Carbon credits key for forest management and protection

Trading of forestry carbon credits has become a good way for provinces to develop their forestry economy. This new economic activity also facilitates forest owners and people to increase their income, improve living conditions, and better protect and manage the forests.

Forestry carbon credits permit one enterprise, also known as an owner, to emit a certain amount of carbon dioxide or other greenhouse gases to the environment.

A carbon credit represents the right to emit greenhouse gases equivalent to one ton of carbon dioxide. A forest owner may translate the forest area he is managing into the amount of carbon dioxide and carbon credits, then sell the credits on the market through the greenhouse gas reduction mechanism.

In 2022, the Government issued Decree 107/2022/ND-CP on pilot transfer of emission reduction results and financial management of agreement on payment of greenhouse gas emission reduction in the North Central region. Subject to the decree, Quang Tri was among the selected six provinces.

The Ministry of Agriculture and Rural Development then transferred 10.2 million tons of carbon dioxide in the North Central region to the International Bank for Reconstruction and Development (IBRD). In exchange, the Vietnam Forest Protection and Development Fund received some US$51.5 million from the Carbon Finance Fund through IBRD and channeled nearly $50 million to the selected six provinces in the northern part of the central region as planned.

In late 2022, the Netherlands-Vietnam Medical Committee announced that five natural forests in Quang Tri Province, managed by local people of Huong Phung, Huong Son, Huong Linh and Huong Viet communes in Huong Hoa District, are classified as FSC-certified with total area of nearly 2,145 hectares, equivalent to an annual capacity of absorbing 7,000 tons of carbon dioxide and a total capacity of absorbing some 350,000 tons of carbon dioxide.

After receiving FSC certificates, forest rangers and local communities have enhanced their management and protection, using smart devices in data collection to meet regular assessment standards required by FSC.

Hard efforts have paid off, as Quang Tri and five other North Central provinces in 2023 received the payment for their capacity of carbon dioxide absorption and storage. In 2023-2025, Quang Tri Province expects to receive VND51 billion ($2.1 million). Until now, 80% of the payment has been made.

According to the provincial Department of Agriculture and Rural Development, Quang Tri will allocate VND17 billion ($700.4 million) out of a total of VND51 billion ($2.1 million) to finance forest plantation and protection and support residents in their forest management. For every area of natural forest, the province will pay the locals some VND120,000 ($4.94).

Practices have shown that forest management and protection have remained humble as the province needs more financial resources, which mostly come from harvesting forestry products and woods as well as environmental services. Until now, more than 100 local communities and nearly 1,000 families have been assigned to take care of some 20,000 hectares of natural forest.

The accessibility to carbon credits will significantly increase financial resources for owners, communities, and people to better protect and develop the forests and improve their living conditions.

For example, in Chenh Venh Village of Huong Phung Commune, for every 800 hectares of natural forest, residents will receive some VND90 million ($3,700) - an essential financial fund that encourages and motivates people to partake in forest management and perform their work more professionally.

Quang Tri is now home to some 23,400 hectares of FSC-certified forest, of which some 17,000 hectares are managed by forestry companies such as Ben Hai, Trieu Hai, and Duong 9 (Route 9), and the rest are monitored by local individuals and families. The province plans to have an additional 7,900 hectares of large-timber forest certified in 2025 and a maximum of 90% of all large-timber forests certified.

Despite the profits and benefits brought by carbon credit trading, there has been a shortage of policies on statistical calculation and monitoring of local forests. Therefore, forestry carbon credits have not been officially recorded in annual reports of the forestry sector.

Until the official introduction of carbon credit regulations, Quang Tri and other provinces must adopt proactive measures to develop their piloting policies on carbon credit trading. They should enable more local individuals, families and communities to penetrate into the forestry carbon credit market to boost the trading of carbon credits and improve the living conditions of the locals, especially those whose lives rely on the forests.

On the other hand, the province needs to preserve, restore and cultivate the lost areas to increase the total capacity of carbon dioxide absorption, improve the quality of forest plantation, management and protection, and adopt sustainable ways to boost the local forestry sector.

Furthermore, local authorities must communicate with enterprises and forest owners to raise their awareness about the carbon credit market, motivate them to study and partake in the forestry carbon credit trading market and develop a new carbon credit trading model involving local enterprises.

Bao Binh – Huy Anh