In the report on the implementation of the Greenhouse Gas Emission Reduction Payment Agreement (ERPA) in the North Central region sent to the Prime Minister and Deputy Prime Minister, the Ministry of Agriculture and Rural Development stated that the ERPA was signed on October 22, 2020 between this agency and the International Bank for Reconstruction and Development (IBRD) of the World Bank (WB) group as the Trustee of the Forest Carbon Partnership Facility (FCPF).

The ERPA aims to transfer the emission reduction (GPT) of 10.3 million tons of carbon dioxide (CO2) in the North Central region during the period of 2018-2024 to FCPF through the WB, with a unit price of 5 USD/ton of CO2 equivalent to 51.5 million USD.

Approximately 95% of the transfer results will be transferred back to Vietnam to contribute to the country's commitment to reduce greenhouse gas emissions to achieve the goals of the Paris Agreement on climate change adopted at the 21st Conference of the Parties (COP21).

In addition, the WB has the right to purchase up to 5 million tons of CO2 from the North Central Region Emission Reduction Results Report for the period 2018-2024 at a unit price of 5 USD/ton CO2 under the signed ERPA mechanism. The GPT results are determined for the entire North Central region.

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The Ministry of Agriculture and Rural Development has transferred 10.3 million tons of CO2 to the World Bank (Illustration photo)

The time to calculate emission reduction results is from January 1, 2018 to December 31, 2024. WB will make payments based on results through 3 reporting periods of the Ministry of Agriculture and Rural Development.

On December 11, the Ministry of Agriculture and Rural Development signed documents to transfer 10.3 million tons of CO2 to the World Bank.

The Ministry of Agriculture and Rural Development said that in early August, the WB paid the first ERPA payment of 41,200,000 USD (equivalent to 997,040 billion VND), equivalent to 80% of the emission reduction results according to the signed ERPA.

The remaining amount of 10,300,000 USD equivalent to 249.26 billion VND, the Ministry will coordinate with the WB to carry out payment procedures after completing the transfer of 10.3 million tons of CO2.

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.

This money will be paid to forest owners, commune-level People's Committees and organizations... assigned to manage natural forests; and to other entities with activities related to greenhouse gas emissions to carry out forest protection and development activities, contributing to reducing deforestation and forest degradation and increasing income and improving livelihoods for people working in the forest.

The Ministry of Agriculture and Rural Development also informed that the WB has 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 the remaining 4.91 million tons of CO2, the Ministry will develop a plan for exchange, transfer, and trade to create additional resources for forest protection and development in the North Central region and report to the Prime Minister for consideration and decision.

The Ministry of Agriculture and Rural Development proposes to continue developing the second (January 1, 2020 - December 31, 2022) and third (January 1, 2023 - December 31, 2024) emission reduction results reports to send to the World Bank for appraisal. In case of additional GPT volume, the Ministry will seek negotiation partners and propose exchanges and transfers.

Signing of Regional Emission Reduction Service Payment Agreement: Vietnam gets double benefits

After signing the Payment for Emission Reduction Services Agreement for the North Central Region, Vietnam will benefit in two ways. Because we will have money to develop and preserve forests, and at the same time contribute to combating climate change.