Brian Jeffrey
During late 2023, Vietnam sold 10.3 million tons of CO2 to the World Bank at $5 per ton, totaling $51.5 million – the country’s first forest carbon credit transaction. Profits were shared among forest owners in certain regions.
The Department of Forestry disclosed that various localities have recently received offers from domestic and international entities and individuals to provide forest carbon services, involving carbon absorption, storage, measurement, reporting, appraisal, distribution, and commercialization.
Provinces like Quang Nam, Son La, Lao Cai, and Thanh Hoa have put forth a pilot plan for investing in forest carbon credit trading.
At a recent green financing workshop, Nghia, a member of the National Advisory Council for Financial and Monetary Policies and head of CODE, an institute for carbon finance development consulting, mentioned that although the carbon credit market is flourishing, Vietnam faces procedural hurdles preventing credit sales.
CODE is currently in the process of forest carbon credit measurement, utilizing both manual and mechanical methods to compare results. Manual measurements cost VND178 million per hectare, making the process quite expensive for vast forested areas, such as a 500-hectare forest.
Foreign experts have been engaged by CODE for program development, focusing on the measurement of carbon in bamboo forests (known for high carbon levels) and other biomass (requiring mechanical measurement for roots and branches).
For CODE, afforestation serves as both a research endeavor and a profitable venture, anticipating annual profits of around $2 million.
CODE’s rejuvenation efforts in a severely damaged forest region have helped restore tropical rainforest conditions, fostering the return of wildlife and flourishing ironwood trees. Collaborations with international scientists also indicate interest in purchasing carbon credits from Southeast Asia.
Shifts from ecotourism to afforestation have been prompted by proposals for carbon credit purchases, while enabling residents to obtain “red books” (land use right certificates) to facilitate carbon sales.
Amid the carbon finance development process, Nghia highlighted several challenges, including issues of carbon ownership in relation to forest ownership and the regulated distribution of revenue from forest carbon credit sales.
Concerning the establishment of a carbon credit trading platform, Nghia proposed modifications to Decree 06 to enable carbon credit transactions on trading floors.
Another dilemma lies in carbon pricing. Though successful negotiations have been made regarding credit sales at $30 per credit, procedural obstacles prevent actual sales.
Furthermore, there is unresolved surplus carbon amounting to 4.9 million tons, with enterprises seeking assistance from CODE to acquire these credits, which are valid for a maximum of 17 months.
