Illustrative photo (Photo: VNA) Hanoi (VNA) – Vietnam has received a 51.5 million USDpayment from the World Bank for verified emissions reductions - commonly referred to as carboncredits - for reducing 10.3 million tonnes of CO2 in the 2018-2024period, said Director of the Department of Forestry under the Ministry ofAgriculture and Rural Development (MARD) Tran Quang Bao at the ministry’squarterly press conference on April 1.
According to the official, 80% of the sum has been distributedto six north central provinces and the remaining 20% will be distributed to the localities in the next 1-2 months.
Regarding benefit sharingwhich refers to how the value created from the sale of carbon credits isdistributed, Bao said that the Government issued a decree onpiloting the transfer of emission reduction results and financial management ofgreenhouse gas emission reduction payment agreements in the north centralregion.
Accordingly, only 0.5% will be used to coordinate the generalagreements and 3% to perform measurement, control, supervision, training, andtechnical guidance. The remaining 96.5 % is allocated to targeted localities.
Based on the contracted forest area, the localities willallocate the above amount to people and communities that signed contractsto protect and manage the forests.
Currently, the MARD issued a benefit-sharing plan and is organising trainingto distribute that benefit to localities. The main beneficiaries arecommunities, ethnic minorities, and forest keepers.
According to the Forestry Department, the Emission ReductionsPayment Agreement (ERPA) in the north-central region was signed on October 22,2020, between the MARD and the International Bank for Reconstruction andDevelopment (IBRD) under the World Bank Group as the Trustee of the ForestCarbon Partnership Facility (FCPF).
The ERPA aims at transferring reduced emissions of 10.3 million tonnesof CO2 in the northern part of the central region in 2018-2024 to the FCPF via the World Bank, with the unit price of5 USD per tonne of CO2, worth 51.5 million USD in total.
About 95% of the transferred results will be returned to Vietnamto contribute to the national commitment to greenhouse gas emissions to obtainthe goals of the Paris Agreement on climate change approved at COP21.
According to the MARD, theWorld Bank has confirmed emission reductions of 16.21 million tonnes of CO2(16.21 million carbon credits) in the north central region in the first period(from January 1, 2018, to December 31, 2019), including the 10.3 million tonnesof CO2 transferred under ERPA. The World Bank agreed to buy 1 more million tonnes of theremaining 5.91 million tonnes.
The ministry reported to the Prime Minister about the remainingcredits of 4.91 million tonnes of CO2 for consideration and decision. At thesame time, it is continuing to coordinate with the World Bank to measure andconfirm the amount of credits for Phase 2 (2020-2022) and Phase 3 (2023-2024).It is also looking for partners that have demand for the carbon credits toensure national interests and mobilise additional resources for forestprotection and development in the north central region.
According to the Forestry Department, Vietnam has not had amandatory market for carbon credits. The transfer of emission reduction resultsis carried out through bilateral agreements between relevant parties.
Regarding the forest carbon credit market, the Prime Ministerhas assigned the MARD to implement two agreements to transfer emissions reductionresults including the ERPA in the north central region and another ERPA in the south central and Central Highlands regions.
In the ERPA in the south central and Central Highlands regions, Vietnamtransfers to LEAF/Emergent 5.15 million tonnes of CO2 to reduce emissions fromforests in the regions in the 2022-2026 period.
LEAF/Emergent will pay for this service at a minimum price of 10USD per tonne of CO2 with a total value of 51.5 million USD. The area ofcommercial and service forests registered to reduce emissions is 4.26 millionha, including 3.24 million ha of natural forests and 1.02 million ha of plantedforests.
The MARD submitted the registration application for creditgranting according to TREES standards and organised technical negotiationsessions with Emergent to complete the negotiation plan and soon submit itto the Prime Minister for consideration and decision./.
