Offshore wind power project, green hydrogen is transferred up to 90% of carbon credits

According to Decree 112 recently issued by the Government, Vietnam for the first time has a legal framework for exchanging carbon credits internationally. Specifically, projects that apply new, high-cost technology that have not been or are rarely deployed in Vietnam such as offshore wind power, carbon capture technology or green hydrogen production can be sold for up to 90% of the carbon credits created.

A carbon credit is a tradable license or certificate that is worth buying and selling and gives the credit holder the right to emit one ton of CO2 or another type of gas on the greenhouse gas emissions list.

According to the Department of Climate Change (Ministry of Agriculture and Environment), this mechanism is intended to attract international investors, especially in fields that require advanced technology and large capital. Allowing the transfer of most carbon credits helps increase capital recovery, thereby encouraging the implementation of large-scale emission reduction projects.

With emission reduction activities widely implemented in the country, the maximum transfer rate is only 50%, in order to retain credits for the national emission reduction target.

The Ministry of Agriculture and Environment is the agency that approves the transfer of these credits. All business credit transactions will be recorded on the national registration system to avoid duplication of emissions reduction results and ensure transparency.

Also according to the decree, three carbon exchange mechanisms are established based on the provisions of the Paris Climate Agreement on cooperation, centralized market mechanisms and independent carbon standards.

In addition, the decree also allows domestic organizations to purchase and use international carbon credits to implement international commitments, thereby opening more channels to mobilize resources for green transformation.

Vietnam aims to achieve net zero emissions by 2050. Previously, the 2020 Environmental Protection Law laid the foundation for a carbon market, but still lacked specific regulations for international exchange activities.

According to the adjusted Power Plan VIII, offshore wind power capacity by 2030 will reach about 6,000 MW and increase to 17,000 MW by 2035. This type of power source can reach a capacity of 113,000-139,000 MW by 2050, playing a key role in the carbon neutrality goal.