Challenges in implementing the pilot project on forestry carbon credit trading

Forests possess a considerable potential

Ministries, departments, and numerous Central and Central Highlands provinces and localities participated in a workshop on biodiversity and carbon reserves organized by Quang Nam's authorities.

The People's Committee of Quang Nam Province is hosting the National Year of Biodiversity symposium, with the theme "Living in Harmony with Nature." The objective is to disseminate information to stakeholders regarding the current status of biodiversity, forest resources, and the potential and progress of the pilot carbon project and forest restoration in Quang Nam.

According to the Department of Agriculture and Rural Development of Quang Nam Province, this region is home to one of Vietnam's greatest natural forest areas. Quang Nam is situated at the intersection of the Central Truong Son area's northern and southern vegetation systems. This region is home to various natural forests, including numerous unique ecosystems and rare and endemic species of flora and fauna.

The forests and biodiversity of Quang Nam are particularly significant in preserving the environment. They safeguard watersheds, prevent soil erosion, mitigate climate change, and improve communities' adaptability. Quang Nam also has the potential to implement measures that will reduce greenhouse gas emissions and increase carbon stocks from forests.

From 2005 to 2016, Quang Nam's forests emitted 4,233,930 tCO2e/year and absorbed 3,295,389 tCO2e/year. The average annual net emissions were 938,541 tCO2e/year. Between 2019 and 2030, the average annual net absorption is 686,856 tCO2e/year, with estimated annual emissions and absorption of 3,789,589 tCO2e/year and 4,476,445 tCO2e/year, respectively.

In spite of this, Mr. Tran Ut, the Deputy Director of the Department of Agriculture and Rural Development of Quang Nam Province, believes that in recent years, the pressure for timber, forest products, and production land has resulted in insufficient management efforts and a lack of investment resources for forest protection and development. Consequently, forestry activities have not generated the anticipated results.

In response to this circumstance, Quang Nam Province has implemented numerous specific policies and mechanisms in forest protection and development. The provincial objective is to enhance the value of forestry production by directing forestry planning and management solutions, protecting forest resources associated with mountain development, improving the living standards of individuals residing in and near forests, gradually socializing forest protection efforts, and utilizing a variety of resources from the central government, local authorities, socialization, and international organizations.

In 2020, the People's Committee of Quang Nam Province approved and issued an action plan to reduce greenhouse gas emissions by limiting deforestation, forest degradation, sustainable forest resource management, conservation, and enhancement of forest carbon stocks (REDD+) for 2020- 2030. This plan was implemented to mitigate the impacts of climate change and promote sustainable forest management.

The People's Committee subsequently researched and developed a pilot initiative for trading forest carbon credits. Nevertheless, despite successfully completing it and submitting it to the Ministry of Agriculture and Rural Development for evaluation, the project has not yet been approved due to technical limitations and legal issues. Consequently, Quang Nam Province has not yet sold any forest carbon credits.

Increasing the rate of engagement in the forest carbon market

According to Mr. Nguyen Tuan Anh, the Deputy Head of Forest Protection and Resource Conservation Management at the Quang Binh Provincial Forest Protection Department, the province had first proposed its involvement in the "Support for REDD+ Readiness Preparation in Vietnam" project, which was funded by the Forest Carbon Partnership Facility (FCPF) through the World Bank, in recognition of its potential and strengths in forest carbon credit trading.

Quang Binh is currently one of six provinces chosen to pilot the transfer of emission reduction results and administer financial payments for greenhouse gas emission reductions in the North Central region. Quang Binh will receive 80% of the ERPA funds allotted for natural forests for 2023-2025, equivalent to over VND 235 billion. VND 82 billion of this amount has been allocated for 2023 alone. The locality has already paid to forest proprietors, achieving 81% of the plan.

During the workshop, numerous participants also identified the current obstacles, challenges, and potential solutions for carbon trading in forestry. These include a detailed and ambiguous investment framework, carbon rights, benefit sharing, coordination mechanisms with ministries and localities, and registration and carbon credit trading regulations.

Furthermore, limitations exist in the technical capacity to construct and execute forest carbon initiatives, as well as in the transparency of data, the public disclosure of information, the measurement and reporting of emissions, the information on investments, and the connections between enterprises. Consequently, it is imperative to continue implementing emission reduction programs and conduct research on high-quality experimental carbon projects in the future. Additionally, providing comprehensive technical training and communication to localities is imperative.

Quang Nam Province's locality is currently finalizing the requisite documentation to continue petitioning the Government for approval to implement the province's pilot project or to participate in regional carbon projects, according to Mr. Ho Quang Buu, Vice Chairman of the People's Committee. This endeavor aims to achieve the Government's objective of establishing a carbon credit trading floor by 2025. The goal is to establish sustainable financial resources for the protection of forests and the improvement of the quality of extant natural forests, as well as to develop forests sustainably for the future.