National Target 18 corresponds to Target 18 of the Kunming-Montreal Global Biodiversity Framework. It has two components: (i) identifying and eliminating, phasing out or reforming incentives, including subsidies, harmful for biodiversity in a proportionate, just, fair, effective and equitable way, starting with the most harmful; and (ii) scaling up positive incentives for the conservation and sustainable use of biodiversity.

The target is identified based on a number of policies and legal documents, such as the National Biodiversity Strategy to 2030, vision to 2050 (Decision No. 149/QD-TTg, 2022), the Environmental criteria and verification of investment projects under the green classification (Decision No. 21/2025/QD-TTg, 2025), the Scheme on sustainable development of one million hectares of high-quality, low-emission rice associated with green growth in the Mekong Delta by 2030 (Decision No. 1490/QD-TTg, 2023), the Elaborating the Law on Environmental Protection, which establishes the legal basis for payment for ecosystem services, environmental protection incentives, green procurement, green credit and green bonds (Decree No. 08/2022/ND-CP, 2022), the Promoting green credit growth and managing environmental and social risks in credit granting (Directive No. 03/CT-NHNN, 2015), the Guidelines on environmental risk management in credit extension (Circular No. 17/2022/TT-NHNN, 2022).

Positive incentives - legal framework for green credit and green bonds (Decree 08):

• Investment projects involving environmental protection or offering environmental benefits are entitled to be granted green credit and to issue green bonds; confirmation that a project falls within the "green list" is made at the request of the project owner or bond issuer in order to receive the State’s green credit and green bond incentives (Article 154).
• Credit institutions and foreign bank branches are encouraged to prioritize capital for concessional loans to green-list projects, and those granting green credit are entitled to priority when applying for concessional loans from the Government, international organizations and development partners, and to assistance in training (Article 155).
• Roadmap for green credit: the State Bank of Vietnam directs credit institutions to provide capital for concessional loans to green-list projects (Article 156).
• Green bonds may be issued by the Government, local governments, and enterprises to raise capital for green-list projects; issuers and investors are entitled to incentives on service fees; issuers must annually disclose the environmental impacts and benefits of the funded projects (Article 157).

Positive incentives - payment for ecosystem services (Decree 08):

• Payments are made for wetland ecosystem services for tourism, leisure and aquaculture provided by significant wetlands and mixed ecological regions; for marine ecosystem services for tourism, leisure and aquaculture provided by marine protected areas and aquatic resource protection areas; and for rocky mountain, cave and geopark ecosystem services for tourism and leisure in addition to forest environmental services under forestry law (Article 121 to Article 124).
• Providers entitled to payment include wildlife sanctuary management boards, organizations, and individuals responsible for managing, protecting, maintaining, and developing these ecosystems (Article 122).
• Pilot application of payments for carbon sequestration and storage services provided by marine and wetland ecosystems is to be submitted to the Prime Minister as the basis for official application (Article 121).

Positive incentives - green classification (Decision 21):

• The Decision sets the environmental criteria and verification procedure for investment projects under the green classification that are entitled to the State’s preferential policies and support regarding green credit and green bonds; projects must have an approved EIA report or environmental registration and satisfy the criteria in Appendix I.
• The classification includes a dedicated sector on agriculture, forestry, fisheries, and biodiversity conservation, with environmental objectives that expressly include nature and biodiversity conservation, restoration of natural ecosystems, and investment in the development of natural capital. Eligible categories include: crop cultivation to sustainable standards (VietGAP, GlobalGAP or organic TCVN 11041-2:2017); livestock farming to good agricultural practices or organic standards; afforestation, improvement of the quality of natural and planted forests and sustainable forest management (certified under the national Sustainable Forest Management standard or equivalent, and restoration and development of natural ecosystems); sustainable inland and marine aquaculture (VietGAP, GlobalGAP or BAP); and sustainable food production and processing.

Positive incentives - banking sector measures (Directive 03 and Circular 17):

• Credit institutions are required to develop green credit programmes and policies to raise the green credit proportion of their credit portfolios; to research and develop green credit products and credit programmes offering incentives for green-growth-oriented projects; and to give funding priority to sectors that conserve, develop and efficiently use natural resources, apply advanced technologies, use energy efficiently, develop clean and renewable energy, and manufacture environmentally friendly products (Directive 03).
• The State Bank develops measures to promote green credit growth, organizes training on green credit and on environmental and social risk management, and guides credit institutions in establishing environmental and social risk management systems (Directive 03).
• Credit institutions must carry out environmental risk assessment when extending credit to investment projects listed in Appendices III, IV, and V of Decree 08; issue internal regulations on environmental risk management; and, where environmental risks are identified, agree with the client on additional risk-minimization measures to be written into the credit agreement (Circular 17).

