Prime Minister Pham Minh Chinh has just signed Directive No. 13/CT-TTg dated May 2, 2024, on strengthening the management of carbon credits. Illustrative photo: ITN
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On May 2, Prime Minister Pham Minh Chinh has just issued Directive No. 13/CT-TTg on “Strengthening the management of carbon credits in order to implement the Nationally Determined Contribution,” requesting ministries to coordinate in urgently studying the establishment of a national registry system for carbon credits; determining the potential for reducing emissions and absorbing carbon from forests as a basis for carbon credit exchange activities with international partners.
Urgent development of carbon market
The above Directive emphasizes the implementation of the commitment to net zero emissions by 2050 at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change, Vietnam has updated the Nationally Determined Contribution (NDC), specifying international commitments on emission reduction.
Therefore, the implementation of NDCs is the responsibility of countries to implement the United Nations Framework Convention and the Paris Agreement on climate change (including the goal of reducing greenhouse gas emissions in the fields of energy, agriculture, land use and forestry, waste management, industrial processes).
“To ensure the implementation of the commitment to reduce greenhouse gas emissions by 2030 as per NDCs and achieve net zero emissions by 2050, the development and implementation of greenhouse gas emission reduction plans for various sectors; development of carbon market and mechanisms for management of carbon credits are very urgent,” the Directive emphasizes.
According to Prime Minister Pham Minh Chinh, developing carbon markets and mechanisms for management, exchange, and offsetting of carbon credits is an important solution for achieving the goal of reducing greenhouse gas emissions at a reasonable cost, promoting development, contributing to enhancing the competitiveness of enterprises, and increasing the income of people participating in greenhouse gas emission reduction projects and protecting and developing forests.
In Vietnam, from the mid-2000s to the present, many enterprises have implemented programs and projects to create carbon credits and exchange carbon credits to the world on the voluntary market, especially carbon credits from programs and projects under the Clean Development Mechanism (CDM).
However, during the past time, there has been a lot of information and public opinion that is not really complete, comprehensive, or accurate about the carbon market and carbon credit management mechanisms, especially activities related to creating credits, managing forest carbon credits, and some other sectors. Many organizations, businesses, and people do not have a correct understanding of the carbon market and the method of creating carbon credits that can be traded on the market.
Towards exchanging forest carbon credits with international partners
Given the above situation, Prime Minister Pham Minh Chinh requested ministries, branches, and localities to strengthen carbon credit management in order to promote the development of carbon markets, ensure the implementation of NDCs, harmonize the interests of the state, businesses, people, and participating partners; provide accurate and complete information about the market and methods of creating carbon credits that can be traded on the market.
Accordingly, the Prime Minister requested the Ministries of Natural Resources and Environment, Industry and Trade, Agriculture and Rural Development, Transport, and Construction to urgently issue greenhouse gas emission reduction plans at the sector level and organize their implementation to ensure the achievement of the target commitment as per NDCs, to be completed in the third quarter of 2024; assess the level of readiness to participate in the carbon market in a number of sectors.
Specifically for the Ministry of Natural Resources and Environment, the Prime Minister requested to urgently study the establishment of a national registry system for carbon credits, manage programs, projects, activities to reduce greenhouse gas emissions, and create carbon credits to serve the pilot implementation and development of domestic carbon markets, exchange with international markets.
The Ministry of Agriculture and Rural Development shall preside over and coordinate with the Ministry of Natural Resources and Environment, related agencies, and localities with forests to urgently develop a database on the current status and assessment of potential for reducing emissions and absorbing carbon from forests at the national, regional, and local levels by 2030 and take into account 2050; determine the potential for reducing emissions and absorbing carbon from forests contributing to the implementation of the NDC target as a basis for carbon credit exchange activities with international partners. This task shall be completed before October 31, 2024.
In addition, the Ministry of Agriculture and Rural Development shall coordinate with the Ministry of Natural Resources and Environment, related agencies, and localities with forests to develop national standards for forest carbon credits and detailed regulations for measurement, reporting, and verification of the amount of carbon absorbed by forests; develop a pilot policy and mechanism for payment of carbon credits based on the results for the high-quality and low-emission rice farming sector.
The Ministry of Industry and Trade shall preside over and coordinate with relevant agencies to review the legal basis, domestic practices, and international experience in the management, purchase, and exchange of renewable energy certificates (RECs) in conjunction with the implementation of national emission reduction targets, and report to the Prime Minister before September 30, 2024.
The Ministry of Finance shall preside over and closely coordinate with the Ministry of Natural Resources and Environment, other ministries, and related agencies to finalize the Project on the Development of Carbon Market in Vietnam, submit it to the competent authority for approval, ensuring the set target of organizing, operating the pilot and official implementation; study and assess the experience of countries in the region and the world in the process of building, managing, operating, and developing carbon markets.
The Prime Minister also requested the People’s Committees of provinces and centrally-run cities to review and assess the current status of activities and measures to reduce greenhouse gas emissions in the area to evaluate the potential for creating carbon credits and exchanging carbon credits.
Along with that, localities shall coordinate with the Ministry of Natural Resources and Environment, related ministries, and sectors to review and request organizations and enterprises implementing programs and projects under the mechanism of exchange and offsetting of carbon credits to be responsible for providing information about the programs, projects, number of carbon credits created and exchanged to the Ministry of Natural Resources and Environment for synthesis as per regulations.
