Vietnam has pledged to reach net zero emissions (Net Zero) by 2050. Many manufacturing FDI enterprises ask: “are we legally obliged to achieve Net Zero?” The answer must be stated clearly at the outset: there is no direct “Net Zero obligation” on enterprises. The Net Zero 2050 pledge is a national-level political commitment; it does not by itself create direct legal duties for individual companies. The substantive duties FDI enterprises must comply with lie in specific instruments: emission quotas, the carbon market, extended producer responsibility (EPR) and — for exports to the EU — the CBAM mechanism.
1. Net Zero 2050: a national pledge, not a direct corporate duty
The Net Zero by 2050 commitment was made by Vietnam at the national level within the framework of international climate commitments. It is a policy-orienting goal: the State will issue specific legal instruments (quotas, carbon markets, technical standards) to progressively realise it. The pledge itself does not impose on enterprises an enforceable “Net Zero duty”. Writing that “FDI enterprises are obliged to achieve Net Zero” is wrong — what companies must do is comply with each specific duty prescribed by law, as set out below.
2. Substantive duty 1: greenhouse gas emission quotas
The central instrument is emission quotas under Decree 119/2025/ND-CP (effective from 1 August 2025), amending Decree 06/2022/ND-CP:
- quota allocation in three phases;
- a 2025–2026 pilot phase covering three sectors: thermal power, iron and steel, cement;
- Decision 263/QD-TTg and Decision 699/QD-BNNMT govern pilot quota allocation to 110 facilities in these three sectors.
Manufacturing FDI enterprises in the covered sectors and facilities must comply with their allocated quota duties. A word of caution: the specific fine for failing to surrender sufficient quotas has not been verified — companies should check the original text of the currently applicable sanctioning instrument before applying it to any case, rather than guessing the amount.
3. Substantive duty 2: the domestic carbon market
Alongside quotas, Vietnam is building a carbon market:
- Decree 29/2026/ND-CP (2026) on the carbon exchange — still in force;
- Decree 83/2026/ND-CP (2026; exact issuance date not verified, only the year is stated here) on the carbon exchange — the HNX carbon exchange opened on 29 June 2026;
- Decree 112/2026/ND-CP (effective from 19 May 2026) on international carbon credit exchange — still in force.
These instruments lay the groundwork for trading quotas and carbon credits — emitting enterprises will have to treat carbon costs as a genuine compliance cost going forward.
4. Extended producer responsibility (EPR)
Law on Environmental Protection 72/2020/QH14 (Articles 91, 92, 139) — still in force — provides for extended producer and importer responsibility (EPR): organisations and individuals manufacturing or importing products and packaging must recycle, collect and treat them at mandatory rates and specifications. This is a direct, current duty for many manufacturing FDI enterprises (electronics, packaging, plastics, etc.), independent of the Net Zero narrative.
5. CBAM: for exports to the EU
FDI manufacturers of goods within the scope of the EU Carbon Border Adjustment Mechanism (CBAM) that export to that market face an additional layer of duties from the EU side: declaring the embedded carbon content of products and purchasing corresponding CBAM certificates. This duty arises from EU law applied to imported goods — it is not a “Net Zero” duty under Vietnamese law — but it is a real compliance cost exporting companies must factor in.
6. Distinguished from GHG inventory
An easy confusion to avoid: GHG inventory is a measurement and reporting duty (knowing how much you emit), while quotas and the carbon market are emission-reduction and pay-for-emissions duties (this article). The two groups differ in nature, legal basis and covered subjects — companies must comply with both where applicable.
Conclusion
Manufacturing FDI enterprises in Vietnam have no direct legal duty to “achieve Net Zero” — the Net Zero 2050 pledge is a national-level commitment. But that does not mean companies stand aside: emission quotas (Decree 119/2025), the domestic carbon market (Decrees 29/2026, 83/2026, 112/2026), EPR (Law on Environmental Protection 72/2020) and CBAM (for EU exports) are specific, sanction-backed duties being progressively tightened. Companies should review now which instruments cover them, rather than waiting until a “Net Zero duty” — which does not exist in that form — is mentioned to them.
Contact us
If your company needs a review of its emission quota, carbon market and EPR duties under current law, please contact FLAT Law Firm for detailed assistance.
Note: This article is for general information only and does not constitute legal advice. Laws are frequently amended; each specific case must be assessed on its own file and the applicable regulations. This article was prepared with AI assistance and reviewed by the FLAW AI Legal Council; publication is pending owner approval, and does not replace the advice of a human lawyer.