Positive incentives - sectoral application (Decision 1490):

• The Scheme establishes one million hectares of specialized high-quality, low-emission rice in 12 Mekong Delta provinces by 2030, with chemical fertilizer and pesticide use reduced by 30% (20% by 2025), water use reduced by 20%, greenhouse gas emissions reduced by over 10%, post-harvest losses below 8%, and 100% of straw collected and reused.
• Incentives supporting the transition consist of priority credit programs linking cooperatives and enterprises, incentive capital from State credit policies and priority in training for participating rice-farming households, support for cooperatives in infrastructure investment and technical assistance, access to medium- and long-term credit for enterprises cooperating with cooperatives, agricultural insurance policies, and mobilization of technical and financial support from international carbon finance funds.
• A carbon credit payment mechanism is to be established based on the success of the specialized farming region, with a monitoring, reporting, and verification system supporting the issuance of carbon credits to areas that adopt low-emission rice farming practices for domestic and foreign carbon markets. Added value in the rice chain rises by 40%, and the farmer profit margin exceeds 50% by 2030.

Harmful incentives – no policies and legal documents:

• The instruments supporting the National Target 18 do not currently provide for the identification, elimination, phasing out, or reform of incentives, including subsidies, that are harmful to biodiversity.

References

Circular No. 17/2022/TT-NHNN guiding environmental risk management in credit extension by credit institutions and foreign bank branches (in Vietnamese). https://congbao.chinhphu.vn/van-ban/thong-tu-so-17-2022-tt-nhnn-38402/42729.htm

Decree No. 08/2022/ND-CP dated 10 January 2022 detailing a number of articles of the Law on Environmental Protection (in Vietnamese). https://vanban.chinhphu.vn/?pageid=27160&docid=205092

Directive No. 03/CT-NHNN dated 24 March 2015 on promoting green credit growth and managing environmental and social risks in credit extension (in Vietnamese). https://thuvienphapluat.vn/van-ban/Tien-te-Ngan-hang/Chi-thi-03-CT-NHNN-2015-tang-truong-tin-dung-xanh-quan-ly-rui-ro-moi-truong-xa-hoi-269326.aspx

Decision No. 149/QD-TTg dated 28 January 2022 approving the National Biodiversity Strategy to 2030, with a vision to 2050 (in Vietnamese). https://vanban.chinhphu.vn/?pageid=27160&docid=205263

Decision No. 1490/QD-TTg dated 27 November 2024 approving the Project on sustainable development of one million hectares of high-quality, low-emission rice associated with green growth in the Mekong Delta to 2030 (in Vietnamese). https://vanban.chinhphu.vn/?pageid=27160&docid=209054

Decision No. 21/2025/QD-TTg dated 4 July 2025 setting environmental criteria and certification of investment projects under the green taxonomy (in Vietnamese). https://vanban.chinhphu.vn/?pageid=27160&docid=214447

Law on Environmental Protection No. 72/2020/QH14 dated 17 November 2020 (in Vietnamese). https://vanban.chinhphu.vn/?pageid=27160&docid=202613

• Apply new and innovative financial mechanisms for biodiversity: research and apply biodiversity credit mechanisms, debt-for-nature swaps, green bonds and green credit consistent with international treaties and practice; balance and allocate state budget capital and prioritise ODA; encourage community and business investment and public-private partnership in the conservation and sustainable use of ecosystem services and biodiversity; and develop financial policies supporting livelihoods of communities in buffer zones (Decision 149).
• Operate and expand payment for ecosystem services: implement payments for wetland, marine, rocky mountain, cave and geopark ecosystem services alongside forest environmental services; and pilot payments for carbon sequestration and storage by marine and wetland ecosystems (Decree 08, Articles 121-124; Decision 149).
• Implement the green classification and verification system: apply the environmental criteria for investment projects under the green classification in the sectors of agriculture, forestry, fisheries and biodiversity conservation; and operate verification by competent authorities and qualified independent verification organizations, so that eligible projects can access the State’s green credit and green bond incentives (Decision 21; Decree 08, Article 154).
• Scale up green credit: require credit institutions to develop green credit products and programs and raise the green credit share of their portfolios; prioritize concessional lending to green-list projects; provide priority access to concessional funds from the Government, international organizations and development partners; deliver training on green credit; and implement interest rate subsidies for green-list projects (Directive 03; Decree 08, Articles 155-156).
• Develop the green bond market: enable the Government and enterprises to issue green bonds for green-list projects; classify green-list projects within public investment portfolios; and require annual disclosure of the environmental benefits of funded projects (Decree 08, Article 157).
• Manage environmental and social risk in credit extension: require credit institutions to assess environmental risk before extending credit to projects listed in Appendices III, IV and V of Decree 08, to adopt internal regulations on environmental risk management, and to agree risk-minimization measures with clients in credit agreements so that finance does not flow into activities harmful to the environment and biodiversity (Circular 17 and Directive 03).
• Apply other environmental protection incentives: provide land assistance, investment capital incentives and assistance through the Vietnam Environment Protection Fund and provincial funds, and tax, fee and charge incentives to eligible environmental protection projects and business lines; and apply green procurement to investment projects and tasks funded by the state budget (Decree 08, Articles 131-136).
• Apply positive incentives in sectors with high biodiversity impact: deliver priority credit, incentive capital, agricultural insurance, infrastructure and technical support, and a carbon credit payment mechanism to shift one million hectares of Mekong Delta rice to high-quality, low-emission farming with 30% lower fertilizer and pesticide use (Decision 1490).
• Develop biodiversity offsets and related regulations: establish regulations and guidelines on biodiversity offsets, the protection of the natural heritage environment, and investment in natural heritage sites, wetland sanctuaries, and marine sanctuaries (Decision 149).

