With Resolution 98/2023, the National Assembly has allowed Ho Chi Minh City to pilot a financial mechanism to implement measures to reduce greenhouse gas emissions according to carbon credit trade and offset mechanisms. The above pilot is the first step to commercializing carbon credits in Vietnam.
Significant opportunities from the carbon credit market
For many years, Ho Chi Minh City has been the driving force behind Vietnam's economic growth. Rapid industrialization also increases greenhouse gas emissions. The city is also facing many environmental and climate change problems.
Recognizing the problem, in recent times, the city has proactively implemented non-structural and structural solutions to cope with climate change. It is currently only at the beginning stage. However, proactively implementing non-structural and structural solutions for climate change, including exchanging and offsetting carbon credits, is a good sign.
After the Resolution of the National Assembly, businesses and some local governments in Ho Chi Minh City initially recognized issues related to carbon credits.
According to the Government's roadmap, the period 2021-2027 is the preparation phase, developing operating regulations and establishing a carbon credit exchange, piloting carbon exchange and offset mechanisms. From 2028 onwards, the carbon trading floor in Vietnam will officially come into operation.
A Ho Chi Minh City Department of Finance representative said that while waiting to develop the domestic carbon market with measurement, inspection, and credit confirmation standards according to regulations, the city has proposed proactively approaching the international market to gain more practical experience through carbon credit trading.
Accordingly, in terms of order and procedures, the city is expected to cooperate with several experts from international organizations to support the city in participating in the global carbon credit market. On that basis, the city will sell carbon credits to the buyer so that they can offset the emissions committed to being eliminated according to regulations.
Regarding this issue, the Department of Natural Resources and Environment and the Department of Finance of Ho Chi Minh City met to discuss the above plan, focusing on contents such as selecting programs and projects; coordinating with credit-issuing organizations to create emission reduction certificates; carbon credit trading methods; Procedures for selecting investors to buy carbon credits...
Complete the mechanism and policy
The concretization of the National Assembly's Resolution shows that Ho Chi Minh City is ready to go on the path to commercializing carbon credits. However, according to experts, to develop the carbon market in Vietnam in general and Ho Chi Minh City in particular, it is necessary to complete the legal basis for exchanging greenhouse gas emission quotas, carbon credits, and trade and offset credits mechanisms. Determine total emission quotas and allocate them to sectors and businesses. At the same time, identify potential fields and projects.
In addition, Vietnam will train staff, improve management capacity, and organize and operate the carbon market. Raise awareness of businesses, organizations, and individuals to meet their readiness to participate in the carbon market.
At the same time, it is necessary to build a trading floor for carbon credits and quotas along with organizational and operational regulations so that the domestic market can officially operate and connect with regional and world markets. In the immediate future, we will soon deploy a pilot for the carbon credit trading floor.
Up to now, the Ministry of Natural Resources and Environment has been closely coordinating with the Ministry of Finance and relevant agencies to develop a market development project and is developing regulations on carbon credit management: Regulations on auction, transfer, borrowing, payment, and recovery of greenhouse gas emission quotas; Use carbon credits to offset greenhouse gas emissions; Financial management mechanism for carbon market operations.
One of the critical tasks is to establish a national registration system to manage all carbon credits and connect with standard systems and organizations in the world, such as gold standards... Organizations and individuals will register an account, and provide relevant information about the type and amount of carbon credits they own and other necessary information to participate in the market.