Practical application of carbon credits to the economy. Part II: Building infrastructure in the fight against climate change

DNHN - In the fight against climate change, the carbon credit system has become an important tool for measuring and reducing emissions. Therefore, infrastructure is necessary to ensure transparency in the trading of carbon credits.

Carbon credit infrastructure is an important tool

A strong and high-quality carbon credit infrastructure is essential for ensuring the transparency and reliability of the system. These infrastructures provide the tools and processes for recording, verifying, and tracking the carbon emissions that are reduced and eliminated. This ensures that the carbon credits generated and traded are accurate and have real value.

Thus, carbon credit infrastructure must have the capability to manage data and information related to carbon emissions. This includes collecting, storing, processing, and analyzing data from various sources. Effective data management helps ensure the accuracy and consistency of information, thereby enhancing the ability to assess and monitor carbon emission reduction progress.

A key element in carbon credit infrastructure is independent verification and review. Independent certification organizations are responsible for evaluating and verifying that carbon reduction projects meet established standards and regulations. This ensures fairness and reliability in the trading of carbon credits.

Carbon credit infrastructure provides support mechanisms for carbon reduction projects. This includes providing information, technical advice, and financial support to encourage and promote these projects. This support helps ensure that carbon reduction projects are effectively implemented and achieve the desired results.

Additionally, carbon credit infrastructure needs the ability to link with existing carbon credit markets. This facilitates flexible and efficient trading of carbon credits. Such links also open up opportunities for businesses and organizations to participate in the global market and leverage business opportunities related to carbon credits.

Moreover, carbon credit infrastructure should offer training and educational programs to raise awareness about climate change and the role of carbon credits. This helps create a knowledgeable and aware community about environmental issues, thereby encouraging active and innovative participation in reducing carbon emissions.

Vietnam has signed international commitments to reduce greenhouse gas emissions. The goal is to reduce greenhouse gas emissions by 27% by 2030 compared to the usual development scenario. Greenhouse gas inventory is an important activity to identify the amount of greenhouse gases emitted from various sources, providing a basis for proposing emission reduction solutions.

Mandatory greenhouse gas inventory for enterprises

According to Decision 01/2023/QD-TTg by the Prime Minister, 1,912 enterprise facilities are required to conduct greenhouse gas inventories. From 2024 onwards, businesses will conduct facility-level greenhouse gas inventories, prepare periodic biennial greenhouse gas inventory reports, and submit them to the provincial People's Committee for appraisal before sending them to the Ministry of Natural Resources and Environment.

There are specific legal documents by the Government regulating this, such as Decision 01/2022/QD-TTg on the list of sectors and facilities required to conduct greenhouse gas inventories, Decision 2626/QD-BTNMT on the publication of emission factors for inventory purposes, and Circular 17/2022-BTNMT on measurement, reporting, verification of greenhouse gas emission reductions, and waste management sector’s greenhouse gas inventory techniques.

Thus, facilities can proactively conduct greenhouse gas inventories with the support of these decisions and circulars. Specifically, the greenhouse gas inventory will be conducted in 2024 (completed before January 2025), and the greenhouse gas inventory report will be submitted in 2025 (completed before April 2025).

The greenhouse gases that need to be inventoried include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and hydrofluorocarbons (HFCs). Other greenhouse gases such as sulfur hexafluoride (SF6), perfluorocarbons (PFCs), and nitrogen trifluoride (NF3), depending on the specifics and conditions of each sector, should be considered for inventory.

Upon completing the greenhouse gas inventory, the results will provide a basis for determining the scope of greenhouse gas emissions per unit of product for business and production facilities. The allocation of greenhouse gas emission quotas at facilities will be carried out from 2026-2030 and in subsequent years.

According to statistics from the Ministry of Natural Resources and Environment, the total greenhouse gas emissions from Vietnam's production facilities in 2022 were 662.6 million tons of CO2 equivalent. Emissions from production facilities accounted for about 35%. Greenhouse gas emissions from the cement production sector accounted for about 10% of the total, while the steel production sector accounted for 8%, and the road transport sector accounted for about 25%.

With the rapid pace of urbanization and industrialization, Vietnam will need to expand bridge and infrastructure projects over the next 10 years. This will lead to increased greenhouse gas emissions due to the use of fossil fuels and intensified resource exploitation. According to estimates by the Ministry of Transport, from 2023-2030, Vietnam will need to invest approximately 1,200 trillion VND in bridge and infrastructure projects. Without solutions to reduce greenhouse gas emissions, the expansion of these projects could increase Vietnam's greenhouse gas emissions by about 20%.

Phan Nguyen An