Vietnam earns trillions of dong from selling carbon credits

Vietnam has just transferred 10.3 million tons of CO2 to the World Bank, earning nearly 1,250 billion VND.

This is the latest information that the Ministry of Agriculture and Rural Development has just reported to the Prime Minister. Accordingly, the number of carbon credits obtained from forests in the North Central region. The sale of carbon credits is part of the greenhouse gas emission payment agreement (ERPA) 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.

In phase one, the authorities signed documents to transfer 10.3 million tons of CO2 to the WB, worth 51.5 million USD (equivalent to a unit price of 5 USD per ton).

In early August, the WB paid the first installment of ERPA to the Ministry of Agriculture and Rural Development, which was 41.2 million USD (equivalent to 997 billion VND), achieving 80% of the emission reduction results according to the signed ERPA. The remaining amount of 10.3 million USD, equivalent to 249 billion VND, will be paid after completing the transfer of 10.3 million tons of CO2.

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*

The Ministry of Agriculture and Rural Development said that this money will be paid to forest owners, commune-level People's Committees and organizations... assigned to manage natural forests. In addition, a portion of the money will be spent on other groups with activities related to developing and reducing deforestation and forest degradation, increasing income and improving livelihoods for people working in this profession.

Vietnam Forest Protection and Development Fund is the focal agency to receive, manage, and use funds from ERPA and coordinate for the Forest Protection and Development Funds of 6 provinces in the North Central region including: Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri and Thua Thien Hue.

In addition to the sold credits, the WB confirmed the emission reduction results of the entire North Central region in the first period (January 1, 2018 - December 31, 2019) reaching 16.21 million tons of CO2 (equivalent to 16.21 million credits). Of which, the amount transferred according to the signed ERPA is 10.3 million tons of CO2.

With 5.91 million tons of CO2 remaining, the WB wants to buy an additional 1 million tons of CO2. With 4.91 million tons of CO2 remaining, the Ministry is asking the Government to approve the development of a plan for exchange, transfer, and trade to create additional resources for forest protection and development in the North Central region.

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

Source link