Towards a viable framework for carbon credit projects in agriculture in Vietnam

To provide a platform for knowledge sharing and discussion on carbon credits, the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) of Vietnam, with support from the International Rice Research Institute (IRRI), organized a hybrid event in Hanoi titled ‘Short-term operating procedure for engaging in carbon credit projects in the agriculture sector in Vietnam’.

In his opening message, Dr. Tran Cong Thang, director of IPSARD, and Dr. Bjoern Ole Sander, lead climate change scientist of IRRI, emphasized the goal of the workshop, sharing that it aims to “create opportunities where stakeholders could initiate discussion about developing the policy framework for carbon markets in agriculture for Vietnam.” 

They both stressed the high relevance of the topic in light of Vietnam’s recent commitments to reduce carbon emissions from all sectors, with agriculture contributing a significant part. They emphasized that there is increasing interest in carbon credit trading from all stakeholders, including the private sector and businesses. 

The workshop was attended, both online and offline, by almost 80 participants representing the key agencies under the Ministry of Agriculture and Rural Development (MARD), IRRI, and other international organizations, academic institutions, the private sector, and stakeholders.

Vietnam’s case

Dr. Katherine Nelson, a climate change scientist at IRRI, presented the situation of rice carbon abatement finance and limitations in the current legal framework for developing carbon trading mechanisms in Vietnam. She elaborated on the gaps in Vietnam’s current legal framework, to which IRRI can contribute to the development of the Measuring, Reporting, and Verification (MRV) system and project methodologies. 

Some of the issues she mentioned related to the alignment with the Paris Agreement, varying MRV requirements, the need for market governance rules, leadership on the development of project methodologies, procedures for audit and auditor requirements, lack of emissions registry for voluntary carbon markets, and regulations for credit issuance.

Dr. Tran Dai Nghia, director of the Department of Natural Resource and Environmental. Economics Studies of IPSARD, presented on the financial shortfalls for climate change mitigation, the financial need for climate change mitigation in Vietnam, and the operation mechanism of a carbon market/carbon credit project. He shared that in order to realize Vietnam’s target in the updated Nationally Determined Contributions (NDC), an estimated amount of USD 3 Billion and USD 30.8 Billion is required for unconditional and conditional targets, respectively.

In his presentation, Dr. Nguyen Hoang Nam, a professor at the National Economics University, discussed the roadmap for an emissions trading scheme (ETS) in Vietnam. He stressed that at present up to the year 2027, the government and stakeholders should work on: formulating regulations on carbon credit management and mechanisms for the carbon credit exchange platform; piloting the mechanism, and eventually, the carbon market; and conducting capacity building and awareness raising on carbon market development.

Possibilities for Vietnam

Representatives from different international organizations also shared their existing programs and mechanisms on the carbon market. Ms. Vicky Janssens, general manager for Southeast Asia of the Foundation for Climate Protection and Carbon Offset KliK, introduced the Klik Foundation, which works to compensate emissions from the Swiss transport sector in Switzerland by purchasing International Transferred Mitigation Outcomes (carbon credit equaling 1 tCO2e) in 11 countries under Article 6 of the Paris Agreement. She stressed that Vietnam is a potential partner but requires a regulatory framework.

Mr. Hugh Salway, head of markets of Gold Standard, talked about their ongoing work in Vietnam, particularly in the agriculture and energy sectors. He provided recommendations for developing the carbon market, such as considering models from other countries (i.e., Panama and Benin) and investing in the development of local market capacity.

Mr. Harm Haverkort, ACORN Partnership Lead Asia at Rabobank, briefed the participants about their scalable marketplace that measures and monitors carbon sequestration through remote sensing technology and an umbrella certification scheme. The scheme distributed 80% of revenue to smallholder farmers, 10% to RaboBank, and 10% to local partners for connection with farmers. He suggested several options to MARD, such as establishing a registration mechanism for carbon credits, signing a letter of no objection for projects to start (when policies are not yet in place), and developing incentive schemes for farmers to plant more trees.

In his presentation, Dr. Julian Gonzalo Jimenez, a senior carbon finance specialist at the World Bank, shared several opportunities for climate finance in Vietnam, including jurisdictional REDD+, Blue Carbon, low-carbon agriculture, sustainable cities, Just Transitions, and greening the financial sector. 

This is the first in a series of carbon credit workshops planned for building capacity and networks within Vietnam. The next workshop is a regional exchange on carbon market regulations for the agriculture sector including experts from Thailand, Vietnam, and the Philippines. This will be held on May 24 at the Agriconnect Conference in Bangkok, Thailand. 

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