Tiếng ViệtAt the year-end conference on December 27, 2023, and the deployment of the forestry sector’s plan for 2024, Deputy Minister Nguyen Quoc Tri announced that Vietnam has officially sold 10.3 million forest carbon credits, generating revenue of 51.5 million USD (equivalent to 1,250 billion VND) for the first time.
According to Deputy Minister Nguyen Quoc Tri, 2023 represents a significant milestone, marking the first time in Vietnam’s forestry sector that 10.3 million forest carbon credits (equivalent to 10.3 million tons of CO2) were successfully sold through the World Bank (WB) at a price of 5 USD per ton, generating revenue of 51.5 million USD (approximately 1,250 billion VND).
The sale of carbon credits is part of the Emission Reductions Payment Agreement (ERPA) for the North Central Region, signed on October 22, 2020, between the International Bank for Reconstruction and Development (IBRD) under the World Bank (WB) and the Ministry of Agriculture and Rural Development.
In early August, the World Bank made the first payment of $41.2 million under the Emission Reductions Payment Agreement (ERPA) to the Ministry of Agriculture and Rural Development, equivalent to 80% of the achieved emission reduction results as per the signed ERPA. The remaining amount of $10.3 million, equivalent to 249 billion VND, will be paid upon the completion of the transfer of 10.3 million tons of CO2.
As of now, the Vietnam Forest Protection and Development Fund has received the first payment from the World Bank and has disbursed the entire amount to urgently plan for the disbursement to forest owners in six provinces in the North Central region.
Among these six provinces, Nghe An has received disbursements of over 282 billion VND, followed by Quang Binh with over 235 billion VND, Thanh Hoa with 162 billion VND, Ha Tinh with 122 billion VND, Thua Thien Hue with 107 billion VND, and Quang Tri with over 51 billion VND.
This funding will be used to pay forest owners, commune-level People’s Committees, and organizations responsible for managing natural forests. Additionally, a portion of the funds will be allocated to other groups involved in activities related to forest development, loss reduction, forest degradation, income enhancement, and livelihood improvement for people engaged in forestry.
In addition to the sold carbon credits, the World Bank has confirmed the results of the first emission reduction period for the entire North Central region (1/1/2018–31/12/2019), achieving 16.21 million tons of CO2 reduction (equivalent to 16.21 million carbon credits). Of this, 10.3 million tons of CO2 were transferred through the signed Emission Reduction Purchase Agreement (ERPA).
With the remaining 5.91 million tons of CO2, the World Bank aims to purchase an additional 1 million tons of CO2. With the remaining 4.91 million tons of CO2, the Ministry is seeking government approval to develop an exchange, transfer, and trade plan to generate additional resources for the protection and development of forests in the North Central region.
Forest carbon credits are generated through greenhouse gas reduction projects, including efforts to reduce deforestation and forest degradation, enhance afforestation, reforestation, and vegetation cover regeneration, as well as activities to improve forest management.
Forest owners can convert the area of managed and protected forests into CO2 absorption quantities, generating carbon credits. These credits can be sold in carbon markets through greenhouse gas emission reduction mechanisms.
Mr. Pham Hong Luong from the Forestry Department stated that the transfer of Vietnam’s carbon credits is highly appreciated by the World Bank.
“From Vietnam’s experience, the World Bank wishes to share and spread this story to other countries worldwide,” Mr. Luong said.
Vietnam is one of the countries rich in forest potential, with over 14.7 million hectares and a forest coverage rate of over 42%.
Source: mard.gov.vn
