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Yok Don National Forest has great potential in building carbon credits. |
The Central Highlands of Vietnam boasts around 2.5 million hectares of forest, with approximately 2.2 million hectares classified as natural forest and the remainder as planted forest. The average forest cover in the region is 46.19 percent. Given its vast forested area, the Central Highlands is regarded as a significant carbon sink and accumulation source that can generate a substantial amount of carbon credits for trading, thereby creating economic opportunities for both businesses and individuals.
Huge potential
Nam Tay Nguyen Forestry Company is currently managing over 27,200 hectares of forests, consisting primarily of evergreen broadleaf forests in various stages. Given the current area and status, the forests managed by Nam Tay Nguyen Company are undergoing recovery and development after exploitation and accumulating a substantial amount of carbon annually. Consequently, building commercial forest carbon credits is expected to yield significant economic benefits for the company in the near future.
According to Mr. Nguyen Ngoc Binh, Director of Nam Tay Nguyen Company, the forest area under the unit's management includes several recovering states, which have a high potential for carbon accumulation and the formation of carbon credits. Currently, the company has requested the People's Committee of Dak Nong Province and the provincial Department of Agriculture and Rural Development to pilot a model of building carbon credits from forests and has been encouraged to implement it. The company has also hired domestic and foreign consultants to develop carbon credits from the managed forests. It is a new model that the company believes will bring economic benefits to the company as well as the forestry industry in general, Mr. Binh remarked.
Mr. Pham Tuan Linh, Director of Yok Don National Park in Dak Lak Province, has been studying the legal procedures necessary to plan for building carbon credits from forests. According to Mr. Linh, the park currently manages 115,000 hectares of special-use forests, mainly dipterocarp forests with rapid regeneration and growth, which have great potential for forming a large number of carbon credits. Mr. Linh believes that building carbon credits is an inevitable need for forestry units in the future, as it can solve the economic problems faced by forestry units and improve the lives of forest keepers thanks to the benefits that carbon credits bring.
Opportunity to restore forests
According to Prof. Bao Huy, an independent consultant on forest environment and natural resource management, the forest carbon credit market is not yet widespread in Vietnam, with only a few projects currently being implemented. Moreover, there is no actual trading market for these credits. Meanwhile, carbon markets have long been established overseas, where industries and factories that exceed their carbon dioxide quota must purchase additional carbon credits.
Prof. Bao Huy explains that each forest carbon credit represents a reduction or removal of 1 ton of carbon dioxide or its equivalent in other greenhouse gases. Depending on the characteristics of each forest type and state, there is a different potential for carbon accumulation. The Central Highlands forests, for example, are assessed to accumulate a significant amount of carbon reserves, which can bring significant benefits to forest owners if carbon credits are established and commercialized.
Prof. Bao Huy emphasized that the limited resources for forest management, protection, and development pose a significant challenge, especially since forests offer multiple ecological and environmental benefits. Therefore, building a market for forest carbon credits can provide forest owners, businesses, and people with economic resources to invest in forest protection and development. He added that if the forest carbon credit market in Vietnam develops well, it will open up opportunities for forest restoration and sustainable forest management that benefits the economy, society, and environment. The functional sector needs to create favorable conditions through mechanisms and laws that encourage units and people to develop forest carbon credits, Prof. Bao Huy suggested.
Mr. Le Trong Yen, Vice Chairman of Dak Nong Provincial People's Committee, stated that the province is taking various measures to promote the creation of forest carbon credits. Dak Nong province has developed a plan to manage and protect natural forests strictly, and at the same time, cultivate forest trees that can generate carbon credits effectively.
The province is also supporting and encouraging forestry businesses to participate in building forest carbon credits. Moreover, the province is synchronously promoting forest development, combating climate change, and providing forest environmental services to create and trade carbon credits in the future.
Based on Decree No.06/2022/ND-CP issued on January 7, 2022, a carbon credit trading floor will be established and piloted by 2025. By the end of 2027, regulations for managing carbon credits and exchanging greenhouse gas emission quotas and carbon credits will be developed, along with regulations for operating carbon credit trading floors. In 2028, a carbon credit exchange will be established, facilitating the connection and exchange of domestic carbon credits with regional and global carbon markets. This decree provides a crucial legal foundation for Central Highlands forests to potentially generate carbon credits.
Forest carbon credits represent the reduction or removal of 1 ton of carbon dioxide or equivalent greenhouse gases. Carbon credits are a transferable tool certified by the government or independent certification bodies. Forest carbon credits are generated from greenhouse gas emission reduction projects, including reducing deforestation and forest degradation, enhancing carbon sequestration through afforestation, reforestation, regeneration of vegetation cover, and forest management enhancement activities.
