The Vietnamese government has issued a resolution allowing the transfer of 1 million tons of reduced CO2 emissions from planted forests in the north-central region to the International Bank for Reconstruction and Development, part of the World Bank Group.
This amount is part of the 5.9 million tons of CO2 surplus remaining after Vietnam transferred its emission reduction results from phase 1, earning 51.5 million USD.
According to the agreement, about 95% of this transferred amount will be returned to Vietnam by the World Bank to implement its Nationally Determined Contribution (NDC). The NDC is each country's commitment to reduce greenhouse gas emissions under the Paris Climate Agreement, submitted to the United Nations every two years.
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Pine forest in Thanh Hoa, 3/2024. Photo: Le Hoang |
Pine forest in Thanh Hoa, 3/2024. Photo: Le Hoang
The transfer price is based on the payment agreement reached five years ago between the two parties. At the average rate of 5 USD per ton from the previous payment, Vietnam is expected to receive 5 million USD for this transfer of 1 million carbon credits.
These funds will be used to pay forest owners, commune-level People's Committees (UBND), and organizations responsible for managing natural forests in the five provinces covered by the project: Thanh Hoa, Nghe An, Ha Tinh, Quang Tri, and Hue. A portion of the funds will also be allocated to other groups involved in activities related to forest development, reducing deforestation and forest degradation, and improving the livelihoods of people working in this sector.
In 2020, the Ministry of Agriculture and Rural Development and the International Bank for Reconstruction and Development (IBRD) signed a payment agreement for greenhouse gas emission reductions in the north-central region, with the phase 1 transfer volume at 10.3 million tons of CO2. The actual emission reductions from 2018-2019 in the north-central region exceeded this, resulting in a surplus of 5.9 million tons after the transfer. The IBRD proposed to purchase an additional 1 million tons.
Last year, the Ministry proposed to the Prime Minister a plan to transfer this additional 1 million tons of CO2 to secure further funding for forest protection and development. The remaining 4.9 million tons of CO2 are being held to fulfill Vietnam's emission reduction commitments, as finding transfer partners is challenging, and the value of emission reductions tends to decrease over time.
Thuy Truong
