HÀ NỘI — Việt Nam is emerging as a promising destination in the forest carbon credit market, drawing strong interest from major global corporations such as Amazon (US) and Eni (Italy).

These international companies are seeking to purchase significant volumes of credits generated from carbon sequestration and storage projects in Việt Nam's natural forests — a sector in which the Government is steadily building a legal framework and operational mechanisms.

The Ministry of Agriculture and Environment (MAE) is currently soliciting feedback on a draft decree regulating forest carbon sequestration and storage services. Notably, the draft proposes expanding eligibility for purchasing forest carbon credits to include foreign organisations and individuals — a move not permitted under the current 2017 Law on Forestry. It also includes domestic enterprises with low emissions but that voluntarily seek credits as eligible buyers.

This proposed expansion is expected to give a strong boost to Việt Nam’s forest carbon credit market, which currently faces stiff competition from other sectors such as energy, transport and waste treatment — all of which have more mature ecosystems for carbon trading.

The draft also aims to lay a legal foundation for the voluntary carbon credit market within the country, helping extend climate action across various economic sectors.

In practice, Việt Nam has already recorded some initial success in carbon credit transfers. In 2022, a pilot programme across six north-central provinces successfully sold 10.3 million tonnes of carbon dioxide to the World Bank, generating US$51.5 million. However, replicating this model in other localities has proven challenging due to the lack of a comprehensive regulatory framework. Although Lào Cai and Sơn La provinces have been approved for piloting, implementation has yet to commence.

To address this, the draft decree clearly defines the principles of carbon credit transfer, pricing and two payment mechanisms: through contractual agreements or via a carbon exchange platform; and via the Forest Protection and Development Fund.

MAE will issue methodologies for carbon credit valuation, while provincial People’s Committees will be responsible for publishing specific pricing schedules. These mechanisms will form the basis for setting reference prices once Việt Nam’s domestic carbon exchange is operational.

Another key provision is that all carbon transactions must help fulfil Việt Nam’s nationally determined contribution goals in the forestry sector, which has been allocated 3.5 per cent of the 15.8 per cent emissions reductions targeted by 2030. The focus will be on forest areas under all-people ownership.

By proactively finalising the legal framework for the forest carbon credit market, Việt Nam is not only enhancing access to international green finance but also enabling domestic enterprises to align with global sustainable development trends. This is a practical financial tool to protect forest resources, strengthen local livelihoods, and reaffirm Việt Nam’s active role in the fight against climate change. — VNS