Directive 13/CT-TTg 2024 enhancing the management of carbon credits to implement Nationally Determined Contributions

DIRECTIVE

 On intensifying the management of carbon credits to implement the Nationally Determined Contribution^[1]

To implement its commitment to attain net-zero emissions by 2050, which was made at the 26^th United Nations Climate Change Conference of the Parties (COP26), Vietnam has updated its Nationally Determined Contribution (NDC) and realized international commitments to emissions reduction. In order to implement the UN Framework Convention on Climate Change and Paris Agreement on Climate Change, it is the responsibility of the Parties to implement their NDCs, including the objective of reducing greenhouse gas (GHG) emissions in the sectors of energy, agriculture, land use and forestry, waste management, and industrial processes. To ensure the implementation of the commitment to cutting GHG emissions by 2030 according to the NDC and achieving net-zero emissions by 2050, it is extremely urgent to formulate and implement a plan on reduction of GHG emissions in various sectors; develop a carbon market; and adopt mechanisms for carbon credit management.

The development of a carbon market and adoption of mechanisms for management, exchange and offsetting of carbon credit are an important solution for achieving the GHG emissions reduction target at a reasonable cost, promoting the development and application of low-emission technologies, thus contributing to raising the competitiveness of enterprises and income of people participating in GHG emissions reduction and forest protection and development projects. In Vietnam, since the mid-2000s, many enterprises have implemented carbon credit-creating programs and projects and exchanged carbon credits on the global carbon voluntary market, particularly carbon credits from programs and projects under the Clean Development Mechanism (CDM). However, over the recent years, there have appeared incomplete, incomprehensive and inaccurate information and public opinions about the carbon market and carbon credit management mechanisms, especially the creation and management of carbon credits from forests and in a number of other sectors. Not a few organizations, enterprises and people still fail to have proper understanding about the carbon market and the methods of creating carbon credits for trading on the market.

Carbon credit management covers formulation and implementation of regulations on mechanisms for managing the creation of carbon credits and exchange, and trading of carbon credits on a voluntary basis or offsetting of carbon credits against GHG emission allowances, which serve as foundations for the development of the domestic carbon market and participation in the global market. The exchange and trading of carbon credits and GHG emissions reduction results must ensure the achievement of the national GHG emissions reduction target and the harmony of interests of the State, the people, and participating enterprises and partners.

To enhance the management of carbon credits so as to promote the development of the carbon market, ensure the implementation of the NDC and the harmony of interests of the State, enterprises, people and partners, and concurrently provide accurate and adequate information on the carbon market and methods of creating carbon credits for trading on the market, the Prime Minister requests:

1. The Ministries of Industry and Trade; Transport; Construction; Agriculture and Rural Development; and Natural Resources and Environment:

a/ In the third quarter of 2024, to urgently promulgate sectoral GHG emissions reduction plans according to Appendix IV to the Government’s Decree No. 06/2022/ND-CP and organize the implementation of such plans to ensure the achievement of committed targets in the NDC;

b/ To assume the prime responsibility for, and coordinate with related agencies in, providing consultations for competent authorities to decide on the negotiation, conclusion and implementation of agreements or contracts with international partners on transfer of carbon credits and GHG emissions reduction results in the sectors under their management, ensuring the achievement of the emissions reduction target according to the NDC; to assess the level of carbon market readiness of a number of sectors;

c/ To assume the prime responsibility for, and coordinate with the Ministry of Information and Communications, news and press agencies in, carrying out in-depth and wide dissemination about GHG emissions reduction targets, implementation of the NDC, methods of creating carbon credits, participation in voluntary carbon markets, and organization and development of compliance carbon markets.

2. The Ministry of Natural Resources and Environment:

a/ To promptly study the establishment of a national registration system for carbon credits; manage programs, projects and activities to reduce GHG emissions and create carbon credits for pilot implementation and development of the domestic carbon market and international exchange.

b/ To assume the prime responsibility for, and coordinate with related ministries and agencies in, promptly formulating a decree amending and supplementing a number of articles of Decree No. 06/2022/ND-CP, including provisions on carbon credit management, domestic and international carbon credit exchange, for submission to the Government before July 30, 2024.

3. The Ministry of Agriculture and Rural Development:

a/ To assume the prime responsibility for, and coordinate with the Ministry of Natural Resources and Environment, related agencies and localities where forests exist in, promptly building national, regional and local databases on the current status of, and evaluation of the potential for, emissions reduction and forest carbon sequestration through 2030, with forecasts for 2050 taken into consideration;

b/ To assume the prime responsibility for, and coordinate with the Ministry of Natural Resources and Environment, related agencies and localities where forests exist in, determining the potential for emissions reduction and forest carbon sequestration to be accounted to the NDC for use as a basis for forest carbon credit exchanges with international partners; to complete such task before October 31, 2024; to formulate the national standard on forest carbon credits and detailed regulations on measurement, reporting and appraisal of the volume of forest carbon sequestration; to formulate pilot policies and mechanisms for result-based payment for carbon credits in high-quality, low-emissions rice cultivation areas.

4. The Ministry of Industry and Trade: To assume the prime responsibility for, and coordinate with related agencies in, reviewing legal foundations, domestic reality and international experiences on management, trading and exchange of renewable energy certificates in association with implementation of the national emissions reduction target, to propose management regulations (if any) and report thereon to the Prime Minister before September 30, 2024.

5. The Ministry of Finance: To assume the prime responsibility for, and closely coordinate with the Ministry of Natural Resources and Environment and other related ministries and agencies in, completing and submitting a scheme on development of Vietnam’s carbon market to competent authorities for approval, ensuring the achievement of the set objectives on pilot and official organization and operation of the market; to study and evaluate regional and international experiences in building, management, operation and development of the carbon market.

6. The Ministry of Information and Communications: To coordinate with related ministries in directing news and press agencies, radio and television stations at central and local levels to formulate and implement communications programs on implementation of the national GHG reduction target, the NDC, methods for creating carbon credits, participation in the voluntary carbon market, and organization and development of the compliance carbon market.

7. Provincial-level People’s Committees:

a/ To coordinate with related ministries and sectors in organizing the implementation of the national GHG emissions reduction target according to the NDC; to review and assess the current status of activities and measures to reduce GHG emissions in their localities to evaluate the potential for carbon credit creation and exchange.

b/ To coordinate with the Ministry of Natural Resources and Environment and related ministries and sectors in reviewing and requesting organizations and enterprises that implement programs and projects under the carbon credit exchange and offsetting mechanism in their localities to provide information about these programs and projects and the number of created and exchanged carbon credits and send such information to the Ministry of Natural Resources and Environment for summarization under regulations;

c/ To coordinate with the Ministry of Information and Communications and related agencies in implementing programs on communication about responsibilities to implement the national GHG emissions reduction target according to the NDC, methods of creating carbon credits, participation in the voluntary carbon market, and organization and development of the compliance carbon market.

8. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees shall organize the implementation of, and direct agencies, organizations and units under their management to strictly implement, this Directive.

The Government Office shall, based on its assigned functions and tasks, monitor and urge the implementation of this Directive.-

Prime Minister
PHAM MINH CHINH