CARBON MARKET: Australia Commits to Partnership

Speaking at the Forum "Enhancing Policy Frameworks and Strengthening Enterprise Capacity for Participation Carbon Market", Ms. Cecilia Brennan, Economic Counselor at the Australian Embassy and representative of the Australian Department of Foreign Affairs and Trade (DFAT) noted that this is a pivotal moment. Vietnam has made significant strides in establishing the legal and institutional foundations for its domestic carbon market, and the focus is now shifting toward the implementation phase.

The forum was chaired and organized by the Vietnam Chamber of Commerce and Industry (VCCI), with technical assistance and support from international partners, including the Australian Department of Foreign Affairs and Trade and the Aus4Growth Program. The event was executed by the Business Forum Magazine and the VCCI’s Institute for Enterprise Technology and Innovation.

Ms. Brennan said: “This forum comes at a pivotal moment. Vietnam has made substantial progress in establishing the legal and institutional foundations of its domestic carbon market, and attention is now turning decisively toward implementation.”

A well-functioning carbon market can play a vital role in mobilising finance, enabling cost-effective emissions reductions, and enhancing enterprise competitiveness, while supporting Vietnam’s long-term development and climate objectives.

According to her, for businesses, this transition brings new obligations, but also significant opportunities: to innovate, to strengthen market position, to attract investment, and to engage confidently in both domestic and international carbon markets.

Australia is proud to be a long-standing and trusted partner of Vietnam. Over more than fifty years, Australia has contributed over AUD 3 billion to Vietnam’s development, with a strong and consistent focus on sustainable economic growth, and human capital development, Ms. Brennan noted. Since both our countries committed to net zero emissions by 2050, strengthening cooperation on climate, environment and energy has become a central pillar of our bilateral partnership.

Elaborating on practical cooperation, turning this strategic and high-level commitment into action, Australia has been providing support to Vietnam through several technical and financial platforms.

Specifically, through the Business Partnerships Platform (BPP), Australia has invested over AUD 9.4 million in Vietnam since 2016. In 2022, it launched six new multi-stakeholder partnerships to test novel approaches in voluntary carbon markets, such as nature-based solutions and low-emission rice production.

In the Mekong Delta, we are supporting low emission rice production through targeted financing, applied research, and technical cooperation most notably through the Transforming Rice Value Chains project and broader climate smart agriculture partnerships. And through the Australia Climate Finance Partnership, Australia is working to mobilise private investment and derisk climate related projects led by Vietnamese enterprises.

For example, the concessional financing support to a leading domestic EV manufacturer to execute Vietnam’s first fully electric public transport bus fleet; or the establishment of an integrated timber plantation and processing platform across Laos and Cambodia, with Vietnam as the focal point.

Through Aus4Innovation, a ten-year, AUD 33.5 million program that strengthens Vietnam's innovation system, including climate-smart agricultural practices that generate carbon credits.

In terms of financing, she shared, in Financing and Investment, Australia recently provided AUD75 million on-lending facility to finance sustainable infrastructure, reinforcing the financial ecosystem required for a carbon market.

At the policy level, Australia is also supporting Vietnam at the policy and institutional level, and working with partners such as UNOPS to implement the Energy Transition Partnership, which has delivered an integrated package of policy, regulatory, technical, financial, and capacity building assistance.

Reaffirming commitment, Ms. Brennan emphasised, Australia remains committed to supporting Vietnam’s carbon market development through practical and collaborative cooperation. 

On the global context, Ms. Brennan said, almost one third of global emissions are covered by carbon pricing mechanisms.Carbon pricing and carbon market instruments are increasingly recognised as effective tools to mobilise finance and drive emissions reductions.

However, Ms. Brennan cautioned: “At the same time, expectations around market integrity, transparency, and high-quality project development are rising. Supporting businesses to understand and navigate these requirements is essential.”

Today’s discussions on policy implementation, enterprise readiness, project development, and market access are not merely technical. They are fundamentally about building confidence, capability, and trust as Vietnam prepares to commence its pilot domestic carbon market in the coming months.

Australia’s own carbon market framework continues to evolve. Our experience does not offer a one size fits all model, Vietnam’s circumstances, industrial structure, and policy priorities are unique. "Australia’s journey does offer practical lessons, and we are keen to share experience while continuing to learn from Vietnam’s approach", she emphasised.