Deputy Prime Minister Hồ Quốc Dũng presides over a meeting on Monday. VNA/VNS Photo

HÀ NỘI — Deputy Prime Minister Hồ Quốc Dũng presided over a meeting on Monday on the drafting of a decree on forest carbon sequestration and storage services and the Emission Reduction Purchase Agreement (ERPA) with Emergent.

Emergent is a US non-profit that serves as a transaction platform engaging between tropical forest countries and the private sector to mobilise finance to support emissions reductions from deforestation.

Delivering a report at the event, Director of the Forest Department under the Ministry of Agriculture and Environment (MAE), Trần Quang Bảo, said, as per the Government’s Resolution No 01/NQ-CP dated January 8, 2025 on key tasks and solutions for implementing the socio-economic development plan and State budget estimates for 2025, the ministry was assigned to formulate the decree.

According to Bảo, the draft has been developed to ensure consistency with related laws such as the Law on Forestry, the Law on Environmental Protection, regulations on greenhouse gas emission reduction, the carbon market, finance, budget and international treaties to which Việt Nam is a member.

The draft decree stipulates the subjects, forms of payment, payment levels and management and use of funds for forest carbon absorption and storage services, forest carbon projects, determination of greenhouse gas emission reduction results and forest carbon credits supplied.

Up to now, the MAE has submitted documents to the Government and the Prime Minister regarding adjustments to the draft decree, which focuses on decentralising administrative procedures for forest carbon credit issuance to local authorities in order to implement the Prime Minister’s directive on decentralisation, reduction and simplification of administrative procedures.

“The promulgation of the decree will help resolve existing shortcomings and obstacles whilst unlocking the potential of the forestry sector, develop sufficient legal frameworks to enable localities and forest owners to implement services,” said Bảo.

“This will promote the development of the forest carbon market, create new revenue streams and improve incomes for forest owners and local communities. At the same time, it will contribute to achieving Việt Nam’s greenhouse gas emission reduction targets (NDC) and international commitments.”

In the forestry sector, five forest environmental services (ecotourism, hydropower, clean water, aquaculture) already have clear regulations. Only the carbon storage service remains as the final piece to complete the legal framework, helping mobilise financial resources for people to participate in forest protection.

Mobilising international funds for deforestation reduction

Regarding the ERPA with Emergent, the then Ministry of Agriculture and Rural Development (now MAE) signed a Letter of Intent (LOI) with Emergent on November 31, 2022 at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26).

According to the LOI, Việt Nam is expected to transfer to Emergent 5.15 million forest carbon credits from the Central Highlands and South Central regions at a minimum price of US$10 per forest carbon credit for the period 2021–2025, through negotiation and signing of an ERPA. All of these credits will be retained to count towards Việt Nam’s Nationally Determined Contribution (NDC).

The benefits and impacts of negotiating, signing and implementing the ERPA include mobilising international financial resources to carry out emission reduction activities from forests, reducing greenhouse gas emissions by limiting deforestation and forest degradation, conserving and enhancing carbon stocks and sustainably managing forest resources (REDD+).

According to the MAE, Việt Nam has now completed the technical and institutional conditions to be ready to access result-based payments for REDD+ from the Green Climate Fund, the Forest Carbon Partnership Facility (FCPF) and the LEAF Coalition.

The ministry plans to organise negotiations, sign and implement the ERPA after receiving approval from the Prime Minister or once the forest carbon decree is issued.

Concluding the meeting, Deputy PM Dũng emphasised that the issuance of the decree is crucial and urgent in the current context to create a complete and unified legal framework for localities and forest owners to implement carbon sequestration and storage services.

“The decree clearly stipulates the mechanism for supplying, exchanging and transferring results of forest carbon emission reductions. Its scope is very broad, especially in promoting the forest carbon market, a market that we have not yet exploited,” said Dũng.

He noted that he basically agreed with the ministry’s proposal on decentralisation for localities in the draft decree to ensure consistency with the Prime Minister’s directive on promoting administrative procedure reduction, decentralisation and empowerment for localities.

For the implementation of ERPA, the Deputy PM made clear that the authority to negotiate and sign rests with the ministry, therefore it must take the lead in negotiations and signing, ensuring compliance with regulations and drawing on international experience.

Once the decree is issued, the MAE will be responsible for conducting negotiations on the ERPA with Emergent in June 2026. VNS