References

Circular No. 17/2022/TT-NHNN guiding environmental risk management in credit extension by credit institutions and foreign bank branches (in Vietnamese). https://congbao.chinhphu.vn/van-ban/thong-tu-so-17-2022-tt-nhnn-38402/42729.htm

Decree No. 08/2022/ND-CP dated 10 January 2022 detailing a number of articles of the Law on Environmental Protection (in Vietnamese). https://vanban.chinhphu.vn/?pageid=27160&docid=205092

Directive No. 03/CT-NHNN dated 24 March 2015 on promoting green credit growth and managing environmental and social risks in credit extension (in Vietnamese). https://thuvienphapluat.vn/van-ban/Tien-te-Ngan-hang/Chi-thi-03-CT-NHNN-2015-tang-truong-tin-dung-xanh-quan-ly-rui-ro-moi-truong-xa-hoi-269326.aspx

Decision No. 149/QD-TTg dated 28 January 2022 approving the National Biodiversity Strategy to 2030, with a vision to 2050 (in Vietnamese). https://vanban.chinhphu.vn/?pageid=27160&docid=205263

Decision No. 1490/QD-TTg dated 27 November 2024 approving the Project on sustainable development of one million hectares of high-quality, low-emission rice associated with green growth in the Mekong Delta to 2030 (in Vietnamese). https://vanban.chinhphu.vn/?pageid=27160&docid=209054

Decision No. 21/2025/QD-TTg dated 4 July 2025 setting environmental criteria and certification of investment projects under the green taxonomy (in Vietnamese). https://vanban.chinhphu.vn/?pageid=27160&docid=214447

• Access to financial resources: the target operates through green credit, green bonds, payment for ecosystem services, environment protection funds, tax, fee and charge incentives, green procurement, concessional and ODA finance, carbon finance, and prospective biodiversity credits and debt-for-nature swaps (Decree 08; Decisions 149, 21 and 1490; Directive 03).
• A Whole-of-government and whole-of-society approach: implementation spans the ministry responsible for the environment, the Ministry of Finance, the Ministry of Planning and Investment, the State Bank of Vietnam, credit institutions and foreign bank branches, the State Treasury, provincial People’s Committees, enterprises, cooperatives and farming households (Decree 08; Directive 03; Decisions 21 and 1490).
• Cooperation and synergies: economic instruments for biodiversity are delivered jointly by the environment and finance and banking sectors, and biodiversity conservation is integrated into credit, bond, procurement, insurance and carbon market mechanisms (Decree 08; Circular 17; Decisions 21, 1490).
• Consistency with international agreements or instruments: new financial mechanisms are to be applied in accordance with international treaties to which Vietnam is a signatory and with international practice (Decision 149); verification bodies under the green classification operate to international standards (ISO/IEC 17029, ISAE 3000) (Decision 21); and the low-emission rice scheme contributes to Vietnam’s international climate commitments and connects to domestic and foreign carbon markets (Decision 1490).
• Contribution and rights of local communities: financial policies support the livelihoods of communities legally living in buffer zones of sanctuaries, and legal financial forms for community conservation are encouraged (Decision 149); farming households, cooperatives and cooperative groups receive priority credit, training, technical support and benefits from the sale of carbon credits (Decision 1490).
• Collective effort towards the targets: National target 18 is delivered through a coordinated set of biodiversity, environmental, financial, banking and sectoral instruments.
• Ecosystem approach: payments are structured around the services provided by forest, wetland, marine, rocky mountain, cave and geopark ecosystems, and the green classification rewards the restoration and development of natural ecosystems and investment in natural capital (Decree 08; Decision 21).
• National circumstances, priorities and capabilities: the framework reflects Vietnam’s bank-centered financial system - hence the emphasis on green credit and environmental risk management in credit extension - and its economic structure, with the first large sectoral application targeting Mekong Delta rice (Directive 03; Circular 17; Decision 1490).
• Science and innovation: the target relies on new and groundbreaking financial mechanisms, measurement, reporting, and verification systems for carbon credits, and independent verification of green projects (Decisions 21, 149, 1490).

