CNUDMI - A-CN.9-1231

United Nations A/CN.9/1231

General Assembly

Distr.: General 3 July 2025

English only

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United Nations Commission on International Trade Law Fifty-eighth session Vienna, 7 –23 July 2025

Work programme

Proposal by Viet Nam for possible future work on carbon markets

In preparation for the fifty -eighth session of the Commission, the Government of Viet Nam submitted to the secretariat a proposal for possible future work on carbon markets . The proposal was received by the secretariat on 3 July 2025 and is reproduced as an annex to this note in the form and language in which it was received.A/CN.9/1231

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Annex

Carbon markets

1. The UNCITRAL/UNIDROIT study on the legal nature of verified carbon credits issued by independent carbon standard setters 1 provides a helpful overview of the global landscape and legal issues and challenges related to the trading of such credits.

There have been many developments with respect to carbon markets since the UNCITRAL/UNIDROIT study’s distribution on 31 August 2024 and the Colloquia that UNCITRAL held in this area.2

2. Carbon credit markets are being established and are in operation in many countries, with growing economic and social potential and seeking to align with climate goals. However, v oluntary carbon credit markets continue to face challenges regarding , for example, carbon accounting, market transparency, lack of uniform standards, and difficulties ensuring the quality and integrity of carbon credits.

Currently, the re is no international legal framework for voluntary carbon credit

climate goals. However, v oluntary carbon credit markets continue to face challenges regarding , for example, carbon accounting, market transparency, lack of uniform standards, and difficulties ensuring the quality and integrity of carbon credits. Currently, the re is no international legal framework for voluntary carbon credit trading , which remains rudimentary and lacking a harmonized approach . As the UNCITRAL/UNIDROIT study observed , voluntary carbon markets have emerged gradually without the intervention of public authorities and, as of the study’s preparation , most verified carbon credits are delivered and traded outside any specific domestic or international legal framework .3 Many countries have yet to implement legal regulations relating to voluntary carbon credit market s, and m any actors involved in volunt ary carbon markets are of the view that key legal aspects related to the cross -border trading of verified carbon credits lack clarity .4 This results in a lack of transparency and harmonization among national legal systems, does not facilitate cross -border voluntary carbon credit trading, and fails to unlock the full economic and financial potential of international carbon credit markets. E stablishing a consistent and predictable legal framework for voluntary carbon credit transactions is therefore necessary.

3. In addition, many countries are currently developing compliance carbon credit markets to implement Nationally Determined Contributions (NDCs) and negotiating and concluding implementation agreements under Article 6.2 of the Paris Agreement.

Article 6.2 enables a host country to sell units , known as Internationally Transferred Mitigation Outcomes (ITMOs) , to a buyer country, in exchange for investments, support for capacity building, and access to technologies not available through domestic resources. The buyer country purchases these units to address any gaps in meeting its own climate goals. 5 To negotiate effectively and ensure implementation of these agreements, countries —especially developing countries —need to build a robust, clear, and transparent legal framework to sufficiently establish an enabling market and limit legal risks when conducting cross -border carbon credit transactions. In the long term, it is necessary to establish a harmonized legal framework for carbon

of these agreements, countries —especially developing countries —need to build a robust, clear, and transparent legal framework to sufficiently establish an enabling market and limit legal risks when conducting cross -border carbon credit transactions. In the long term, it is necessary to establish a harmonized legal framework for carbon credit trading between States and also private operators to meet the demand for legal harmonization and unification in this field.

