On 1 April 2026, the Government issued Decree 112/2026/ND-CP on international transfer of greenhouse gas emission mitigation outcomes and carbon credits (“Decree 112”). Decree 112 establishes the essential legal architecture for the international transfer of carbon credits and Internationally Transferred Mitigation Outcomes (ITMOs) under Article 6 (specifically 6.2 and 6.4) of the Paris Agreement. This is a vital catalyst for the commercial viability of renewable energy and green infrastructure projects in Vietnam. Key highlights:
- Clear Framework for International Transfers: Decree 112 explicitly outlines the mechanisms for transferring emission mitigation outcomes between Vietnam and international partners. It authorizes the Ministry of Agriculture and Environment to issue formal letters of authorization for international transfers, ensuring sovereign backing for credit export.
- Defined Transfer Ratios & Corresponding Adjustments: To balance national climate commitments with investor returns, Decree 112 establishes maximum transfer ratios for carbon credits subject to corresponding adjustments:
- Up to 90% transfer allowance for specific priority programs outlined in List 1 of Decree 112.
- Up to 50% transfer allowance for programs under List 2 of Decree 112.
- Enhancing Renewable Energy Bankability: For developers navigating the financial structures of solar, onshore wind, and offshore wind power, as well as emerging green hydrogen facilities, the ability to monetize and export carbon credits provides a highly lucrative financial lever. This directly supports the underlying economics of corporate Power Purchase Agreements (DPPA/VPPA) and strengthens project bankability for foreign lenders.
- Strict Compliance and Registration (Article 6.4): Projects seeking to operate under the Article 6.4 Mechanism must register directly through the National Public Service Portal or the Ministry of Agriculture and Environment, ensuring alignment with standardized United Nations Framework Convention on Climate Change (UNFCCC) guidelines.
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For more information on the above, please do not hesitate to contact the author Dr. Oliver Massmann under [email protected]. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
