Vietnam Announces Greenhouse Gas Emission Quotas for 2026 Covering 110 Power, Steel and Cement Facilities

On February 9, 2026, Deputy Prime Minister Tran Hong Haq signed Decision No. 263/QĐ-TTg, marking the first time Vietnam has officially implemented a pilot mechanism for allocating greenhouse gas (GHG) emission quotas. The Decision applies to a total of 110 facilities in high-emission industrial sectors.

Specific Quotas

According to the Decision, the total maximum allowable greenhouse gas emissions for 2025 are 243,082,392 tons of CO₂ equivalent. This figure will increase to 268,391,454 tons of CO₂ equivalent in 2026.

The current allocation applies to:

• 34 thermal power plants

• 25 iron and steel production facilities

• 51 cement production facilities

A greenhouse gas emission quota refers to the maximum amount of greenhouse gases that a country, industrial sector, or enterprise is permitted to emit within a specific period, typically calculated annually. It is an important regulatory tool to control and mitigate the environmental impact of production activities.

Clear Assignment of Responsibilities

The Ministry of Agriculture and Environment is assigned to take the lead, in coordination with the Ministry of Industry and Trade and the Ministry of Construction, to allocate specific quotas to each facility.

At the same time, the Ministry of Industry and Trade and the Ministry of Construction are responsible for monitoring and evaluating quota compliance by entities under their management.

Long-Term Implementation Roadmap

At a meeting held on December 24, 2025, to review and approve the total GHG emission quota for this phase, Deputy Prime Minister Trần Hồng Hà emphasized the seriousness of this pilot implementation.

Although it is an initial step to help enterprises become familiar with emission control requirements, the implementation process must be conducted professionally, with transparent legal regulations and without formality.

The 2025–2027 period will focus on finalizing mechanisms and policies in a synchronized manner and drawing lessons from the pilot phase. From 2028 onward, the emission quota management mechanism will be officially and mandatorily applied nationwide to all relevant sectors and enterprises.

Scientific Allocation Principles

The Deputy Prime Minister required that quota allocation be based on a solid scientific foundation, ensuring objectivity, fairness, and transparency.

Quotas are calculated based on multiple factors, including:

• Emissions per unit of product

• Growth and emission reduction targets of each sector

• Production and business plans

• Emission reduction potential

• Technical, technological, and financial capacity of each facility

Enterprises participating in the pilot program must proactively calculate their emissions and engage independent experts to assess and certify reported data.

This process goes beyond simply determining quota figures. It includes establishing a comprehensive system covering measurement methodologies, monitoring, data collection, reporting, verification, as well as legal and technical aspects in line with international standards.

Quota Trading Mechanism

Under Decree No. 119/2025/NĐ-CP issued in June 2025, facilities allocated emission quotas are entitled to trade greenhouse gas emission quotas and carbon credits on the Carbon Exchange in accordance with the prescribed roadmap.

This flexible mechanism enables enterprises to optimize emission reduction costs.

What Should Enterprises Do to Adapt?

Before the emission quota management mechanism becomes mandatory from 2028, enterprises should act promptly and prepare accordingly. This is not only a legal obligation but also an opportunity to enhance competitiveness in a global context increasingly focused on sustainable development.

Enterprises should:

• Invest in green technologies and improve energy efficiency

• Develop accurate emission inventory, monitoring, and reporting systems, or engage qualified greenhouse gas inventory consultants

• Participate in training programs on greenhouse gas management

• Proactively learn about emission quota and carbon credit trading mechanisms

• Develop long-term emission reduction plans aligned with corporate development strategies

Proactive adaptation from now will help enterprises avoid difficulties once the policy becomes mandatory, while also strengthening their competitive advantage in global supply chains that increasingly prioritize environmentally responsible partners.

For full details of the Decision, please refer to the Government’s Official Portal.