only a tool to help Vietnam fulfill its emissions reduction commitments but also an opportunity for businesses to enhance their competitiveness, access international markets, and attract green capital. However, to fully capitalize on this opportunity, Vietnamese businesses must quickly acquire the necessary knowledge, understand regulations, and develop appropriate transition strategies. With close collaboration between the government, businesses, and financial institutions, Vietnam’s carbon credit market could develop sustainably, providing real benefits to the economy and creating long-term value for the business community.
