According to the Department of Forestry (MARD), recently, some localities have received proposals from domestic and international organizations and individuals to explore and propose the implementation of forest carbon absorption and storage services (forest carbon services), including measurement, reporting, verification, and trade of forest carbon credits.
However, as this is a new field and the legal framework is not yet comprehensive and detailed, further research and improvement are needed in the coming time. Therefore, the Department of Forestry provides information for the Departments of Agriculture and Rural Development of the provinces for reference and joint attention, cooperation, and implementation.
Continue to sell forest carbon credits
Regarding the implementation of forest carbon services, according to the Department of Forestry, to implement the nationally determined contributions (NDCs), the Government has assigned ministries managing industries and fields with greenhouse gas emission reduction targets by 2030. The agriculture sector is assigned to reduce emissions by 129.8 million tons of CO2eq.
Accordingly, the MARD has assigned the forestry and land use sector to reduce a minimum of 39.31 million tons of CO2eq by 2025 and 79.1 million tons of CO2eq by 2030.
According to the report on the results of the implementation of REDD+ in Vietnam in the period of 2014-2018, the emission reduction from forests reached 56.7 million tons (including 20.3 million tons of reduced emissions and 36.4 million tons of increased absorption).
The results of emission reduction and increased absorption are due to the efforts of the whole country in restoring, protecting, and developing forests in the past time. Therefore, the forestry sector has potential and is gradually proactively completing the conditions, the system of legal documents, and detailed guides to participate in the domestic and international carbon markets after fully implementing the NDC commitments.
Vietnam has received $51.5 million from selling forest carbon credits. Photo: Thung Nham |
The Department of Forestry also said that Vietnam is currently implementing only one forest carbon credit transfer program, which is the Emission Reductions Payment Agreement for the North Central Region (ERPA) signed on October 22, 2020, between MARD and the International Development Association of the World Bank Group.
According to ERPA, Vietnam transfers to the World Bank 10.3 million tons of CO2 with a unit price of $5/ton of CO2. The total payment value is $51.5 million, of which 95% of the transferred volume will be counted towards Vietnam’s NDC.
To implement this ERPA, the Government has issued Decree No. 107 stipulating the pilot transfer of emission reduction results and financial management of ERPA.
In addition, MARD and the Forest Finance Enhancement Organization (Emergent), the administrative agency of the Lowering Emissions by Accelerating Forest Finance (LEAF) alliance, are preparing to negotiate, sign, and implement a Purchase Agreement emission reduction for the Central Highlands and South Central Coast according to the Letter of Intent (LoI) signed on October 31, 2021.
It is expected that Vietnam will transfer to LEAF/Emergent 5.15 million tons of CO2 from the Central Highlands and South Central Coast regions for the period of 2021-2025. The entire volume of transferred credits will be counted towards Vietnam’s NDC commitments.
Quota allocation for regions
In the past time, some provinces such as Quang Nam, Son La, Lao Cai, and Thanh Hoa have proposed to build and implement pilot projects on investing in and trading forest carbon credits. However, up to now, these provinces have not implemented due to a lack of legal regulations and detailed guidance.
The Department of Forestry also mentioned a series of difficulties and obstacles in implementing forest carbon services. For example, policies and legal regulations have been formed but lack detailed regulations and guidance for implementing forest carbon services, including ownership of forest carbon, regulations on exchange and transfer, and mechanisms for managing and using revenue from forest carbon services.
The issue of emission reduction quotas contributing to the implementation of NDC targets and the potential volume of forest carbon credits that can be traded by each locality has not been determined and allocated. Information and awareness of many parties related to forest carbon services are still limited. In addition, forest carbon standards and a system for measuring, reporting, verifying, and issuing credits for application in the domestic carbon market have not been built.
MARD will deploy to evaluate the potential for reducing emissions and absorbing carbon from forests at the national, regional, and local levels by 2030 and taking into account the direction by 2050.
Accordingly, it will allocate emission reduction quotas from forests for ecological regions and localities annually in the period of 2021-2030 to implement NDC targets. It will also develop national standards for forest carbon credits and detailed regulations on the system for measuring, reporting, and verifying forest carbon emission reductions/increased absorption.
At the same time, it will build a database and a system for registering and managing forest carbon credits. It will also advise on the negotiation, signing, and implementation of the Emission Reduction Purchase Agreement for the Central Highlands and South Central Coast (ERPA) with the Forest Finance Enhancing Organization (Emergent) and other partners…
Currently, ministries and branches are building and perfecting the legal basis and institutional, technical, and capacity conditions to deploy the domestic carbon market and participate in the world carbon market.
Therefore, the Department of Forestry recommends that the Departments of Agriculture and Rural Development, the trade, exchange, and offset of forest carbon credits with domestic and international organizations and individuals must comply with the law and are only implemented for the surplus volume of emissions after completing the responsibility to contribute to the NDC according to the allocated quota.
Tam An
