Vietnam collected 56.5 million USD from selling carbon credits to the World Bank

The information was stated by Mr. Pham Hong Luong, Deputy Director of the Department of Forestry and Forest Protection, Ministry of Agriculture and Environment, at a conference to disseminate Decree 180 on forest carbon absorption and storage services, on July 2.

According to Mr. Luong, Vietnam has earned 5 million USD from transferring 1 million tons of additional CO2 emission reduction to the World Bank, bringing the total revenue from this transfer activity to 56.5 million USD. This covers a total of 11.3 million tons of CO2, equivalent to a unit price of 5 USD per ton of CO2 emissions reduction.

Mr. Luong said the proceeds have been paid to nearly 80,000 beneficiaries (half of whom are ethnic minorities) in Thanh Hoa, Nghe An, Ha Tinh, Quang Tri, and Hue city.

According to the pilot transfer agreement between the two sides from 2022, 95% of emissions reduction results will be transferred back to Vietnam to implement Nationally Determined Contribution (NDC). NDC is each country’s commitment to reduce greenhouse gases under the Paris Climate Agreement, submitted to the United Nations every five years.

According to leaders of the Department of Forestry and Forest Protection, Decree 180 provides specific regulations on service providers and users, and how to build and register forest carbon projects. The guiding circular and forest carbon credit standards are expected to be issued on July 15, at the same time as Decree 180 takes effect.

He noted that carbon credit sales and resulting emission reductions can only be implemented when ensuring commitment to contribute to the national NDC. Vietnam’s NDC is being completed and updated to submit to competent authorities for approval.

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.

Qualified forest carbon credits can be sold according to contractual agreements in the voluntary market, or sold on the stock exchange to offset greenhouse gas quotas of thermal power, cement, and iron and steel enterprises. Earlier this week, the carbon trading floor in Vietnam launched a pilot operation and recorded the first transaction.

Mr. Luong called this policy regulating forest carbon credit transactions “the second revolution in forest environmental services”, after the policy on payment for environmental services in 2008. The new decree is expected to open up many opportunities for forest owners and localities to mobilize additional resources for forest management and development activities, while improving the livelihoods of communities living closely with forests.