VCI Legal – May 30, 2026

On May 21, 2026, the Government officially issued Decree No. 180/2026/ND-CP regulating forest carbon sequestration and storage services, effective from July 15, 2026. This is a landmark milestone, laying the first solid legal brick for the shaping, operation, and commercialization of forest carbon credits in Vietnam. 

For the business sector — including green project investors and units wishing to buy credits to offset emissions — Decree 180/2026/ND-CP is not just a pure normative document, but a “map of opportunities” with legal boundaries that must be understood. 

Decree 180/2026/ND-CP standardizes the concepts of “forest carbon credits” and “forest carbon projects” for the first time in a specialized document. This mechanism works based on valuing the forest’s ability to clean up the environment, turning it into an exchangeable commodity. 

Businesses can access this market through the following core activities: 

• REDD+: Reducing emissions from deforestation and forest degradation. 

• Replanting and restoration: Planting new forests, zoning off for natural regeneration. 

• Sustainable management: Enhancing the carbon stocks of existing forest areas. 

Instead of general regulations on environmental protection, Decree 180/2026/ND-CP focuses on creating a transparent trade corridor for businesses through three major strategic changes. 

First, it lies in the unleashing of capital flows through the ownership linkage mechanism. In the past, the biggest barrier to forestry projects was that the forest land use rights and governance capacity of actual forest owners (usually households, communities, or protection forest management boards) were not sufficient to access international green finance standards. The new Decree has officially removed this bottleneck by allowing and encouraging forest owners to cooperate, joint venture and associate with enterprises and organizations to invest externally. This opens great opportunities for multinational corporations and private equity funds to implement a direct investment strategy. Businesses can contribute capital flows, technology, and governance capacity in exchange for ownership or a corresponding share of carbon credits. This model not only helps optimize the economic value of forests but also creates a stable, reasonably cost-effective credit supply for businesses themselves in the long term. 

Second, is the diversification and standardization of financial transaction methods. To protect the integrity of the market, the Decree establishes two clear channels of access: entrustment through the Forest Protection and Development Fund under state-protected contractual terms, or direct trading on the National Carbon Credit Exchange. The emergence of these institutions helps to completely eliminate the legal risks of the “black market” nature or spontaneous transactions that were easy to lead to disputes in the past. Clarity in terms of distribution channels makes it easy for businesses to value assets, plan emissions offset costs into annual operating costs and protect investment capital flows against political fluctuations or land-related civil disputes. 

Third, and the most important to bring Vietnamese agricultural products and goods to the world, is the synchronization with international standards to prevent the trap of “Double Counting”. This legal document mandates all projects to establish and comply with an independent and transparent Measurement, Reporting and Appraisal (MRV) system. By standardizing this technical process, the Government ensures that each ton of CO2 captured is only identified and issued a unique credit code on the national registration system. This is the solution to the problem of the prestige of Vietnam’s forest carbon credits in the international arena. The transparency of the MRV mechanism makes it easy for domestic credit products to achieve prestigious international certifications such as Verra or Gold Standard, thereby allowing businesses to conduct cross-border transactions, transfer abroad in foreign currencies or directly use them to overcome strict technical barriers such as the Carbon Border Adjustment Mechanism (CBAM) of the European Union. 

Roadmap for Implementing a Forest Carbon Project 

For businesses that are oriented to become project developers or want to create their own internal carbon credit supply to optimize ESG costs, mastering the implementation roadmap plays a decisive role in the success or failure of capital flows. This process requires close coordination between forestry techniques, green finance, and administrative legal procedures through five successive stages. 

• Phase One: Establishment of Cooperation and Survey of Forestry Areas  

Enterprises need to coordinate with local resource management agencies and forest owners to conduct zoning, accurately determine the location, area, and legal boundaries of the target forest land fund. This is an important technical screening step to assess current carbon stocks, measure plant growth, and forecast future biomass growth potential. This stage is also the time when enterprises must assess the legality of forest land use rights, ensure that forest areas are not included in disputed plans or conservation programs that have received state budgets, in order to avoid conflicts of interest in the future. 