National Target 18 covers two aspects of GBF Target 18 as below:

• Scale up positive incentives for the conservation and sustainable use of biodiversity: Vietnam has a substantial and expanding framework of positive incentives, comprising payment for ecosystem services extended beyond forests to wetland, marine, rocky mountain, cave and geopark ecosystems (Decree 08); a green taxonomy with a dedicated agriculture, forestry, fisheries and biodiversity conservation sector and an independent verification system (Decision 21); green credit incentives and a roadmap including interest rate subsidies for green-list projects (Decree 08 and Directive 03); green bonds with service-price incentives and mandatory environmental disclosure (Decree 08); environmental protection incentives on land, investment capital, taxes, fees and charges, and green procurement (Decree 08); sectoral incentive packages such as the one million hectare low-emission rice scheme with priority credit, agricultural insurance and a carbon credit payment mechanism (Decision 1490); and a commitment to research and apply biodiversity credits and debt-for-nature swaps (Decision 149).
• Ensuring incentives are positive or neutral for biodiversity: The requirement for credit institutions to assess and manage environmental risk when financing projects listed in Appendices III, IV and V of Decree 08, and to agree risk-minimization measures in credit agreements (Circular 17 and Directive 03), helps prevent finance from flowing to environmentally harmful activities. However, it focuses on environmental risk to the lender rather than on harm to biodiversity itself.

But the National Target 18 does not cover the following aspects of GBF Target 18 

• Eliminate, phase out, or reform harmful incentives in a proportionate, just, fair, effective, and equitable way, starting with the most harmful: no measures for the elimination, phasing out, or reform of harmful incentives or subsidies are provided.
• Substantially and progressively reducing harmful incentives by at least US$500 billion per year by 2030: this is not reflected as a national quantified commitment.
• Identify incentives, including subsidies, that are harmful to biodiversity: no national identification or review of harmful incentives has been undertaken.

UNDP supports the development of a Biodiversity Finance Plan, the review of expenditures, financial needs assessment and the implementation of financial solutions under the NBSAP (UNDP, 2019; UNDP, 2023). In addition, there may be commitments from banks, financial institutions, and enterprises, given that Directive 03/CT-NHNN and Decree 08 place credit institutions, green bond issuers, and investors at the center of positive incentives, yet no official records have been reported.

References

UNDP. (2019). Viet Nam: The Biodiversity Finance Initiative (BIOFIN) - Finance for nature. United Nations Development Programme. https://www.biofin.org/sites/default/files/content/knowledge_products/BFP%20Viet%20Nam.pdf

UNDP. (2023). Assessing the financial needs for implementing the national biodiversity strategy up to 2030, with a vision to 2050. United Nations Development Programme. Unpublished report.

Additional means of implementation are needed, in particular: a national review to identify incentives and subsidies harmful for biodiversity, together with the methodology, data and inter-ministerial mandate required to value them, and a just and equitable roadmap for their elimination, phasing out or reform; systems to measure and report the positive incentives in place, including the volume of green credit and green bonds directed to biodiversity-related projects; full operationalisation of the green classification, including capacity of independent verification organisations and awareness among project owners and credit institutions; delivery of the interest rate subsidy mechanism for green-list projects; completion of the legal and methodological framework for payment for wetland and marine ecosystem services and carbon sequestration, which remain at pilot stage; development of the biodiversity credit and debt-for-nature swap mechanisms and of regulations and guidelines on biodiversity offsets; capacity building for credit institutions on environmental risk management and green credit appraisal; and continued international cooperation, concessional finance and carbon finance.

Overlapping with other national targets: Some elements of National target 18 may overlap with other national targets. This includes the payment for forest environmental services and the North Central emission reduction payment mechanism (ERPA), which are reported under National targets 9 and 11; green credit, green bonds and the circular and green economy are also relevant to National target 16; and the reduction of fertilizer and pesticide use under Decision 1490 contributes to National targets 7 and 10.