VINACHEM

The forestry alone can bring 57 million carbon credits, or 52 million tons of CO₂, which Vietnam could sell to international organizations.

Le Hoang The from The Vos Ecosystem Company said the carbon credit market is a transaction system that buys or sells the rights to greenhouse gas emissions to trading units, organizations, localities and countries.

There are two carbon credit market segments – voluntary and mandatory. The former is set up based on commitments by UNFCCC (United Nations Framework Convention on Climate Change) countries, while the latter on the basis of bilateral/multilateral cooperation. Credit buyers get involved in transactions to satisfy policies on the social environment.

Vietnam is among the countries with the fastest growing carbon emission countries. However, it is also one of the countries with great potential in providing carbon credits.

It is estimated that the forestry sector alone can create 57 million carbon credits, or 52 million tons of CO₂, which can be sold to international organizations. If counting all sources, Vietnam has about 5 billion carbon credits.

According to The, Vietnam not only contains large reserve in carbon credits, but also can develop super-carbon credits, called ‘organic carbon’.

The expert stressed that economic growth must have relations with carbon credits. The carbon credit market is accelerated by businesses’ climate commitments, and consumers’ attention to minimizing the adverse effects caused by climate change.

The question is at which price Vietnam should sell its carbon credits.

In late 2023, Vietnam got the first amount of money from selling forest carbon credits when transferring 10.3 million tons of CO₂ to the World Bank at the price of $5 per ton and earning $51.5 million. The money has been divided among forest owners.

The Ministry of Agriculture and Rural Development (MARD) and Emergent, the agency of LEAF Coalition, are going to negotiate, sign and deploy the agreement on buying/selling for emission reductions in the Central Highlands and the south central region in accordance with the LOI (letter of intention) signed on October 31, 2021.

It is expected that Vietnam will transfer 5.15 million tons of CO₂ of the Central Highlands and the south central region at $10 per credit.

At the recent National Assembly session discussing socio-economic developments, Nguyen Quang Huan, deputy chair of the Vietnam Private Entrepreneurs Association, said he was pleased Vietnam earned $51.5 million from carbon credit transfer, but this is a transaction in the voluntary market.

He believes that it is necessary to urgently establish the mandatory market, or Vietnam will be put at a disadvantage, because carbon credit prices in the voluntary market are just $10 per credit. Meanwhile, in mandatory market, the prices could be $40, $50 and $60. Under the EU’s JCM mechanism, the price could be up to $110 per credit.

Nearly 30 countries and territories have issued carbon taxes, $1-137 per ton of CO₂ (one ton of CO₂ is equal to one carbon credit). Therefore, developing the carbon credit market will help farmers make dual profits from both agricultural products and carbon credits.

According to the Department of Forestry, some localities have recently received proposals from domestic and foreign organizations and individuals on deploying services of absorbing and storing forest carbon, including measurement, reporting, appraisal, distribution and commercialization of forest carbon credits.

However, the agency said this is a new field and the existing legal framework is not sufficient and detailed enough, which needs further research.

Regarding forest carbon services, according to the Department of forestry, the government has assigned duties to ministries and branches. The agriculture sector has been requested to reduce 129.8 million tons of CO₂ equivalent.

On that basis, MARD has requested the forestry and land use sector to cut at least 39.31 million tons of CO₂ equivalent by 2025 and 79.1 million tons by 2030.

MARD said it will carry out appraisal of emission reduction and carbon absorption potential at the national, regional and local levels by 2030-2050.

It will allocate forest emission reduction quotas to ecological areas and localities annually in 2021-2030 to obtain NDC (Nationally determined contributions) goal; build national standards on forest carbon credits and set detailed regulations on the systems for measurement, reporting and examination of emission reduction/forest carbon absorption.

– Source: VNN