Vietnam Approves Article 6 Carbon Credit Deal With Singapore

Vietnam's government has approved an implementation agreement with Singapore under Article 6 of the Paris Agreement, formalising a legal framework allowing Vietnamese organisations to develop greenhouse gas emission reduction projects, generate internationally recognised carbon credits, and transfer eligible credits to Singapore. The approval, issued through Resolution No. 235/NQ-CP on 14 August, finalises an agreement the two countries originally signed in Hanoi on 16 September 2025. Vietnam's Ministry of Foreign Affairs will handle diplomatic procedures to bring the agreement into force, while the Ministry of Agriculture and Environment leads domestic implementation.

 

Why the Nearly Year-Long Gap Between Signing and Approval Matters

 

The roughly eleven-month period between the original September 2025 signing and this August 2026 government approval indicates that formalising bilateral carbon trading agreements under Article 6 involves a genuinely extended domestic ratification process, even after the two governments have already reached and signed a bilateral agreement. That gap suggests the resolution issued this month represents a necessary but intermediate step rather than the point at which actual carbon credit trading between the two countries can begin.

Reinforcing that reading, the resolution itself does not contain detailed rules governing project approval, authorisation procedures, or credit issuance, with those operational details still to be established through separate implementation arrangements and Vietnam's broader carbon market regulations. That means genuine bilateral credit trading likely remains a further step or several steps away from this approval, since project developers would need the specific operational rules in place before they could actually begin generating and transferring credits under the new framework.

 

Why the Platts Price Movement Signals Market Anticipation

 

The Platts Singapore-eligible International Carbon Credits assessment rose to S$35.5 per tonne of CO2 equivalent in the week to 13 August, up S$2 from the prior assessment. Given the timing, that price increase in the same window as Vietnam's government approval suggests market participants may be pricing in anticipated future supply from Vietnamese projects becoming eligible under this new bilateral framework, even though the operational details enabling actual credit issuance remain unresolved. Price movements of this kind in still-developing bilateral carbon markets often reflect forward-looking market sentiment about future credit availability and quality rather than immediate, executable trading volume, since genuine credit generation typically requires considerably more regulatory groundwork to follow a government-level framework agreement.

 

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Why the Ghana Comparison Illuminates a Competitive Supply Dynamic

 

The article's reference to Singapore expecting its first letter of authorisation from Ghana later this year, alongside a developer with Ghanaian projects hoping to sell credits above S$40 per tonne "if Ghana is the sole country to secure the letter of authorisation in 2026," reveals a genuinely competitive dynamic among countries seeking to supply Singapore's carbon credit market. Singapore has structured its carbon tax regime to draw on internationally sourced, high-quality offsets through bilateral Article 6 agreements with multiple countries, and as more countries like Vietnam finalise their own frameworks and begin generating eligible credits, that expanding supply base could affect pricing for credits from any single country, including Ghana, whose developer's optimism about pricing above S$40 appears explicitly conditioned on Ghana remaining the only country with an active letter of authorisation.

That dynamic suggests Vietnam's progress toward operationalising its own agreement, even at this still-preliminary stage, is a relevant data point for market participants assessing supply-side competition across the broader emerging market of countries positioning themselves to sell Article 6 credits into Singapore's demand.

 

What the Range of Price Views Reveals About Market Uncertainty

 

The article cites a genuine spread of views on where carbon credit prices will settle: a Ghanaian project developer hoping for prices above S$40 under favourable single-supplier conditions, buyers maintaining bids in the S$30 to S$35 range, and a Singapore-based trader providing an indicative value of S$35 while noting buyers may resist paying above S$40. That spread reflects a market still working out fair value for a still-developing bilateral carbon credit trading structure, where the actual volume, quality and diversity of available credits remain uncertain and dependent on multiple countries' individual progress finalising their own domestic implementation frameworks, Vietnam's newly approved agreement being one data point within that broader, still-evolving picture.

 

What Comes Next

 

A Singapore-based market source quoted in the article noted uncertainty about whether Vietnam will prioritise specific sectors for its emission reduction projects, stating plainly "at this point, there is much to know." Whether Vietnam's Ministry of Agriculture and Environment establishes clear domestic implementation rules quickly enough to allow genuine project development and credit generation to begin, and whether Vietnamese credits entering the market alongside Ghana's anticipated supply affect the broader pricing dynamics Singapore's carbon credit buyers and sellers are currently navigating, will determine how significantly this approval ultimately shapes the supply side of Singapore's Article 6 carbon credit market.

 

Source: S&P Global