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Viet Nam earns US$51.5mn from first forest carbon credit sale

VGP - Viet Nam sold over 10 million forest carbon credits in 2023, bringing in a total revenue of US$51.5 million.

January 04, 2024 3:47 PM GMT+7
Viet Nam earns US$51.5mn from first forest carbon credit sale- Ảnh 1.

According to the Report of the Forestry Department, the country planted about 250,000 hectares of forest, reaching 102 percent of the 2023 plan. The forest coverage rate is 42.02 percent, matching the planned target.

Total revenue from all forest environmental services in 2023 reached VND4,130.4 billion.

Deputy Minister of Agriculture and Rural Development Nguyen Quoc Tri said 2023 marked a significant milestone as the forestry sector has successfully sold 10.3 million forest carbon credits (10.3 million tons of CO2) through the World Bank (WB).

With a credit selling price of US$5/ton of absorbed carbon, the contract's total value is up to US$51.5 million (about VND1,250 billion).

The sale of carbon credits is part of the Emission Reductions Payment Agreements (ERPA) in the North Central region signed on October 22, 2020, between the International Bank for Reconstruction and Development (IBRD) of the World Bank (WB) and the Ministry of Agriculture and Rural Development (MARD).

In early August 2023, the WB paid the first instalment of ERPA to MARD of US$41.2 million (equivalent to VND997 billion), achieving 80 percent of the emission reduction results according to the signed ERPA.

The remaining amount of US$10.3 million, equivalent to VND249 billion, will be paid after completing the transfer of 10.3 million tons of CO2.

The Viet Nam Forest Protection and Development Fund has received the first payment from the WB and has disbursed it in full so that the provinces can urgently make payment plans for forest owners in six North Central provinces.

In addition to the number of credits sold, 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).

Deputy Minister Nguyen Quoc Tri also said that 2023 will be a year of many difficulties for the forestry industry, including supply and demand chain disruption affecting trade, logistics problems and climate change.

However, Deputy Minister Nguyen Quoc Tri also acknowledged the forestry industry's efforts to overcome difficulties in the past year to achieve remarkable results.

In 2024, he suggested that the forestry industry should pay attention to the work of legal documents in order to have policy mechanisms issued promptly./.