Vietnam to pilot carbon credit trade from 2025

ointly hosted by Giao thong (Transport) Newspaper and Green Innovation and Development Centre (GreenID), the event focused on roadmaps for developing the domestic carbon market, and  policy recommendations and solutions to the scheme.

With the commitments of parties at COP26 to reducing greenhouse gas emissions and neutralising carbon, the global carbon market is forecast to continue to grow strongly. However, in Vietnam, the carbon market is still quite new in terms of knowledge and legal corridors.

According to the Department of Climate Change under the Ministry of Natural Resources and Environment (MoNRE), Vietnam plans to pilot a carbon trade exchange from 2025, which will be officially operated by 2028.

Participants heard that by the end of 2021, the price of carbon emission credits in Europe was over 80 EUR (87.77 USD) per tonne, double that at the end of 2020, as demand from investors surged and the EU tightened its climate policies to meet the target of reducing emissions by 55% by 2030.

According to Pham Hong Luong, Chief of the Office of the Vietnam Administration of Forestry (VAF) under the Ministry of Agriculture and Rural Development (MARD), the forestry sector owns a huge amount of carbon credits.

Vietnam has a relatively high forest coverage rate compared to the world, about 42%, while the global average is about 31%, Luong said.

With that potential, the MARD has recently coordinated with relevant ministries and sectors, with the support of international organisations such as GIZ, to advise and propose the Government to include regulations on carbon capture and storage in the Law on Forestry, aiming to promoting the exchange of carbon credits and emissions reduction results, he noted.

In the future, the Government, the MoNRE, and relevant ministries and sectors, will actively work with other countries that are interested in buying carbon credits such as the Republic of Korea (RoK) and Singapore, or private partners who want to invest in this field in order to realise emissions reduction commitments in their countries, he added.

Nguyen Thanh Cong, from the MoNRE's Department of Climate Change, said currently, there are many units interested in carbon credit trading, adding that in the future, the orientation of carbon credits will mainly focus more on renewable energy sources, especially solar energy, offshore wind power and biomass energy; and energy saving projects.

Vietnam needs to develop appropriate legal corridors and mechanisms to promote the development of the carbon credit market, and ensure the harmonisation of benefits and revenue for carbon credit investors and stakeholders, particpants said.

These are the challenges that Vietnam needs to overcome in order to catch up with international carbon markets, they added.

(Source: VNA)