Vietnam Sells 1 Million Forest Carbon Credits to World Bank
Vietnam has sold one million forest carbon credits to the World Bank, earning $5 million. This deal, at a price of $5 per tonne of CO2, is a results-based payment and not a typical commercial price. It demonstrates Vietnam's commitment to reducing emissions and highlights the value of forests in carbon absorption and storage.
The Ministry for Agriculture and Environment in Vietnam plans to strengthen the forestry sector's capacity to generate carbon credits. This includes establishing a legally binding bilateral framework, enhancing monitoring, reporting, and verification (MRV) systems, and promoting advanced emission reduction technologies. The ministry also aims to facilitate access to international carbon credit markets and mobilize financial and technical support for sustainable development and green transition.
Vietnam retains 95% of the emission reduction results to fulfill its Nationally Determined Contributions (NDC) obligations. The sale supports sustainable forest management, improves livelihoods, and maintains biodiversity. Looking ahead, Vietnam is negotiating another emission reduction payment agreement for the Central Highlands and south-central region with the Alliance for Forest Finance Enhancement. To increase credit value in future deals, Vietnam should improve credit quality, perfect MRV systems, and approach international buyers seeking high-quality credits. If successful, this could lead to exchanging and transferring about 5.15 million tonnes of CO2 at a unit price of no less than $10/tonne of CO2, marking the second such agreement in Vietnam's forestry sector.
Vietnam's forestry sector, with over 42% forest cover and large mangrove ecosystems, has significant global potential. The recent deal with the World Bank and ongoing negotiations showcase Vietnam's commitment to reducing emissions and leveraging its forests for sustainable development and green transition.
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