Date of publication: 21/01/2026
Category: Green Finance & National Policy
Prepared by: ESG Expert Team – Carbon Credit Viet Nam Joint Stock Company
The absence of a unified legal definition of “what constitutes a green project” has been the biggest bottleneck obstructing international ESG capital flows into Vietnam for many years. That bottleneck has now been officially removed with Decision 21/2025/QD-TTg, which promulgates Vietnam’s first national Green Taxonomy.
This is not merely a technical document — it is a “common language” between businesses and banks. It creates the legal basis for determining which projects qualify for preferential interest rates (Green Credit) and for issuing Green Bonds, while also preventing “greenwashing” risks in the financial sector.
1. CONTEXT: ENDING THE ERA OF “EVERYONE DEFINES IT THEIR OWN WAY”
Before 2025, determining whether a project was “green” depended largely on the internal rules of each commercial bank or funding institution. This led to inconsistency: a solar power project might be considered green at Bank A but run into difficulties at Bank B due to the lack of technical standards.
Decision 21/2025/QD-TTg has standardized the screening criteria for 5 key sector groups, with high compatibility with the ASEAN Taxonomy and references to EU Taxonomy standards. This makes it far easier for international investors (such as the WB, IFC, and ADB) to appraise and disburse capital into Vietnam.
2. CORE CONTENT: THE 5-PILLAR CATALOGUE
The Decision covers the sectors with the highest emission-reduction potential in the economy:
- Energy: Prioritizing renewable energy (wind, solar, biomass) and smart power transmission projects.
- Green Agriculture: Sustainable farming, low-carbon food supply chains, and forest protection projects.
- Transportation: Electric vehicles (EV), charging station infrastructure, and green logistics.
- Waste Management: Circular economy models, waste recycling, and Waste-to-Energy.
- Green Buildings: Buildings using environmentally friendly materials and energy-efficient designs (achieving LEED/EDGE certification).
3. FINANCIAL OPPORTUNITIES FOR BUSINESSES
The greatest impact of Decision 21 is unlocking preferential capital flows.
3.1. Accessing Green Credit
Vietnamese commercial banks are racing to disburse green credit packages to meet the State Bank of Vietnam (SBV)’s targets.
- Benefit: Lending rates for projects within the Green Taxonomy are typically 1% – 3% lower than ordinary commercial rates.
- In practice: Banks such as BIDV and TPBank have committed tens of trillions of dong to projects that properly meet the criteria of Decision 21.
3.2. Issuing Green Bonds
Previously, Vietnamese businesses were reluctant to issue green bonds for fear of legal risks and a lack of buyers. With a clear Green Taxonomy, Vietnamese corporate bonds will hold strong appeal for international ESG investment funds.
- An opportunity to raise long-term capital (5-10 years) at a lower Cost of Capital.
4. CHALLENGES AND RECOMMENDATIONS
Challenge: The Technical Compliance “Trap”
The Green Taxonomy comes with very specific technical thresholds.
- Example: Not every biomass power plant qualifies as green. The plant must demonstrate that its CO2 emissions per kWh of electricity fall below a prescribed threshold (e.g., <100g CO2/kWh).
- If a business cannot demonstrate these technical indicators, the project will be excluded from the preferential catalogue.
Action Recommendations from Carbon Credit Viet Nam:
- Project Screening: Before submitting a loan application, businesses should self-assess their projects against the technical criteria of Decision 21. Do not submit applications “blindly” only to be rejected for failing to match the standards.
- Prepare a “Green Finance Framework”: For large corporations seeking to issue bonds, a transparent green finance framework must be built, clearly stipulating how the raised funds will be used and how annual environmental impact reporting will be conducted.
- Seek a Second-Party Opinion (SPO): International banks and investment funds typically require an independent party to confirm that your project complies with Decision 21. Having an SPO report will significantly shorten loan approval times.
5. CONCLUSION
Decision 21/2025/QD-TTg is the “passport” for Vietnamese businesses to enter international capital markets. Amid continued volatility in global interest rates, access to low-cost green capital not only helps businesses reduce financing costs but also enhances brand reputation.
It is time for the Chief Financial Officer (CFO) to sit down with the Engineering/Environmental departments to review the investment portfolio: Which of our projects can be labeled Green?
About us: This report was prepared by the ESG Strategy & Policy Team of Carbon Credit Viet Nam Joint Stock Company. We support businesses in building Green Finance Frameworks, preparing green loan applications, and connecting with domestic and international financial institutions.
