Wednesday , May 29 2024

Carbon credit sales fetches Vietnam $51.5M


Vietnam has finalized the sale of 10.3 million tons of CO2 to the World Bank for US$51.5 million, a report by the Ministry of Agriculture and Rural Development said.

The carbon credits are from forests in north-central Vietnam, according to the report submitted to the prime minister on Thursday.

The carbon credit sale is part of the Emissions Reduction Purchase Agreement (ERPA) signed by the bank’s International Bank for Reconstruction and Development and Vietnam’s agriculture ministry on December 22, 2020.

Payment will be made in three stages and Vietnam is set to hand over 10.3 million tons of CO2 to the WB for $5 per ton in the first stage from January 1, 2018, to Dec 31, 2019.

The bank paid $41.2 million, equivalent to 80% of the deal, in August this year while the remaining $10.3 million will be paid once the exchange is completed.

It confirmed that 16.21 million tons of carbon dioxide were reduced in north-central Vietnam during the first stage, 5.91 million tons more than the required amount.

It has offered to buy an additional one million tons.

The agriculture ministry is considering selling the remaining 4.91 million tons to raise more money for forest protection and conservation.

Carbon credits are generated from activities that reduce greenhouse gas emissions, like deforestation prevention, afforestation, reforestation, restoring vegetation, and forest management.

Forests absorb CO2, and so carbon credits are generated at the rate of one for a ton of CO2.

The agriculture ministry said the money earned from carbon credits would be paid to forest managers, provincial authorities and agencies in charge of managing forests.

Some will also go toward improving the livelihoods of the people who work to generate carbon credits.

The Vietnam Forest Protection and Development Fund will be responsible for distributing the money to the six north-central provinces that account for the carbon credits: Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, and Thua Thien Hue.

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