It’s crucial to build carbon credit management mechanism: Vietnam’s Prime Minister



Vietnamese Prime Minister Pham Minh Chinh recently issued a directive emphasizing the urgent need to establish a carbon credit management mechanism, which aims to help local businesses better grasp the carbon market and meet the Nationally Determined Contributions (NDCs) targets. He also instructed all relevant agencies to submit greenhouse gas emission reduction plans by the third quarter.

Vietnam News Agency (VNA) reported that many Vietnamese companies have obtained certified emission reductions (CERs) under the Clean Development Mechanism (CDM) since the mid-2000s and then transformed into carbon credits to exchange in the global voluntary carbon market.

According to Vietnamese Ministry of Natural Resources and Environment (MONRE), the country has registered over 300 projects under the Clean Development Mechanism (CDM), with approximately 150 of them obtaining carbon credits totaling around 40.2 million credits. Vietnam is ranked fourth globally in the number of registered CDM projects, following China, Brazil, and India.

As the carbon market becomes increasingly complicated, the Vietnamese government intends to establish a management mechanism to regulate the development, exchange, and trading of carbon credits. Prime Minister Pham Minh Chinh is instructing relevant agencies to submit plans for reducing greenhouse gas emissions by the third quarter.

In this initiative, MONRE is responsible for establishing the national carbon credit registration system, managing emission reduction projects, and developing carbon credits. They will conduct local pilots before aligning with international standards. The Ministry of Agriculture and Rural Development (MARD) is leading the establishment of the forest carbon database and aims to complete the assessment of forest carbon credit potential by the end of October.

The Ministry of Industry and Trade (MOIT) will be responsible for the management of Renewable Energy Certificates (RECs) and anticipated to propose regulations based on local situation and international experiences by the end of September. The Ministry of Finance (MOF) will work with other ministries to further enhance the carbon market.

Vietnam submitted the Nationally Determined Contributions (NDCs) plan in 2022, which aims to reduce emissions by 146.3 million tons by 2030, accounting for 15.8% of the total emission reduction. With international funds and assistance, this estimated reduction could increase to 403.7 million tons, representing 43.5% of the total reduction.

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