Carbon market to spring into life

Vietnam offers some prime forests to take part in carbon credit schemes

The project, Reduced Emission from Deforestation and Forest Degradation - the first of its kind in Vietnam, is being implemented by locally-owned Vietnam Carbon Exchange Company and its foreign partners in 32,000 hectares of natural forest of Tam Dao National Park in Vinh Phuc province.

“The project will benefit nearly 200,000 local inhabitants whose lives depend on the park’s forest and help protect thousands of animal and plant species in the park,” said the park’s director Do Dinh Tien.

“Under the 30-year long project, the forest will be able to absorb 50,000-60,000 tonnes of biomass and create 40,000-50,000 tonnes of carbon credits each year. In total, the forest will be able to absorb 1.2-1.5 million tonnes carbon dioxide and its equivalence within 30 years,” said Phan Minh Sang, the project’s technical chief.

Unlike some other forestation projects in Vietnam that engage in planting forests, the Vietnam Carbon Exchange’s project is involved in conservation and bio-diversity of the natural forests, whose carbon credit development is quite moderate.

A Vietnam Carbon Exchange representative told VIR that the company invested in protecting the forests and its product was commercial carbon credits, which would be certified by international agencies and be sold to other interested companies.

“Carbon forest projects are quite new in Vietnam. We want to grab this opportunity,” the company’s representative said. The project also involves Australian-backed Voluntary Credit Company, which is now working on some similar projects in Indonesia and Papua New Guinea.

“We began to cooperate with this project in July last year. Environmentally friendly business is forming a crucial factor in the business strategies of many companies in the world, including in Australia,” said Bruce Rowntree, director of Voluntary Credit Company.

Rowntree said the project would make the environment greener, while helping attract more foreign companies to Vietnam. According to the Ministry of Agriculture and Rural Development, Vietnam’s forests are ideal for carbon forest projects.

Many enterprises in Vietnam have smelt opportunities in selling carbon credits through forest plantation projects.

Recently, German-backed Forest Finance Group revealed that it was cooperating with state-owned Dak To Services, Agro-Forestry Investment and Development Company for a carbon-absorbing forest plantation project, to cover 1,250ha within 50 years in the central Kon Tum province.

The trading value of the world’s carbon credit market began to surge from nearly $11 billion in 2005 to $126 billion in 2008. This has indicated that more and more investors and enterprises were showing their interests in this market.

“For example, in Australia, many companies forced to reduce their emissions have bought carbon credits, which are the green passport for them to do business with their partners,” Rowntree said.