Project developers in Vietnam were encouraged to carefully move toward the carbon marketplace and focus on creating assets by reducing gas emissions in preparation for the carbon credit exchange in the Southeast Asian nation, heard a panel discussion attended by foreign specialists on Wednesday.

Speaking at the panel discussion, part of the Business Partnerships Platform (BPP) Climate Investment Networking Day hosted by the Australian government in Ho Chi Minh City, Matt Spannagle, chair of the technical advisory committee at Gold Standard, stated, “What I would say as advice to project developers is that if you undertake actions that can demonstrate the reduction in gas emissions, quantify that, and monitor that, you will create an asset.”

“The asset is an emission reduction,” he said. “Don't ignore that asset.”

Despite uncertainty about the investment in carbon credits, Spannagle pushed firms to follow the path as it is creating an asset.

“To quantify that asset and keep their qualifications and data in place, I think the asset will serve them well in the medium term as a business,” he underscored.

He also advised that emission reduction is an asset that should be done digitally.

Echoing the view, Dr. Katie Nelson, a climate change specialist at the International Rice Research Institute (IRRI), also agreed that it is vital to digitize farm management by forming virtual cooperatives to pay off in the carbon marketplace. 

Discussing a plan in which Vietnam will put into official operation the carbon credit exchange from 2028, Spannagle stated that “2028 is a long time away, but getting it right and getting it done properly is more important than getting it done quickly.”

Due to much interest in carbon markets, even in regulated markets, as well as voluntary markets, there are multiple opportunities to tap the carbon marketplace, he said.

At the discussion titled ‘Accelerating Investment in Carbon Markets in Vietnam,’ Win Sim Tan, East and Southeast Asia regional representative of Verra, hinted at considering investments in various carbon markets.

“If project developers are just looking at one particular market, they should diversify and consider several different parts at the same time," he said.

“They should not put all their eggs in one basket.

“They should also preserve a portion of carbon credits for the domestic rule pricing, if the carbon credit can be used in the domestic compliance scheme or otherwise, Article Six."

Article Six of the Paris Agreement, which covers the role of carbon markets, enables parties to cooperate in reducing greenhouse gas emissions.

He advised the project developers to look at markets where there is greater certainty with price reference and weigh on insurance products for potential risk management.

Benefits from carbon credit exchange

Apart from producing incomes for participants, the carbon market and carbon credit-driven programs will help promote the sustainability of the agricultural and economic industries, heard the panel discussion.

Farmers will gradually shift to better and more sustainable farming methods aimed at increasing soil quality and reducing chemical use.

Particularly, a huge volume of carbon dioxide will be cut, which helps improve public health and contribute to protecting the environment.

Vietnam is working to develop its carbon market

The Vietnamese government is offering various incentives to green projects in a bid to speed up its establishment of a carbon market, said To Nguyen Cam Anh, deputy director general of the Legal Department under the Ministry of Finance.

Afforestation and clean energy projects are entitled to preferential taxes, while firms joining the carbon credit exchange will not be subject to corporate income taxes.

In addition, the government is creating favorable conditions for green projects to get access to multiple credit sources.

Vietnam is in the process of building regulations for a carbon market to make life easier for firms implementing green projects to generate revenue and to control the volume of emissions.

The establishment of the Vietnamese carbon market is expected to fuel the nation’s commitment to a net-zero emissions target by 2050.

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