As of mid-2025, Vietnam has implemented 48 projects under the JCM, with 9 projects having successfully issued carbon credits. These projects are primarily concentrated in sectors that are foundational to Vietnam’s emission reduction strategy, including renewable energy, energy efficiency, green transport, and agriculture.
In the new phase of development, the JCM is expanding into medium- and long-term technological areas that support the goal of carbon neutrality. Priority sectors include:
- CCS/CCUS (Carbon Capture, Utilization, and Storage);
- Energy storage, waste-to-energy, green hydrogen, and green ammonia;
- Forestry, with models such as REDD+, afforestation, and forest restoration.
These are considered critical technologies for energy transition and the preservation of biological carbon. Expanding the JCM project portfolio will enable Vietnam to better access international capital and technology flows, while also strengthening its ability to fulfill NDC and net-zero commitments.
A significant milestone is the ongoing revision of the JCM framework to align with Article 6.2 of the Paris Agreement. Current updates are focused on:
- Standardizing project development and reporting guidelines (SDIP/SDIR)
- Proposing a two-step approval process to recognize JCM credits as ITMOs (Internationally Transferred Mitigation Outcomes)
- Adjusting baseline emission calculations in accordance with Vietnam’s latest Nationally Determined Contribution (NDC)
These changes are aimed at enhancing transparency, international recognition, and cross-border trade potential of JCM credits.
According to Decree No. 119/2025/ND-CP, carbon credits, including JCM credits, will be eligible for offsetting emission quotas in sectors subject to mandatory GHG inventory. Simultaneously, Vietnam is developing a national carbon credit exchange, expected to be officially launched by 2029. Allowing JCM credits to be traded on the exchange will not only increase market liquidity but also encourage enterprises to treat the mechanism as a strategic climate finance tool, thereby improving long-term investment efficiency and emission reduction.
Despite its strong potential, many enterprises participating in the JCM still face considerable implementation challenges. Common barriers include:
- Lengthy approval processes requiring consensus from both governments;
- Difficulty accessing financing, especially for projects outside of pre-defined priority areas;
- Limited local data and sector-specific technical guidelines, hindering methodology development;
- Unclear regulations on credit ownership and trading, especially amid the formation of Vietnam’s domestic carbon market.
These obstacles have had a notable impact on the speed and scale of JCM implementation in Vietnam.
From a practical standpoint, businesses and stakeholders have proposed several specific recommendations to address these bottlenecks:
- Updating and standardizing national data to support emission baseline development;
- Expanding the JCM project portfolio to include emerging sectors such as CCS/CCUS;
- Enhancing access to local data and technical tools;
- Simplifying procedures for registration, approval, and credit issuance;
- Finalizing regulations on carbon credit ownership and trading mechanisms, both within the national exchange and in international markets.
The JCM is increasingly proving to be a strategic bridge between climate policy, technological innovation, and climate finance. With joint support from both Vietnam and Japan, the mechanism not only helps businesses reduce emissions effectively but also contributes to shaping a transparent, efficient, and sustainable carbon market in Vietnam. It will be a vital foundation for the country’s long-term pursuit of net-zero emissions by mid-century.
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