Prime Minister: Need to soon approve the project to develop the carbon market

Prime Minister Pham Minh Chinh assigned the Ministry of Finance to promptly complete the draft to submit to the Government for approval of the carbon market development project in July.

On the afternoon of July 14, the Prime Minister chaired a meeting of the National Steering Committee to implement Vietnam's commitment to net zero emissions by 2050. The head of the Government requested the Ministry of Natural Resources and Environment to develop a decree on carbon credit management and submit it to the Government in the second quarter of 2024.

The Ministry of Natural Resources and Environment was also assigned to coordinate with the Ministry of Agriculture and Rural Development to consult with other countries and advise the Prime Minister to issue a directive on forest carbon credit management in Vietnam. Four other ministries were assigned to soon issue regulations on climate change response and greenhouse gas emission reduction. Enterprises with greenhouse gas emissions will be inventoried.

A CO2 credit (carbon credit) is a tradable certificate that represents the right to emit one ton of CO2, or one ton of other greenhouse gas equivalent. The trading method is understood that a company that generates 12 tons of emissions while the limit is 10 tons can buy back 2 tons of credits from a company that emits less than the limit. This is verified by a third party. The ultimate goal of carbon credits is to reduce greenhouse gas emissions into the atmosphere.

The carbon credit trading market in the world is quite active. In Vietnam, the Government has set a target of establishing and operating a pilot carbon credit trading floor by 2025. Three years later, the floor will be officially operated.

Prime Minister Pham Minh Chinh. Photo: Nhat Bac

At the end of 2022, Huong Hoa district, Quang Tri province will sell carbon credits with the first 5 forests in Vietnam to be granted international FSC certification for CO2 absorption and storage. Huong Hoa district has 2,150 hectares of forest, which can absorb 7,000 tons of CO2 per year. The locality is negotiating with a business in the Netherlands to sell carbon credits at a price of 10 USD/ton of CO2.

However, not many localities can sell carbon credits. Many foreign businesses and organizations want to buy carbon credits in Vietnam but face obstacles due to the lack of a clear legal corridor.

When entering Vietnam, businesses need a coordinating agency from the Government to guide them because the carbon market has many fields such as forestry, energy, livestock, veterinary medicine... Vietnam still does not have a carbon rights registration system or a list of carbon facilities and projects for businesses to look for.

Deputy Prime Minister Tran Hong Ha (left cover) and Minister of Natural Resources and Environment Dang Quoc Khanh discussed at the meeting on the afternoon of July 14. Photo: Nhat Bac

At today's meeting, Prime Minister Pham Minh Chinh affirmed that green development, energy transition, and emission reduction are inevitable and irreversible trends. Vietnam cannot stand aside and needs to see this as an opportunity to develop and restructure the economy in a green and sustainable direction. "Green development must be sustainable, inclusive, and comprehensive, leaving no one behind," said the Government leader.

He assigned the Ministry of Industry and Trade to soon submit for promulgation a pilot mechanism for direct electricity purchase and sale between renewable energy generators and large users; and to have a mechanism to encourage the development of rooftop solar power. This policy aims to accelerate equitable energy transition projects, fulfilling Vietnam's commitment at COP26.

Viet Tuan

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