Ministry of Agriculture wants to auction nearly 5 million tons of carbon

The above information has just been stated by the Ministry of Agriculture and Rural Development in a report sent to the Prime Minister on the implementation of the greenhouse gas emission reduction payment agreement (ERPA) in the North Central region and the proposal to transfer the remaining greenhouse gas emission reduction amount in the period 2018-2019.

Specifically, last October, the World Bank (WB) sent a letter to the Ministry confirming that the emission reduction results from the first report reached 16.21 million tons of carbon (CO2). This result was enough to transfer 10.3 million tons of CO2 according to the previously signed agreement. Each ton of CO2 has a transfer price of 5 USD, the amount of revenue is equivalent to 1,250 billion VND.

After transferring 10.3 million tons of CO2, Vietnam still has a surplus of 5.91 million tons of CO2 in the 2018-2019 period. The Ministry proposed to transfer an additional 1 million tons of CO2 to the World Bank. For the remaining amount, the Ministry wants the Prime Minister to propose that the World Bank introduce potential partners to buy this emission reduction amount according to the method implemented in the signed ERPA, or support Vietnam in connecting to pilot auctions through international trading floors. Because at this time, it is difficult for Vietnam to find partners for trade exchanges when this sector is still quite new.

If the pilot auction is approved, the Prime Minister needs to assign the Ministry of Finance to preside over and coordinate with relevant agencies to develop a plan.

Quang Binh has a forest cover area of up to 68%. Photo: Kim Dung & Hang Minh — Quang Binh has a forest cover area of up to 68%. Photo: *Kim Dung & Hang Minh*

Currently, the world's voluntary market carbon price fluctuates between 2-4 USD per ton of CO2, of which the carbon price of the forestry and land use sector in 2021 reached 3.07 USD per ton. According to the carboncredits.com update, the carbon price of the natural ecosystem on March 5 reached 1.57 USD per ton of CO2.

Regarding the sale of Carbon credits, Vietnam has recently received a payment of 51.5 million USD for verified emission reduction results from the World Bank due to the reduction of deforestation, forest degradation and increased carbon storage through afforestation and reforestation.

The sale of carbon credits is part of the greenhouse gas emission payment agreement for the North Central region signed on October 22, 2020 between the International Bank for Reconstruction and Development (IBRD) of the World Bank (WB) and the Ministry of Agriculture and Rural Development of Vietnam.

According to the WB, Vietnam is the first country in the East Asia Pacific region to receive payments based on emissions reduction results from the WB's Forest Carbon Partnership Facility.

The leaders of the Ministry of Agriculture and Rural Development acknowledged that the success of the REDD+ program brings Vietnam closer to implementing its nationally determined contributions under the Paris Agreement on climate change, while protecting important areas for biodiversity conservation.

Forest carbon credits are generated from greenhouse gas emission reduction project activities such as reducing deforestation and forest degradation; enhancing afforestation, reforestation, vegetation regeneration and enhancing forest management activities.

Forest owners can convert the area of forest they are managing and protecting into the amount of CO2 absorbed, into carbon credits, and can sell these credits in the carbon market through the greenhouse gas emission reduction mechanism.

Thi Ha

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