Carbon credit where credit is due for Việt Nam

Carbon credit where credit is due for Việt Nam

At an average of $5 per tonne in the agreement, Việt Nam can earn $5 million for this transfer of 1 million carbon credits.

A view of a forest in Thanh Hóa Province. Photo baochinhphu.vn

Việt Nam is cashing in on its green credentials, transferring another million tonnes of verified carbon credits to the World Bank.

Under a newly issued resolution, the Government has approved the transfer of one million tonnes of carbon emissions reductions from forests planted in the North Central region to the World Bank’s International Bank for Reconstruction and Development (IBRD).

The volume is part of the 5.9 million tonnes of surplus carbon emissions reductions after Việt Nam transferred Phase 1 credits, earning US$51.5 million.

According to the agreement, about 95 per cent of this transfer will be returned to Việt Nam by the partner to implement the Nationally Determined Contribution (NDC). The NDC is each country’s commitment to reduce greenhouse gases under the Paris Agreement, submitted to the United Nations every two years.

The transfer price follows the payment agreement signed five years ago between the two sides. At an average of $5 per tonne, Việt Nam can earn about $5 million for this transfer of 1 million credits.

The proceeds will be paid to forest owners, commune-level People’s Committees and organisations assigned to manage natural forests in five localities under the project: Thanh Hóa, Nghệ An, Hà Tĩnh, Quảng Trị and Huế. Part of the money will also go to groups working to reduce deforestation and forest degradation, raise incomes and improve livelihoods for people in the sector.

In 2020, the Ministry of Agriculture and Environment and the IBRD signed an agreement to pay for greenhouse gas reductions in the North Central region, with Phase 1 set at 10.3 million tonnes of carbon emissions reductions.

The 2018–2019 results exceeded that level, leaving a surplus of 5.9 million tonnes. The IBRD later proposed to buy an additional 1 million tonnes.

Last year, the ministry proposed to the Prime Minister a plan to transfer an additional 1 million tonnes to generate more funds for forest protection and development activities.

The remaining 4.9 million tonnes are being kept to implement Việt Nam’s own emission reduction commitments, as it is difficult to find transfer partners and the credits lose value over time. 

Bizhub