This market will strengthen the activities of connecting and exchanging carbon credits between Viet Nam with regional and international markets.

According to the draft, Viet Nam will pilot the operation of this carbon credit market in 2025.

The project is built on the basis of the Government's Decree 06/2022/ND-CP. This decree details the reduction of greenhouse gas emissions, the protection of the ozone layer and the development of the carbon market.

Accordingly, from now until the end of 2027, Viet Nam will focus on developing regulations on carbon credit management and exchange of greenhouse gas emission quotas and carbon credits.

It will develop regulations on operating the carbon credit market, pilot implementation of the mechanism for exchanging and clearing carbon credits in potential areas in accordance with domestic laws and provisions of international conventions to which Viet Nam is a member.

It will also carry out activities to improve capacity for and awareness on carbon market development.

The operation of the carbon trade exchange contributes to reducing greenhouse gas emissions under previous climate commitments, especially the goal of reducing net zero emissions by 2050 under the 26th United Nations Climate Change Conference of the Parties (COP26).

According to the project, the Ministry of Natural Resources and Environment has the role of presiding over and coordinating with relevant ministries to organise the pilot operation and official operation of the carbon credit trading floor and compile regulations for management, monitoring and supervision of this market.

Nguyen Tuan Quang, deputy director of the Department of Climate Change, Ministry of Natural Resources and Environment, said the ministry has issued Circular No. 17/2022/TT-BTNMT stipulating techniques for measurement, report and assessment of mitigation for greenhouse gas emissions and greenhouse gas inventory in the waste management sector.

The enterprises in the waste sector must perform the responsibility to provide data and information relating to greenhouse gas inventory, implement a greenhouse gas inventory and develop a periodic inventory report every two years from 2024 onwards.

At the same time, these enterprises must develop and implement measures to reduce greenhouse gas emissions in the period from 2023-2025 in accordance with their production and business conditions.

Therefore, enterprises need to develop mitigation measures now to meet the requirements of reducing greenhouse gas emissions from 2026, otherwise it may lead to production stagnation. This is also the basis for businesses to participate in the carbon market and increase financial resources for reinvestment.

Expert Le Xuan Nghia, former vice chairman of the National Financial Supervisory Commission, the investor of a carbon project in Ha Tinh Province, said that carbon credits are increasingly scarce because few countries still have primary forest or if the countries have this kind of forest it has low carbon absorption capacity.

Viet Nam has a lot of potential because forest covers three-quarters of its area. However, in the past, there was deforestation to plant industrial crops, so the area of primary forest was reduced. Now, the country mainly develops planted forests.

A representative of the General Department of Forestry, Ministry of Agriculture and Rural Development, assessed the great potential of carbon credit market in the future. Now, Viet Nam has about 14.7 million hectares of forest, including more than 10 million hectares of natural forest and 4.5 million hectares of planted forest.

A carbon credit is a kind of permit that represents one tonne of carbon dioxide removed from the atmosphere. They can be purchased by an individual or, more commonly, a company to make up for carbon dioxide emissions that come from industrial production, delivery vehicles or travel.

It was estimated that Viet Nam will be able to sell 57 million carbon credits to international organisations annually. Each of the credits can fetch as much as US$5.

In 2020, forest reserves in Viet Nam stood around 990 million cu.m and the figure can reach up to 1.25 billion cu.m in the next 10 years. Carbon storage services are now available in 23 cities and provinces nationwide, including Quang Nam.

With a total of 628,000 hectares of forest, the south-central province of Quang Nam can store approximately one million tonnes of carbon every year, meaning one million carbon credits can be put up for sale internationally.

The province has asked for the government’s permission to be the first in the country to join the voluntary carbon market. It expects to sell some 6 million carbon credits for about $30 million by 2025. — VNS