Carbon credit is THE trend

Green SEA

POV: 

It’s the 2010s, carbon is good for trees and trees only.

It’s 2024: are you even trendy if you don’t talk about carbon credits?!

Welcome to the first-ever newsletter of Green SEA, which will be wholly dedicated to its motherland - Vietnam, and the hottest thing right now (besides global warming) - carbon credits. Starting from the next newsletter, we will broaden our gaze to cover Southeast Asia.

Ready to surf?

Overview of Vietnam’s carbon credit market:

• Compliant market (oversee by the government): not yet exist - but will be very soon. In 2025, Vietnam will implement a pilot domestic carbon credit exchange. By 2028, the country predicts to have enough technical capacity and knowledge to run an official carbon credit exchange that allows for trading regionally and internationally as well.

• Voluntary market (operated by the private sector): there’s currently only one exchange formed in September 2023 by a private company.

  Since mid-2000s, Vietnamese businesses have exchange carbon credits through international voluntary markets or programs such as the Clean Development Mechanism (CDM).

Be prepared to pay - Since COP26, there has been an increasing number of foreign investors eyeing afforestation projects in Vietnam. The government is drafting a pilot scheme whereas projects that sequestrate and capture carbon from marine and wetland ecosystems must pay a service fee. The scheme is expected to be published within 2024.

To date, the biggest carbon credit transaction in Vietnam worth $51.5 million, paid by World Bank for the country’s actions in reforestation and afforestation between 2018 and 2019.

But don’t forget, there are more than carbon credits - On 2 May 2024, the Prime Minister issued a dispatch urging ministries to fasten their research and submit proposals on carbon credit trading mechanisms in Vietnam. On the part of Ministry of Industry and Trade, they are requested to consider the possibility of trading and exchanging renewable energy certificates (RECs) and report to the Government in September this year.

With Vietnam’s energy mix set to be comprised of 44% of renewable energy, the RECs trading market - if enacted, would undoubtedly become an attractive playground.

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