UEH Takes the Lead in Contributing to the Improvement of the Law on Environmental Protection: From Legal Frameworks to Drivers of the Carbon Market and Circular Economy
15 May, 2026
In this critical process, the Institute for Sustainable Finance at the University of Economics Ho Chi Minh City (UEH SFI) has proactively contributed in-depth expertise through an Analysis and Recommendations Report on the Draft Law, focusing on core issues such as greenhouse gas emissions management, carbon market development, international exchange mechanisms, and the promotion of a circular economy. UEH's proposals not only reflect an academic perspective but also demonstrate a pioneering role in connecting policy - market - and business practice.
Strengthening the Greenhouse Gas Emissions Management Framework: From Regulation to Enforceability
UEH's report acknowledges that the Draft Law has made significant progress by shifting from an "emission reduction" approach to "greenhouse gas emissions management," while requiring emitting facilities to conduct annual inventories and update data on the national system — an important foundation for building a synchronized emissions governance system.
However, UEH also identified a major challenge: the capacity for Measurement, Reporting, and Verification (MRV) of appropriate emission reduction strategies — particularly among small and medium-sized enterprises — remains limited, while compliance costs could rise significantly without an appropriate roadmap.
UEH therefore proposes:
- Developing a phased facility-level greenhouse gas inventory and emission reduction roadmap, differentiated by direct and indirect emission sources, based on technology readiness and costs, to reduce compliance pressure and align with international practices;
- Adding financial support mechanisms and specialized training and technical transfer programs to enhance MRV capacity at the enterprise level, and establishing a simplified "tiered compliance" mechanism with dedicated technical support to lower barriers for small and medium-sized enterprises.
This approach shows that UH goes beyond merely "tightening regulations," placing equal emphasis on the economy's feasibility and transition costs.
The Carbon Market: From Legal Definition to Effective Operational Design
One of the key highlights of the Draft Law is the designation of carbon credits as "property rights" and the initial shaping of a domestic carbon market. However, according to UEH, this system is still in its early stages and lacks long-term strategic design.
From a financial and market perspective, UEH puts forward a series of "system design" recommendations, including:
- Synchronizing data and transaction systems to ensure reliability and interoperability between the national registry and the trading exchange;
- Establishing market regulation tools such as stability reserves, reference price bands, and stabilization funds to prevent extreme volatility and speculative behavior;
- Requiring a comprehensive evaluation of the pilot phase through 2028 as the basis for developing a Vietnam Carbon Market Development Strategy to 2050;
- Developing programs to enhance carbon credit quality, working toward building a "Vietnam carbon credit brand" that meets international standards;
- Adding financial support mechanisms for enterprises to develop long-term emission reduction plans to ensure compliance costs are manageable.
These proposals show that UEH approaches the carbon market not merely as an environmental tool, but as a component of the national green finance system, capable of mobilizing resources and enhancing the competitiveness of Vietnamese enterprises.
Linking the Circular Economy with Green Finance and Emission Reductions
On the circular economy pillar, UEH commends the Draft Law for integrating this theme into the development strategy and prioritizing funding from green bonds. However, a significant gap remains in the linkage between circular economy models and the carbon market.
To address this, UEH proposes:
- Establishing a legal basis to recognize carbon credits generated from emission reduction projects integrating circular economy practices, enhancing opportunities to participate in domestic and international markets;
- Establishing interconnected regulatory mechanisms to ensure clarity in accounting between carbon market compliance and extended producer responsibility compliance, minimizing the risk of double-counting;
- Linking Best Available Technology (BAT) standards and ESG systems with financial incentives, enabling enterprises to access green credit at lower costs;
- Issuing sector-specific quantitative emission factors and a priority circular economy model catalog, while developing direct linkage mechanisms between these models and financial incentives and carbon credit generation potential, focusing on high-emission sectors.
Notably, UEH emphasizes the role of financial leverage rather than policy encouragement alone in driving substantive transformation within enterprises.
Recommendations for Improving Environmental Regulations Toward Consistency and Avoiding Overlap
Beyond strategic content, UEH also offers specific comments to enhance the transparency and enforceability of the Law:
- Clarifying wastewater treatment standards in relation to the environmental carrying capacity;
- Proposing tighter technical and sanitary standards for agricultural waste recycling to ensure ecological safety, alongside harmonizing and eliminating overlaps with sector-specific legislation (transportation, construction, animal husbandry).
These contributions reflect an interdisciplinary, systematic, and practical approach, aimed at a transparent, consistent, and highly enforceable legal framework.
UEH's Pioneering Role in Sustainable Policymaking
The proactive participation of UEH's Institute for Sustainable Finance in contributing to an important piece of legislation, such as the Law on Environmental Protection, is not merely an academic exercise - it affirms UEH's role as a knowledge partner in national policymaking.
Through this report, UEH has connected international standards to the Vietnamese context; proposed systemic solutions spanning legal to market dimensions; and emphasized the feasibility, effectiveness, and long-term competitiveness of the economy.
As Vietnam stands at the threshold of a "green transformation," such contributions not only help refine institutions but also help shape a new development model - one where economic growth goes hand in hand with environmental protection and innovation.
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The Institute for Sustainable Finance at the University of Economics Ho Chi Minh City (UEH SFI) is the first educational organization in Vietnam to conduct consulting, training, and research activities in sustainable governance, sustainable finance, and related fields. |
News, photos: Institute for Sustainable Finance, Department of Communications and Partnerships
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