Vietnam transfers 5 million tons of CO2 to get US$52 million for forest protection
The Ministry of Agriculture and Rural Development has signed an agreement with EMERGENT on the transfer of emission reductions.
Vietnam will transfer to the Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition 5.15 million tons of CO2 as a result of emission reduction from forests in the South-Central region and Central Highlands in the 2022-2026 period in order to receive nearly US$52 million for forest protection and development.
The Ministry of Agriculture and Rural Development of Vietnam has signed a Letter of Intent with the Organization for Forest Financial Enhancement (EMERGENT) - the trustee of the Lowering Emissions by Accelerating Forest finance (LEAF) Coalition on the transfer of emission reductions.
LEAF/EMERGENT will pay for this service with a minimum price of 10 USD/ton CO2 with a total value of $51.5 million. The area of registered emission reduction commercial forest is 4.26 million hectares, including 3.24 million hectares of natural forest and 1.02 million hectares of planted forest.
Under the agreement, Vietnam will transfer the greenhouse gas (Co2) absorption from 4.26 million hectares of forests in the South Central and Central Highlands to LEAF in exchange for financial investment for forest protection and development.
The two sides will continue to negotiate and develop content with the goal that within 12 months after the signing of this agreement, Vietnam will prepare to sign an Emission Reduction Purchase Agreement (ERPA) with LEAF/EMERGENT.
ERPA is a new tool to encourage sustainable forest management on a large scale and to help connect countries to other sources of climate financing. This is also Vietnam's effort to join the initiative at COP26, to fulfill its commitments in the Paris Agreement on climate change.
Vietnam is the first country in the Asia-Pacific and one of the first four countries besides Costa Rica, Ecuador and Ghana to sign a Letter of Intent with LEAF/EMERGENT.
LEAF is a public-private alliance that seeks to end tropical deforestation and significantly reduce global greenhouse gas emissions by providing money to protect tropical and subtropical forests.
Emegent is a US-based non-profit organization that serves as LEAF’s coordinator and works with LEAF participants and rainforest nations to create a new market with large-scale transactions of carbon credits at provincial, regional and national levels.
Prime Minister Pham Minh Chinh said Vietnam’s attendance at COP26 once again affirms its commitment to cutting carbon emissions to zero by 2050, and calls for fairness and justice in climate change issues.
While the necessary course for a greener and more sustainable future in global energy policies seems set, Vietnam’s energy transition faces budgetary and capacity challenges, both of which need to be overcome with suitable solutions.