• Phase Two: Project Design Document (PDD) 

This is considered the technical and legal backbone structure of the entire project. In this document, you must demonstrate the feasibility of interventions — whether it is REDD+ (deforestation reduction), reforestation or sustainable forest management. More importantly, PDD must convincingly explain two sets of core criteria of international green finance: “Additionality” and Social and Environmental Safeguards. Enterprises need to clearly define the applied measurement methodology (according to national standards or international organizations) to serve as a basis for calculating the expected emission reduction. 

• Stage Three: Independent Due Diligence and Approval Registration 

After completing the PDD document, enterprises are required to hire competent Independent Validation and Verification Bodies (VVBs) to conduct an objective assessment of all technical documents as well as field surveys. The appraisal unit will issue a report confirming that the project fully meets scientific and legal standards. Based on this result, the enterprise submits a dossier to the competent state management agency (or the international registration system) to officially register the project in the National Database on Emission Reduction, establishing the legal status of the project. 

• Phase Four: Field Operation and Periodic Measurement (MRV System) 

At this stage, businesses deploy capital flows into practical activities such as forest protection patrols, application of anti-logging monitoring technology, and application of forestry techniques to improve the carbon stock of crops. According to the prescribed cycle (usually annual or biennial), the enterprise must implement the MRV process: self-measure the additional carbon mass, prepare a monitoring report, and continue to invite an independent unit to verify the actual emission reduction results that the forest has achieved compared to the initial baseline emissions scenario. 

• Phase Five: Issuance and Commercialization of Forest Carbon Credits 

Once the monitoring report is approved and accepted by the management agency, the actual emission reduction will be officially digitized and issued as corresponding “forest carbon credits” to the project’s account. This final stage realizes the financial model of the business. Depending on the initial agreement, these credits will be divided between businesses and forest owners, then put on public exchanges, entrusted for sale through the Forest Protection Fund or directly offset by the enterprise’s internal emission obligations to complete the value chain of a green investment project. 

Decree 180/2026/ND-CP is the opening shot, turning “production forests and protection forests” into true “green money printing factories”. The sooner a business moves, the greater the competitive advantage in the ESG (Environmental-Social-Governance) era. 

KEY TAKEAWAYS  

• Asset to green resources: Forests are no longer static assets. The carbon sequestration capacity of forests has been officially legalized as a “new type of forest environmental service”. Businesses that invest in forests have the right to own a legal financial asset: carbon credits. 

• Diversify access channels: Businesses that need to offset emissions (to export goods to the EU, the US or achieve the Net Zero goal) now have a legal basis to buy directly from the exchange or entrust through the Forest Protection Fund, completely eliminating the legal risks of the previous “black market” market. 

• Standardization for integration: The mandatory application of the measurement, reporting and appraisal (MRV) system means that Vietnam’s forest carbon credits will have a “passport” to participate in global supply chains. 

Recommendations for Businesses 

• For large emitting enterprises (Iron and Steel, Cement, Energy, Textiles, etc.): It is necessary to proactively review total emissions and make a budget for the purchase of forest carbon credits from July 2026 in anticipation of the upcoming emission ceiling regulations. Buying early through forward carbon contracts can help optimize costs when the market is scarce. 

• For Investors/Financial Funds: When signing cooperation contracts with forest owners who are households or residential communities, special attention should be paid to the “Benefit-sharing mechanism”, which must be transparent to ensure livelihoods for indigenous people — this is also a prerequisite for international organizations to recognize project credits. 

• Risk of “Duplicate Contributions”: Businesses need to clarify with forest owners and local authorities whether the carbon sequestration of that forest has been included in Vietnam’s Nationally Determined Contribution (NDC). If it is already in the national NDC quota, the enterprise may not be allowed to sell that credit to the international market or use it to compensate for its own obligations. 

• Commitment to “Long-term Sustainability”: Decree 180/2026/ND-CP requires the parties to have a plan to set up a “Buffer Pool” to compensate for carbon lost due to force majeure events (forest fires, landslides, diseases that kill trees). Businesses need to include this risk management cost in the project’s financial model. 

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