Experts say that if carbon credits are purchased at a high price, it means farmers will have more income when they comply with the emission reduction process.
At the seminar on carbon credits and human resource training on the morning of August 16 in Ho Chi Minh City, Mr. Dang Thanh Long, Head of Training and Sustainable Development at Intertek Vietnam, emphasized the potential of the carbon credit market.
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 high-quality rice cultivation combined with emission reduction. To sell rice carbon credits, farmers do not burn straw, increase the amount of bio-fertilizer, aiming to reduce methane emissions and create low carbon from rice cultivation. In particular, farmers must follow the correct procedures for reporting and evaluating carbon credits.
There are currently about 36 countries participating in the carbon credit market, which brings financial benefits, helping to reduce production costs thanks to sustainable processes. Last year, Vietnam sold 10.3 million tons of CO2 to the World Bank at $5 per ton, earning nearly VND1,250 billion. With a project of 1 million hectares of high-quality rice, the value of carbon credits could reach $100 million per year if sold at $10 per credit.
Dr. Tran Minh Hai, Vice Rector of the School of Public Policy and Rural Development, also agreed that participating in the carbon market will bring double benefits if Vietnam goes in the right direction. Currently, Vietnam is the first country to implement carbon credits for rice. If carbon credits are purchased at a high price, it means farmers will have more income when they comply with the emission reduction process.
According to Ecosystem Marketplace, a non-profit organization that provides market information, the price of carbon in the world market in 2022 fluctuates between 5.94 and 11.58 USD per ton. However, experts predict that the price will continue to increase thanks to the participation of many countries.
Harvesting rice in Hau Giang province. Photo:An Binh
However, Mr. Hai warned that many businesses and farmers do not understand the emission reduction rice cultivation process correctly, leading to risks in implementation. They may even suffer losses because the quality of the product decreases and the emission reduction is not recognized. Currently, some businesses participate but do not fully meet the technical requirements or exaggerate the capabilities of organic and microbial fertilizer products.
For carbon credits to be verified, it is necessary to have a strict process and build a team of professional human resources with skills in related fields such as carbon footprint tracking, waste management and production monitoring.
Mr. Dang Thanh Long also emphasized that Vietnam needs to build a highly qualified workforce to develop the carbon credit market. If it is not done correctly and quickly, Vietnam may lose a large source of revenue from this market.
When Vietnam did not have a carbon credit trading market, goods exported to the EU would have to pay 100% of the carbon fee for emissions exceeding the quota. However, once this market is established, businesses will be able to deduct this fee, especially for items in the CBAM group when exporting to Europe.
CBAM is the EU’s carbon border adjustment mechanism that applies to six sectors including steel, cement, aluminum, electricity and fertilizers. From 2026, businesses importing into the EU will have to buy carbon certificates corresponding to their emissions, pushing the value of carbon credits up and continuing to increase in the future.