The carbon credit market opens up many opportunities for businesses

VCN - Vietnam has great potential for carbon credit supply. Many businesses have proactively invested in technological innovation to participate in this market.
Invest early to catch opportunities from the carbon credit market Invest early to catch opportunities from the carbon credit market
The carbon credit market opens up many opportunities for businesses
Many businesses are interested in buying and selling carbon credits. Photo: Internet

Potential market...

According to experts, the world carbon credit market has been vibrant in the past few years. Dr. Nguyen Phuong Nam, UN greenhouse gas inventory assessment expert, said that Vietnam currently has about 1,912 establishments conducting greenhouse gas emissions inventories according to regulations. These are the customers who will participate in the carbon market in the near future. To date, many businesses are interested in buying and selling carbon credits.

As an enterprise with many factories in Vietnam, Nestlé Group said that it is committed to reducing emissions by 20% by 2025 and reducing emissions by 50% by 2030 so that by 2050 net emissions will be zero. In by 2023, this business has reduced emissions by 13.58% thanks to efforts to change production processes. According to Mr. Khuat Quang Hung, Director of External Relations and Communications of Nestlé Vietnam, the business is making efforts to reduce emissions across the supply chain, including the goal of using 100% renewable energy by 2025.

In Ho Chi Minh City, according to Resolution No. 98 on piloting a number of specific mechanisms and policies to develop Ho Chi Minh City, Vietnam's economic "leader" was selected as the first locality to pilot the carbon credit exchange mechanism. Mr. Nguyen Quang Thanh, Deputy General Director of Ho Chi Minh City State Financial Investment Company (HFIC), said that World Bank research shows that the market size of Ho Chi Minh City's products has a carbon credit value of about 790 million dollars.

Accordingly, Ho Chi Minh City will implement many projects with the potential to generate credits, such as upgrading street light systems to energy-saving LED lights, installing solar power systems for public properties and a number of private projects in the city, equipping some buildings with energy-saving devices.

Mr. Nguyen Toan Thang, Director of the Department of Natural Resources and Environment of Ho Chi Minh City, said that in the city, there are many businesses that have high greenhouse gas emissions and need to offset emissions. Therefore, the implementation of the carbon credit mechanism in Ho Chi Minh City opens up many opportunities, not only meeting the conditions of operating businesses but also being an advantage to attract new investment flows, in the context of investment, sustainable investing is becoming a global trend.

Mr. Nguyen Ngoc Hoa, Chairman of Ho Chi Minh City Business Association (HUBA) said that in recent times, Ho Chi Minh City has recorded many businesses that have proactively invested in waste and wastewater treatment; Use environmentally friendly materials and processes... for its production and business activities to meet export requirements.

Mr. Pham Van Viet, Vice Chairman of the Ho Chi Minh City Textile and Apparel - Embroidery Association, emphasized that reducing emissions in units exporting to demanding markets such as the EU and Japan is gradually becoming urgent. Therefore, many businesses have had to use machines that consume less electricity, convert boiler technology and install solar power on factory roofs to meet green criteria and reduce emissions.

...Waiting for mechanisms and policies

According to Mr. Dao Xuan Duc, Chairman of Ho Chi Minh City Industrial Park Enterprises Association, both foreign invested enterprises and Vietnamese enterprises participating in the global supply chain must make environmental commitments. Many businesses have installed and continue to have a need to install solar power on factory roofs in industrial parks. Therefore, Mr. Duc believes that it is necessary to soon promulgate a mechanism to help businesses reduce emissions and overcome "green barriers" in commodity export competition.

Although there are many opportunities, according to economic experts, there are still many challenges that need to be resolved in piloting the carbon credit exchange and offset mechanism. Specifically, the legal framework for calculating, evaluating, and appraising carbon credits is incomplete and there is no environment to widely trade carbon credits. In particular, most of the content in the process of creating, calculating prices and selling carbon credits depends on foreign organizations.

To effectively implement the pilot program to build a financial mechanism to reduce greenhouse gas emissions according to carbon credit exchange and offset mechanisms, guidance from the Ministry of Natural Resources and Environment; and the Ministry of Natural Resources and Environment is needed to handle the above problems and challenges. In addition, it is necessary to increase training and education for businesses, organizations and civil servants on the carbon credit market; strengthen cooperation with experienced countries and international countries to effectively deploy the carbon credit market.

Dr. Pham Van Dai, Senior Lecturer at Fulbright School of Public Policy and Management, said that carbon credits themselves need to be considered as a national resource, not an endless or renewable resource. In the context that major manufacturers in the world such as Apple and Samsung require suppliers to be carbon neutral in the production process, the tendency of Vietnamese businesses to buy carbon credits is inevitable. Therefore, in the long term, Vietnam needs to plan carbon credits as a resource that needs to be protected. In addition, it is necessary to consider forming a Carbon Credit Reserve Fund for Vietnamese businesses so that when participating in global certificates, businesses do not have to pay too high a price.

According to the draft Project "Developing the carbon market in Vietnam", the roadmap for developing the carbon market in Vietnam is in three stages. From 2025, a carbon credit exchange will be established and pilot operated.

The 2027 period will develop regulations and exchange regulations for operating the carbon credit exchange; piloting the carbon credit exchange and offsetting mechanism in potential areas and guiding the implementation of the domestic and international carbon credit exchange and offsetting mechanism, implementing capacity building activities, raising awareness about carbon market development.

In the period of 2028, the organization will operate an official exchange, regulating activities connecting and exchanging domestic carbon credits with regional and world carbon markets. The operation of the carbon credit exchange contributes to reducing greenhouse gas emissions in line with previous climate commitments, especially the goal of reducing net emissions to zero by 2050 according to the 26th climate change agreement. (COP26).

By Thu Diu/Bui Diep

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