The lucrative carbon credit market promises substantial environmental benefits, but those promises remain challenging to fully realize.
Ho Chi Minh City’s transportation, agriculture, forestry, and energy sectors are considered to have significant potential for generating carbon credits and participating in the future carbon market.
The Saigon - Can Tho high-speed railway project, proposed by CT Trains Company has drawn particular attention, said Nguyen Vo Truong An, Deputy General Director of Asean Carbon Credit Exchange Joint Stock Company. Studies reveal that the project is projected to achieve a 10-million-ton annual decrease in CO2 emissions, a result of significantly reducing vehicular traffic in the region. This level of emissions reduction would yield a considerable quantity of carbon credits, translating to substantial financial returns upon sale.
Dinh Thuy Chi of Urban Railway Company No. 1 highlighted that Metro Line 1 (Ben Thanh - Suoi Tien) offers significant environmental benefits. As a high-capacity transport system, the metro consumes far less energy than other modes of transportation, making it an effective solution for environmental protection.
Metro Line 1 is projected to handle approximately 40,000 passenger trips daily by 2025. This capacity translates to a potential reduction of nearly 20,000 fossil fuel-powered motorbikes from the roads, assuming an average of two passengers per motorbike.
Switching to metro travel could reduce emissions by approximately 60 tons of CO2 per day, generating 60 carbon credits, based on the assumption that each motorbike travels 3 km and emits 3,000g of CO2.
Research conducted by Ho Chi Minh City University of Agriculture and Forestry indicates that afforestation initiatives linked to the carbon credit market within the Can Gio Mangrove Biosphere Reserve have received highly positive evaluations.
Currently, the total area of Can Gio mangrove forest is 75,700 hectares, of which the core area is over 4,700 hectares, the buffer zone is over 41,000 hectares and the transition zone is nearly 30,000 hectares. Can Gio forest is the place that absorbs carbon and reduces greenhouse gas emissions the most in Ho Chi Minh City, considered a ‘blue carbon sink’, the value of carbon credits is calculated to be 1.5-1.8 times higher than other types of forests.
Estimates suggest that the sale of carbon credits from Can Gio forest could generate approximately US$70 million annually. However, the absence of a complete legal framework for mangrove forest carbon credit trading currently prevents the realization of this potential.
With specific mechanisms and policies for Ho Chi Minh City's development, the city has prioritized rooftop solar power installations on public buildings and the replacement of street lighting systems from incandescent bulbs to LED lights as part of its carbon credit initiatives. However, both projects are still awaiting policy approval.
According to Deputy Head Nguyen Viet Truong An of the Investment Department at Ho Chi Minh City State Financial Investment Company—which is responsible for coordinating and implementing the carbon credit mechanism for rooftop solar power on public buildings and the transition from incandescent to LED street lighting—the biggest challenge is the novelty of carbon credit trading. Vietnam’s current regulations have yet to be fully updated, requiring specific guidance from relevant ministries and agencies before implementation can proceed.
Ms. To Thi Thuy Trang of the Ho Chi Minh City Institute for Development Studies highlighted that ongoing carbon credit creation projects in the city are impeded by a lack of clear legal frameworks for payment, assessment, and appraisal. This hinders market development and project implementation.
Additionally, she noted inconsistencies in public understanding of the carbon market and insufficient integration with international markets offering stable, high-value credit sales.
Moreover, she emphasized the critical role of the carbon market in reducing greenhouse gas emissions. She stated that establishing and operating an effective, transparent carbon market is essential and a significant responsibility that Ho Chi Minh City is committed to. This effort not only benefits the environment but also contributes to sustainable development and social equity.
Director Nguyen Hong Quan of the Institute for Circular Economic Development Research stated that the carbon market necessitates cooperation from multiple stakeholders.
At this stage, the role of the government is very important, the leader must be truly determined, must play the role of a leader in the game. Without determination and promotion of project implementation, the potential will remain potential, a huge waste.
According to the Ho Chi Minh City Institute for Development Studies, the agricultural sector has the potential to transition toward low-emission cultivation and production through circular agricultural practices and ecological farming. International organizations estimate that Vietnam’s agricultural sector could generate up to 57 million carbon credits annually—equivalent to reducing 57 million tons of CO2—potentially bringing in nearly $300 million per year.
