Understanding Vietnam’s New Environmental Criteria for Green Investment Projects

On July 4, 2025, the Vietnamese government issued a new decision establishing environmental criteria for green investment projects, along with mechanisms for verifying whether projects meet these criteria to qualify for preferential policies and green financing options.

Decision No. 21/2025/QD-TTg (hereinafter the “Decision”), titled Regulation on Environmental Criteria and Verification of Investment Projects under the Green Taxonomy, serves as a guideline for investors, government agencies, financial institutions, and third-party accreditors. It provides a standardized framework to classify and assess whether an investment project meets the criteria to be considered “green” and falls within the scope of the green classification list issued alongside the Decision.

Investment projects must be verified as falling within this list to access preferential tax policies and state support for green credit and green bonds.

Establishing a standardized framework for the green taxonomy is crucial, as investment projects deemed “green” become eligible for specific incentives in Vietnam, including lower corporate income tax (CIT), import tax exemptions, and VAT benefits. Without a robust system to determine which projects qualify as “green,” there is a risk of greenwashing and misallocation of financing to projects that are not environmentally friendly.

Furthermore, the Decision provides financial institutions with a clear framework to verify the eligibility of investment projects for green bonds and other green financing products. Credit institutions and branches of foreign banks in Vietnam are encouraged to apply the Decision’s provisions to identify and grant green credit to investment projects on the green classification list, in line with their internal policies.

The Decision took effect on August 22, 2025.

Environmental criteria for green investment projects

The Decision outlines two criteria for an investment project to qualify as “green”. These are:

1. Having an approved appraisal decision on the environmental impact assessment (EIA) report results, or an environmental permit, or an environmental registration in accordance with Vietnam’s Law on Environmental Protection. This does not apply to projects that are exempt from environmental procedures under the law.
2. Falling under the field of environmental protection or providing environmental benefits, and meeting the requirements specified in the green classification list.

Based on the above minimum criteria, projects must also be assessed to fall within the scope of the green classification list, which has been released along with the Decision. This list covers 45 different fields across seven industries: energy, transportation, construction, water resources, agriculture, forestry, fishery, biodiversity conservation, processing and manufacturing, and environmental services. For each field, there are specific criteria that a project must meet to qualify.

Below is a sample of the fields included in the list.

Applying for confirmation of a green investment project

Investment projects under the green classification list can be verified either by state agencies that appraise environmental impact assessments (EIAs) or issue environmental permits, or by independent certification organizations (such as conformity assessment or audit service providers) that are legally registered in Vietnam and meet recognized international or national assurance standards.

Investors or green bond issuers can obtain confirmation that their projects are included in the green classification list through either the state or an independent certification organization.

To receive confirmation from a state agency, investors can request it while applying for environmental impact assessment approval or an environmental permit. In this case, the confirmation is integrated into the official approval decision or permit issued by the agency. The request must be included in the dossiers submitted for the related application, whether for EIA approval or permit issuance.

For confirmation from an independent certification organization, the investor (or green bond issuer) must submit dossiers to the organization, which will review them to assess whether the project qualifies for the green classification list. The process, costs, and timeframe are based on mutual agreement, but the certifier is legally responsible for the accuracy of its confirmation.

In both cases, confirmations are carried out in accordance with the Law on Environmental Protection and other applicable environmental laws.

Dossier requirements:

• State agency confirmation must include:
  1. A request for confirmation in the application for appraisal or permit issuance; and
  2. An explanatory report demonstrating compliance with the environmental criteria for investment projects outlined in the Decision, structured as a separate chapter in the EIA or permit dossier. 
• Independent certification organization confirmation must include:
  1. A written request using the form provided with the Decision;
  2. An approval decision on EIA appraisal results, environmental permit, or environmental registration;
  3. An explanatory report on compliance with green classification criteria at the time of requesting green credit, green bond issuance, or State incentives, in the form provided with the Decision.

Once approved, the applicant will receive a confirmation document, which is required to request incentives and support under the government’s green credit and bond policies.

After receiving confirmation, the applicant must notify the Ministry of Agriculture and Environment in writing within 30 days using the form provided with the Decision. The project must continue to adhere to the environmental criteria outlined in the Decision after receiving confirmation.

Considerations for foreign companies

For foreign companies considering investment in Vietnam, the new Decision provides both opportunities and challenges. On the positive side, the clearer guidelines and standardized criteria for green projects make it easier to understand what qualifies for preferential policies. This transparency can help ensure consistent implementation of incentives and support, and may facilitate access to green financing, including green credit and bond programs, as well as tax benefits and other state-supported advantages.

At the same time, the Decision introduces stricter requirements, which raise the compliance threshold for accessing these preferential policies. Companies must ensure that their projects fully meet the environmental criteria and other legal standards outlined in the green classification list.

To navigate these requirements effectively, foreign investors should carefully assess whether their planned projects fall within the scope of the green classification list and prepare all necessary documentation to apply for confirmation. Doing so will not only help secure eligibility for incentives and financing but also demonstrate commitment to environmental compliance, which can strengthen credibility with local authorities, financial institutions, and other stakeholders.

• Previous Article Vietnam’s International Financial Centres: Benefits and Opportunities for Investors
• Next Article Global Minimum Tax Implementation in Vietnam: Key Features of Decree 236