4. There are numerous ongoing developments at the national level . Viet Nam, for example , recently held the Vietnam Carbon Market Forum 2025 (Hanoi, 10 April 2025) , which aimed to address the growing demand for information on carbon market__________________ 1 A/CN.9/1191/Rev.1 (UNCITRAL/UNIDROIT study ); see also A/CN.9/1216 (containing a compilation of comments on the UNCITRAL/UNIDROIT study for consideration at the Commission’s fifty -eighth session). 2 See UNCITRAL Colloquium on Climate Change and the Law of International Trade (Vienna and online, 12 -13 July 2023), https://uncitral.un.org/en/climatechangecolloquium ; Report of the Colloquium on the Law of International Trade for a Greener Future (Vienna and online, 23–24 October 2024), A/CN.9/1204 . 3 A/CN.9/1191/Rev.1 , para. 83. 4 Ibid. 5 See Article 6.2 , Cooperative Approaches, https://unfccc.int/process -and -meetings/the -parisagreement/the -paris -agreement/cooperative -implementation/article -62.A/CN.9/1231

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related issues and to help the private sector understand the mechanisms, policies, and roadmap for establishing and operating the market .6 The Department of Climate

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related issues and to help the private sector understand the mechanisms, policies, and roadmap for establishing and operating the market .6 The Department of Climate Change, which is part of Viet Nam’s Ministry of Agriculture and Environment , organized the Forum in collaboration with the Swiss Agency for Development and Cooperation and the International Finance Corporation. Among other things, the Forum covered the carbon market roadmap for Viet Nam under Decision No. 232/Q DTTg, signed by the Prime Minister of Viet Nam on January 24, 2025, 7 which is divided into three phases : (1) by June 2025, development of the legal framework and technological infrastructure ; (2) from June 2025 to the end of 2028, a pilot period of the market , which was just launched for particular industrial sectors ; and (3) starting in 2029, the market will officially operate nationwide. 8

5. Brazil and Paraguay, as additional examples, have also recently taken important steps. Brazil established under Law 15.042 (11 December 2024) the Brazilian Greenhouse Gas Emissions Trading System (Sistema Brasileiro de Comércio de Emissões de Gases de Efeito Estufa (SBCE )). 9 In Paraguay, a decree , which was signed on 18 February 2025 and regulat es Law No. 7190/23 on carbon credits , established the creation of Paraguay’s Carbon Markets Directorate .10

6. There are also ongoing developments at the international level . At the 29th Conference of the Parties of the UN Framework Convention on Climate Change

(UNFCCC) held in Baku from 11 -24 November 2024 , important decisions were adopted relating to the operationalization of the cooperative approaches under Article 6.2 and to guidance on the carbon crediting mechanism established by Article 6.4. 11 The UNFCCC secretariat is also co-organizing Climate Weeks, a biannual meeting

adopted relating to the operationalization of the cooperative approaches under Article 6.2 and to guidance on the carbon crediting mechanism established by Article 6.4. 11 The UNFCCC secretariat is also co-organizing Climate Weeks, a biannual meeting platform intended to help translate the decisions made in the UN Climate Change process into action , the most recent of which was held in Pan ama (Panama City, 19-23 May 2025) and included an Article 6 Lab to foster dialogue among stakeholders and offer insights into, among other things, key compliance frameworks. 12

7. As the UNCITRAL secretariat has supported Viet Nam in recent years to develop a solid legal framework on public -private partnership s and given the active involvement of Viet Nam in the legislative work of the Commission, Viet Nam would propose to ask the Commission to mandate the secretariat to conduct further expl oratory work on carbon markets and build on the UNCITRAL/UNIDROIT study and Colloquia . Such work , for example, could include:

(a) outlining the projects and initiatives currently underway in various international organizations and processes , including the Hague Conference on Private International Law (HCCH) and UNIDROIT , both of which are conducting work on __________________ 6 Vietnam Carbon Market Forum 2025, https://en.mae.gov.vn/climate -change/vietnam -carbonmarket -forum -2025 -8804.htm . 7 Decision No. 232/QD -TTg, Approval of the Project on Establishment and Development of Carbon Market in Vietnam (24 Jan. 2025), https://vanban.chinhphu.vn/?pageid=27160&docid=212592 . 8 Vietnam Carbon Market Forum 2025, https://en.mae.gov.vn/climate -change/vietnam -carbonmarket -forum -2025 -8804.htm . 9 Law N o 15.042 of 11 December 2024, Federal Official Gazette (12 Dec. 2024),

