On 4/5, Deputy Prime Minister Ho Quoc Dung chaired a meeting concerning an emissions reduction purchase agreement with the Forest Finance Enhancement Organization (Emergent) and the development of a decree on forest carbon absorption and storage services. The Deputy Prime Minister directed the Ministry of Agriculture and Environment to negotiate a contract to transfer over 5 million forest carbon credits to Emergent, with a minimum price of 10 USD per credit, starting next month.

Deputy Prime Minister speaks at the event. Photo: VGP

This contract builds on a Letter of Intent signed four years ago by the Ministry of Agriculture and Environment and Emergent, the operating body of the Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, at the COP26 Climate Conference.

Vietnam plans to transfer 5,15 million forest carbon credits from the Central Highlands and South Central Coast regions for the 2021-2025 period to Emergent through an Emissions Reduction Purchase Agreement (ERPA). The minimum price is 10 USD per credit. These credits will then be counted towards Vietnam’s Nationally Determined Contributions (NDC), which are national commitments to reduce emissions submitted to the United Nations once every five years.

The ERPA aims to help countries mobilize international finance to implement forest emission reduction activities. These include limiting forest loss and degradation, conserving and enhancing carbon stocks, and sustainably managing forest resources, collectively known as REDD+.

The Ministry of Agriculture and Environment confirms Vietnam has met the technical and institutional requirements to access these payments. The Ministry plans to negotiate, sign, and implement this contract after receiving approval from the Prime Minister or once the forest carbon decree is issued. The Deputy Prime Minister clarified that the Ministry of Agriculture and Environment holds the authority for negotiation and signing. Following the issuance of the decree on forest carbon absorption and storage services, the Ministry must commence negotiations in June.

Regarding the draft decree, the Ministry of Agriculture and Environment has proposed to the Government a revision to decentralize the administrative procedure for "issuing forest carbon credits" to local authorities. The Ministry anticipates completing the assessment and issuance of forest carbon credits for the 2021-2022 period this quarter, and will submit a proposal for credits for the 2023-2025 period in QIII.

The Deputy Prime Minister stressed the urgency of issuing this decree to establish a comprehensive and unified legal framework for local authorities and forest owners to implement forest carbon credit sales. Government leaders largely agreed with the Ministry's decentralization proposal, aligning with the Prime Minister's directive to reduce administrative procedures and delegate authority to localities. However, the Ministry must establish a monitoring and inspection mechanism to ensure a transparent and effective carbon market.

Thuy Truong