Can carbon credits be used as collateral (mortgage) for loans?

The use of carbon credits as a security asset in lending activities remains a novel issue and is not clearly regulated in Vietnam's current legal system. Currently, the Civil Code, the Law on Credit Institutions, as well as the Law on Environmental Protection do not contain any specific provisions recognizing carbon credits as a type of financial asset that can be mortgaged in credit transactions. According to the Ministry of Agriculture and Environment, carbon credits in Vietnam are still in the phase of building market infrastructure, including finalizing the legal framework, verification procedures, valuation, and ownership registration.

Notably, the national carbon credit registration system and the carbon credit exchange operated by the Hanoi Stock Exchange (HNX) are expected to be piloted starting in 2025. However, until these mechanisms are fully implemented and ensure transparency, the valuation capability and liquidity of carbon credits are not sufficient to be recognized as legal security assets within the banking system.58

Nevertheless, in international practice, enterprises have adopted the use of carbon credit purchase and sale contracts in the form of forward contracts as an indirect financial instrument to serve as a basis for borrowing capital. These contracts can be used in the form of assignment of assets or as a basis for proving future cash flow, thereby supporting the credit appraisal process.59

References

58. Government of Vietnam. (2025). Decision No. 232/QD-TTg of 2025 approving the Scheme on Establishing and Developing the Carbon Market in Vietnam. Government Office. Government Digital Portal. https://vanban.chinhphu.vn/?pageid=27160&docid=212592
59. VnEconomy. (2025). Vietnam will pilot the carbon exchange starting 2025, officially operating in 2029. VnEconomy. https://vneconomy.vn/viet-nam-se-thi-diem-san-giao-dich-carbon-tu-2025-van-hanh-chinh-thuc-vao-2029.htm