Vietnam Earns US$51.5 Million From First Forest Carbon Credit Sale

2023 marked a significant milestone for the forestry sector in Vietnam as the Southeast Asian nation successfully sold 10.3 million forest carbon credits (10.3 million tonnes of CO2) for the first time through the World Bank (WB) for US$51.5 million.

The sale was part of the Emission Reductions Payment Agreements (ERPA) in the north central region signed on October 22, 2020 between the International Bank for Reconstruction and Development (IBRD) of the WB and the Ministry of Agriculture and Rural Development (MARD), according to a report from the Vietnam News Agency.

In early August 2023, the WB paid the first ERPA instalment of US$41.2 million to the Vietnamese ministry, or 80% of the contract. The remaining US$10.3 million will be paid after the transfer of 10.3 million tonnes of CO2 is completed.

The Vietnam Forest Protection and Development Fund has received and disbursed all the first payment so that six north central provinces can urgently make payment plans for forest owners.

In addition to the number of credits sold, the WB has confirmed the emission reduction results of the entire north central region in the first period (January 1, 2018 – December 31, 2019), reaching 16.21 million tonnes of CO2 (equivalent to 16.21 million credits).

According to the Vietnam Administration of Forestry, the country planted about 250,000 hectares of forest last year, surpassing the yearly plan by 2%. The forest coverage rate was 42.02%, matching the target. Total revenue from all forest environment services reached more than US$169 million.