Vietnam has officially approved the transfer of an additional one million tonnes of carbon credits to the International Bank for Reconstruction and Development (IBRD), part of the World Bank Group, according to the Vietnam Investment Review (VIR).
These credits stem from surplus carbon dioxide (CO2) emission reductions generated through plantation forests in the country’s north-central region.
The move comes under the Emission Reductions Payment Agreement (ERPA) signed in 2020 between Vietnam’s Ministry of Agriculture and Rural Development and the IBRD.
The original deal covered 10.3 million tonnes of CO2 reductions, but actual reductions in 2018–2019 surpassed this figure, resulting in a surplus of 5.9 million tonnes.
This latest transfer is based on payment terms set five years ago, with an estimated average price of $5 per tonne, so the additional credits could earn Vietnam around $5 million.
Relevant: Vietnam Approves Carbon Market Development Plan
Approximately 95% of the transferred credits will be returned to Vietnam to support its Nationally Determined Contributions (NDCs) under the Paris Agreement.
These funds will be distributed to forest owners, local authorities, and organizations managing natural forests across five provinces: Thanh Hoa, Nghe An, Ha Tinh, Quang Tri, and Thua Thien Hue.
Part of the funding will also support forest protection groups and community livelihood initiatives.
The IBRD had previously proposed purchasing one million tonnes from the surplus, prompting the ministry to submit a request to the prime minister in 2024.
The remaining 4.9 million tonnes following the latest transfer will be retained for Vietnam’s NDC commitments, as additional buyers are difficult to secure and carbon credit values tend to decline over time.
