The Vietnam’s forestry sector to gain from carbon credits; with capacity to sell 40 million carbon credits for a revenue of US$200 million annually
[HO CHI MINH CITY]: Vietnam, with its sprawling 14 million hectares of forest, stands on the brink of a significant economic opportunity through the carbon credit market, according to experts. During the Green Finance for Wood and Furniture Industry dialogue, a side event of the HawaExpo in Ho Chi Minh City from March 6 to 9, Phung Quoc Man, the deputy chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City, highlighted the global push towards achieving net-zero emissions. “Countries worldwide, including Vietnam, are striving for net-zero, making carbon emission reduction imperative across manufacturing sectors,” he noted.
RELEVANT SUSTAINABLE GOALS
The Vietnamese government has outlined a roadmap to nurture the carbon-credit market through to 2028, recognizing the unique position of the wood industry in this environmental endeavor. Unlike other sectors where emission reduction poses challenges, the wood industry, with its vast expanses of planted forests— the nurseries of carbon credits—sees a lucrative opportunity. “Efficiently harnessing these carbon credits could elevate the wood industry’s role in meeting net-zero targets while simultaneously boosting its economic viability through green finance,” Quoc Man added.
Associate Prof Nguyen Dinh Tho, director of the Institute of Strategy and Policy on Natural Resources and Environment, emphasized Vietnam’s standing as a leading wood and forestry producer. The nation’s commitment to sustainable forestry development, underpinned by green finance and carbon market initiatives, aims to mitigate climate impacts and tackle environmental issues. “Timber, a natural carbon sink, sets the wood industry apart as a net negative emitter of greenhouse gases, making it an ideal substitute for high-emission materials in construction,” he explained.
2023 has been marked as a landmark year for Vietnam’s forestry sector, with the country entering agreements to sell 10.3 million forest carbon credits—equivalent to offsetting 10.3 million tonnes of CO2—through the World Bank, netting US$51.5 million. The initial disbursement of US$41.2 million last year supported forest conservation efforts in six northern central provinces, ensuring fair compensation for forest guardians.
Nguyen Ngoc Tung, director of the VinaCarbon Climate Impact Fund, spotlighted the wood industry’s potential in generating carbon credits. “The longevity of trees directly correlates to the potential revenue from carbon credits,” he said. Other experts pointed out that meeting international standards for sustainable forest management not only reduces emissions but also enhances the industry’s global competitiveness and market access.
Vietnam currently houses 14.79 million ha of forest, a coverage rate of 42%. The forestry production value grows stably at a rate of 4.6% and revenue from environmental protection services nears VND11 trillion ($445.56 million). Vietnam’s forestry sector, therefore, is not just contributing to the global fight against climate change but is also navigating a path towards economic resilience and sustainability.
Lead image courtesy of Yarygin via Getty Images Pro
Never miss a story. Join us on social.