market -forum -2025 -8804.htm . 9 Law N o 15.042 of 11 December 2024, Federal Official Gazette (12 Dec. 2024), www.in.gov.br/en/web/dou/ -/lei -n-15.042 -de-11-de-dezembro -de-2024 -601124199 ; President Lula signs law creating regulated carbon market in Brazil, www.gov.br/planalto/en/latestnews/2024/12/president -lula -signs -law-creating -regulated -carbon -market -in-brazil . 10 Decreto N o 3369 (18 Feb. 2025), https://decretos.presidencia.gov.py/api/norma/download/67b4980836ed821d050478ef ; Law No. 7190 on carbon credits (2023), https://www.bacn.gov.py/descarga/11986/LEY7190.pdf ; Paraguay modernizes carbon credit legislation and shows the world its potential as a green lung (18 Feb. 2025), www.mades.gov.py/2025/02/18/paraguay -moderniza -legislacion -de-creditocarbono -y-muestra -al-mundo -potencial -como -pulmon -verde/ . 11 Report of the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement on its sixth session, held in Baku from 11 to 24 November 2024 , FCCC/PA/CMA/2024/ 17/Add.1 , decisions 4/CMA.6, 5/CMA.6, and 6/CMA.6 . 12 United Nations Climate Change, Climate Week May 2025, https://unfccc.int/topics/climateweeks#2025 .A/CN.9/1231

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carbon market s,13 and the preparation of principles on the legal nature of verified

weeks#2025 .A/CN.9/1231

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carbon market s,13 and the preparation of principles on the legal nature of verified carbon credits (VCCs) respectively, as well as the UNF CCC, and other relevant organizations with regard to carbon markets , whether voluntary or compliance -based and cros s-border transactions in carbon credits; (b) mindful that the framework for cooperative approaches under Article 6.2 and the mechanism established by Article 6.4 of the Paris Agreement generally fall outside the scope of the UNCITRAL/UNIDROIT study, 14 review developments in those areas, including bilateral agreements on carbon trading concluded by States , and examine domestic legislation, including case law, on carbon markets, both voluntary and compliance -based ; and (c) in doin g so, seek to identify whether there are any international private law and trade law aspects of carbon markets and the trading of carbon credits that could be harmonized to support States, especially developing countries, develop their domestic frameworks as they embark on the negotiation of bilateral agreements on carbon trading and integrate in to the broader market for voluntary and compliance carbon credits, to unlock the full potential of cross -border trading of carbon credits , to contribute to emission reduction goals and to meet their commitments under the Paris Agreement.

8. As work along these lines could potentially be of great benefit and support to Viet Nam, as it implements its carbon markets roadmap, and to other countries , Viet Nam proposes that the Commission request s the secretariat to conduct further exploratory work in the area of carbon markets , including to examine whether there are private commercial law issues in this area that are not already being addressed by other organizations and processes and on which it would be desirable and feasible for UNCITRAL to work , with a view to facilitating the ongoing development of carbon markets and enabling and supportive legal frameworks for cross -border trading . A brief note summar izing the work could be prepared by the secretariat and submitted

other organizations and processes and on which it would be desirable and feasible for UNCITRAL to work , with a view to facilitating the ongoing development of carbon markets and enabling and supportive legal frameworks for cross -border trading . A brief note summar izing the work could be prepared by the secretariat and submitted to the Commission for its fifty -ninth session in 202 6, in order to enable the Commission to consider possible future work in this area .

__________________ 13 See HCCH, Carbon Markets P roject, www.hcch.net/en/projects/legislative -projects/carbonmarkets ; UNIDROIT, Project on the Legal Nature of Verified Carbon Credits, www.unidroit.org/work -in-progress/verified -carbon -credits/ . 14 A/CN.9/1191/Rev.1 , para. 16; see also ibid., paras. 39–40 (briefly addressin g Article 6.4 emission reductions issued under the mec hanism established by Article 6.4 of the Paris Agreement (A6.4ERs) ); 79 -82 (briefly addressing authorization of verified carbon credits as ITMOs under Article 6.2 of the Paris Agreement).