There will be an additional VND1,000 billion to pay for rice carbon credits for farmers.

According to a report from the Department of International Cooperation (Ministry of Agriculture and Rural Development), the Management Board of the Transition Carbon Finance Fund (TCAF) approved a disbursement of 33.3 million USD, which could increase to 40 million USD (equivalent to 826-992 billion VND), to support Vietnam in implementing the Project to develop 1 million hectares of rice.

The money will be used to pay carbon credits to rice farmers in the Mekong Delta under the 1 Million Hectare Low-Emission, High-Quality Rice Development Project, supported by TCAF and the World Bank.

Deputy Minister of Agriculture and Rural Development Tran Thanh Nam said that pilot models on an area of ​​300 hectares in 5 provinces and cities in the Mekong Delta have shown positive results, with costs reduced, rice prices increased and farmers’ incomes improved. Enterprises committed to purchasing rice at prices higher than the market. By 2025, the area of ​​rice with reduced emissions will expand to 200,000 hectares, helping to increase the value of Vietnamese rice and protect the environment.

The Ministry is working with the World Bank and other agencies to measure and validate carbon credits from rice production, aiming to sell credits to international organizations. The World Bank and TCAF are committed to supporting Vietnam in achieving its goal of net zero emissions by 2050.

A carbon credit is a certificate of carbon dioxide (CO2) or other greenhouse gas emissions converted to CO2 equivalent (CO2tđ). One ton of CO2tđ is considered 1 carbon credit. CO2tđ is the unit of purchase and sale on the carbon market or carbon credit market.

Rice carbon credits are obtained from rice cultivation that reduces emissions by not burning straw, using biofertilizers, and reducing methane. Farmers must follow a carbon credit reporting process to participate in this market, helping them reduce costs and increase income.

There are currently 36 countries participating in the carbon credit market. Vietnam has sold 10.3 million tons of CO2 to the World Bank, earning nearly VND1,250 billion. With 1 million hectares of rice, the value of carbon credits can reach 100 million USD per year if sold at 10 USD per credit.