Carbon Credit Transfer Ratios under Decree 112/2026/ND-CP: Hydrogen is of high priority to 90%
April 5, 2026 – VAHC Secretariat
The issuance of Decree 112/2026/ND-CP establishes a critical legal framework for Vietnam’s participation in international carbon markets under Article 6 of the Paris Agreement.
A key feature of the Decree is the definition of maximum carbon credit transfer ratios, which directly shape project economics and investment strategies.
1. Three transfer mechanisms
The Decree defines three types of carbon credit transfers:
- Transfer with corresponding adjustment
- Transfer without corresponding adjustment
- Transfer under Article 6.4 mechanism
Among these, corresponding adjustment is the most important as it directly impacts national climate commitments.
2. Transfer ratios by project category
(1) Priority projects – up to 90%
Applicable to List No. 01 projects such as:
- Green hydrogen and ammonia
- Offshore wind
- Carbon capture technologies
- Energy storage systems
Maximum transfer ratio: 90% (with corresponding adjustment)
Implications:
- Encourages high-cost, innovative technologies
- Enables near-full export of carbon credits
(2) Encouraged projects – up to 50%
Applicable to List No. 02 projects such as:
- LNG and biomass
- Waste management and RDF
- Agriculture and forestry
Maximum transfer ratio: 50% (with corresponding adjustment)
Implications:
- Balances export and domestic climate needs
- Retains part of credits for national use
(3) Non-corresponding adjustment – up to 90%
Applicable to voluntary carbon markets
Maximum transfer ratio: up to 90%
Characteristics:
- No impact on national targets
- Typically lower credit prices
3. Policy logic
The 90%–50% structure reflects a strategic approach:
- 90%: attract international capital and advanced technologies
- 50%: safeguard national climate commitments
- Non-CA: enable flexible market participation
4. Impact on project finance
- 90% group: strong carbon revenue contribution
- 50% group: requires dual-market optimization
- Non-CA: flexible but lower value
5. Conclusion
Decree 112/2026/ND-CP serves as:
- A carbon resource allocation tool
- A strategy to attract advanced technologies
- A foundation for Vietnam’s carbon market development
Understanding transfer ratios is essential to:
- Structure viable projects
- Optimize carbon revenue
- Attract international investors
GLOSSARY
- NDC (Nationally Determined Contribution): National climate commitments
- ITMO (Internationally Transferred Mitigation Outcome): Carbon credits transferred internationally
- Corresponding Adjustment: Accounting mechanism to prevent double counting
- MRV (Measurement, Reporting, Verification): System ensuring transparency
- Additionality: Emission reductions that would not occur otherwise
- CCUS (Carbon Capture, Utilization and Storage)
- CCS (Carbon Capture and Storage)
- DAC (Direct Air Capture)
- BAT (Best Available Techniques)
- ESS (Energy Storage System)
- REDD+ (Reducing Emissions from Deforestation and Forest Degradation)
Find Details of Decree 122/2026/NĐ-CP dated April 1, 2026
