A wind power farm in Bạc Liêu Province. — VNA/VNS Photo Nhật Bình

HÀ NỘI — It is critical to improve the awareness of enterprises about the carbon market, together with the provision of supports to encourage their market participation, experts said at the conference on opportunities and challenges hosted by Công Thương (Industry and Trade) newspaper on Wednesday in Hà Nội.

Hoàng Văn Tâm from the ministry’s Energy Efficiency and Sustainable Development Department said that the carbon market has been operating in the region for around a decade but remains new to Việt Nam. The carbon market is intangible but valuable in terms of investment and business opportunities.

However, if Vietnamese enterprises are not well prepared, the carbon market will pose many challenges, he said.

Green production and emission reduction are unavoidable trends in the context that countries around the world are introducing stringent standards on imported products such as the EU’s Carbon Border Adjustment Mechanism (CBAM).

However, Vietnamese enterprises are seemingly not well-prepared for the carbon market yet, Đặng Hồng Hạnh, managing director of Energy and Environment Consulting Joint Stock Company, said.

She cited statistics that showed 53.16 per cent of companies may have heard about an emissions trading system (ETS) and carbon market, but do not understand the basic operating principles. More than 26 per cent understand the basics, but cannot differentiate ETS from carbon market. Only 1.27 per cent thoroughly understand ETS and the operation of carbon market, their differences as well as their interactions on the carbon exchange.

According to Vũ Mạnh Thắng, from the energy board of green energy provider Trường Thành Việt Nam Corporation, companies are still facing a number of difficulties in implementing carbon market-related issues such as legal framework, finance, technology and shortage of talent, market information access, and market and business risks.

Thắng said that the focus would be on improving the legal framework and policies through simplifying administrative procedures and enhancing transparency.

It is also necessary to develop financial support mechanisms such as environmental funds and investment funds of international organisations.

Enterprises should invest in technologies for clean production and apply efficient energy management, he added. The development of human resources and promoting international cooperation are also important.

According to Tâm, the energy and industry sector aims to reduce by at least 8.2 per cent of greenhouse gas emissions compared to the business as usual (BAU) scenario by 2025, equivalent to 36.2 million tonnes CO2. If there is international support, the sector aims to reduce at least 36.4 per cent of greenhouse gas emissions.

Under the draft project on the foundation and development of the carbon market in Việt Nam, the market will be piloted in 2025-28 period, with carbon credits not being sold abroad. The carbon market is expected to officially go operational in Việt Nam from 2029.

The carbon market originated from the United Nations Kyoto Protocol on Climate Change 1997 which established a system for trading emissions among countries, leading to the creation of carbon markets.

According to the Carbon Market Institute, there are about 73 carbon schemes, both voluntary and mandatory, worldwide, which altogether cover about 23 per cent of total global greenhouse gas emissions. — VNS