Vietnam has piloted selling 10.3 million certificates of forest carbon credits, earning US$51.5 million. The Ministry of Agriculture and Rural Development is studying to legalize it so that more localities can have revenue from this service.
Speaking at a press conference on the afternoon of June 19, Deputy Minister of Agriculture and Rural Development Nguyen Quoc Tri and Director of the Forestry Department Tran Quang Bao informed that due to drought this year and low water levels, several hydroelectric reservoirs in the North and Central regions had to temporarily suspend their operations, leading to a decrease in revenue from the Forest Environmental Service Fund.
However, in return, Vietnam has sold forest carbon credits this year, which will help forest growers earn significant additional income. Specifically, Vietnam has sold approximately 10.3 million tons of carbon credits in 6 provinces in the North Central region under the E3 contract and each of the credits can fetch as much as US$ 5 per ton, earning a total of US$51.5 million.
From the pilot sale of carbon credits in the North Central region based on the Government’s Decree 107, the Department of Forestry is currently helping the Ministry of Agriculture and Rural Development to develop a draft law on the sale of carbon credits in many other localities.
Deputy Minister Nguyen Quoc Tri said that Vietnam’s forests have characteristics such as broad-leaved trees, large trees, and many layers of canopy known to absorb a lot of carbon that forests in other countries do not have. It was initially expected to sell only 10.3 million tons of carbon credits in the North Central region within 5 years, but responsible agencies evaluated later, the country can sell more than 10.3 million tons of carbon credits.
According to Mr. Tran Quang Bao, the country has sold 10.3 million tons of carbon credits just in 2018 and 2019.
Deputy Minister Nguyen Quoc Tri revealed that according to competent agencies, every year, the country’s forests can absorb up to 70 million tons of carbon, and the emission of the forestry sector including logging, afforestation, and even forest fires, deforestation every year is about 30 million tons of carbon.
Thus, each year, the Southeast Asian country has the remaining about 40 million tons of credit. He calculated that with the carbon price of US$ 5 per ton, Vietnam can earn about US$200 million per year. Deputy Minister Nguyen Quoc Tri affirmed that this will significantly improve forest growers’ income.
To invest in forest development, the State needs to spend about VND1 trillion from the budget each year on average. According to the current calculation with an investment of about VND1 million per ha for a total of 11 million hectares of forest nationwide, the country annually needs to invest up to VND11 trillion.
Therefore, the Deputy Minister of Agriculture and Rural Development emphasized thanks to the support revenue from the Forest Environmental Service Fund of about VND3,700 billion in 2022 and the sale revenue of carbon credits of more than VND4 trillion, it will significantly increase income for forest growers in Vietnam.
Leaders of the Ministry of Agriculture and Rural Development also affirmed that, of these revenues, the State only keeps 0.05 percent to invest in management work, the rest is paid to forest owners.
