Policy framework
- National Climate Change Strategy to 2050, approved by Prime Ministerial Decision No. 896/QD-TTg of 26 July 2022. It targets net zero emissions by 2050, with emissions peaking in 2035 and declining rapidly thereafter. By 2050, compared with business-as-usual, emissions are to fall by 91.6% in energy, 63.1% in agriculture, 90.7% in waste and 84.8% in industrial processes, while land use, land-use change and forestry is to increase removals to reach net emissions of at most minus 185 MtCO2e. By 2030, methane emissions are to fall by 30% from 2020 levels. The Strategy also requires facilities emitting 200 tCO2e or more per year to reduce emissions.
- Updated Nationally Determined Contribution (NDC), 2022: by 2030, a 15.8% reduction in total emissions against business-as-usual (146.3 MtCO2e) with domestic resources, rising to 43.5% (403.7 MtCO2e) with international support in finance, technology and capacity building. In early 2026, Viet Nam was finalising NDC 3.0 for 2026–2035.
- Domestic carbon market: Decree 119/2025/ND-CP and Decree 29/2026/ND-CP govern emission quota allocation and the trading platform, starting with thermal power, iron and steel, and cement (see our separate note on the domestic carbon market).
Implications for investment projects
- Inventory and reduction: facilities required to carry out GHG inventories face tightening obligations, including inventories, mitigation plans and participation in the carbon market once quotas are allocated.
- Lender requirements: IFC Performance Standard 3 requires annual quantification above 25,000 tCO2e per year; the Equator Principles (EP4) require a climate change risk assessment and an analysis of lower-emission alternatives for projects above 100,000 tCO2e per year. The World Bank and ADB assess climate risk and Paris alignment during project preparation.
- Transition and physical risk: international investors increasingly consider both transition risk (policy, carbon pricing, technology) and physical risk (flooding, heat, drought) from the feasibility stage.
Emission estimates, mitigation options and climate risk assessment are therefore best built into the EIA, ESIA and feasibility study from the outset, rather than added once lenders ask for them.