Vietnam – Australia share experience in building carbon credit trading platform

Dialogue Scene.

At the dialogue, the representative of the Australian Treasury shared the future production strategy, the vision of becoming a renewable energy superpower. In particular, the Australian side also shared with the Vietnamese side information related to the carbon licensing system, carbon market and industrial decarbonization mechanism.

Specifically, including: policy and financial mechanisms for carbon market development, building a carbon trading floor; experience in researching tax policies related to carbon markets, Australia's policy response to carbon tax policies of other countries.

Ms. Katriana Di Macro, Deputy Director of the Department of International Economics and Security (Australian Treasury) said that in order to develop green finance, the Australian Government has decided to invest 22.7 billion dollars in the next decade to maximize the economic and industrial benefits of the transition to net zero emissions.

Along with that, the country has also set out strategic goals for future production.

To implement these programs, Australia has conducted an assessment of priority investment sectors. Accordingly, the Australian Manufacturing Future Bill has established a national interest framework to guide the Government in reviewing and evaluating public investment, and allows the use of the national interest framework to evaluate sectors.

This law allows the Minister of the Treasury to direct the Treasury to conduct an independent assessment of a designated sector or industry of the economy.

The Treasury will conduct an evidence-based assessment and consultation process, including cooperation with other government departments to address two guiding questions.

Regarding incentive policies for green growth, a representative of the Australian Treasury shared that the country implements two main incentive policy groups: tax incentives for hydrogen production and tax incentives for critical mineral production.

Accordingly, for every kilogram of renewable hydrogen produced, a $2 incentive will be granted. Along with that, a refundable tax offset will be provided. This incentive lasts for up to 10 years per project.

Meanwhile, the critical mineral production tax incentive is available for 31 minerals with a incentive period of up to 10 years per project.

To implement the green finance strategy, Australia has also built a carbon credit trading platform through the Government-run online registration portal. Australia's carbon credit units are ACCUs.

Carbon licensing was established under the Carbon Credits (Carbon Farming Initiative) Act 2011, to remove or avoid carbon.

Carbon credits are generated by industry, and will be sold to the Government or private buyers.

The Clean Energy Authority is the unit that issues carbon permits.

At the dialogue, the representative of the Ministry of Finance also informed about the Action Plan of the Ministry of Finance of Vietnam to implement the National Strategy on Green Growth.

Accordingly, the representative of the Institute of Strategy and Financial Policy said that Vietnam has set a general goal of green growth contributing to promoting economic restructuring associated with growth model innovation to achieve economic prosperity, environmental sustainability and social equity.

Vietnam is also aiming for a green, carbon-neutral economy and contributing to the goal of limiting global temperature rise.

To achieve green growth goals, the Ministry of Finance is assigned by the Government to develop and promulgate a ministerial-level action plan; develop standards and criteria for green classification by industry and financial sector.

In addition, review, amend and supplement policies on management and use of state budget expenditures to promote green growth; develop and perfect preferential financial policy tools, programs and solutions to promote the capital market and green insurance.

Vietnam will also use tax and fee tools to regulate unreasonable consumption behaviors that are harmful to health, culture and the environment.

At the same time, establish a carbon market towards synchronous development of the mechanism for exchanging emission rights according to the market mechanism, etc.

Regarding legal regulations and orientations for developing the carbon market, the representative of Vietnam said that the draft project to establish a carbon market is being developed by the Ministry of Finance in coordination with relevant ministries and branches.

The Ministry of Finance has also developed and perfected preferential financial policy tools, programs and solutions to promote the capital market and green insurance; using tax and fee tools to regulate unreasonable consumption behaviors that are harmful to health, culture and the environment.