Practical applications of carbon credits in the economy. Part XV: How are businesses interested in carbon credits?

DNHN - Carbon credits have become a global issue. Currently, Vietnamese businesses are increasingly aware of their role, not only to reduce environmental impact but also to enhance brand image and meet international market demands.

Vietnamese businesses' awareness of carbon credits

Nowadays, the Vietnamese business community is becoming increasingly aware of the importance of carbon credits in the context of growing climate change. They do not just view carbon credits as a tool to mitigate environmental impact but also see them as an opportunity to enhance brand image and expand opportunities in international markets. This interest reflects the global trend towards sustainable development and corporate social responsibility.

Carbon credits are a measurement unit that allows organizations and individuals to assess the amount of CO2 they emit into the atmosphere. Each credit usually corresponds to one ton of CO2. Businesses can buy and sell carbon credits to balance their emissions, thus achieving net-zero emissions targets.

Globally, many countries have established carbon credit trading mechanisms to reduce emissions. The European Union, Japan, and several other countries have implemented carbon credit systems, requiring businesses to obtain emission permits and fulfill obligations to reduce emissions. Vietnam, with its international commitments to environmental protection, is also following this trend.

More and more Vietnamese businesses, from large corporations to small and medium enterprises, are beginning to pay attention to carbon credits. They recognize that participating in the carbon credit market is not just a social responsibility but also a new business opportunity.

Many businesses have invested in green technologies and cleaner production to reduce emissions. For instance, some factories have adopted energy-saving production processes and used renewable energy sources such as solar and wind. This not only helps reduce emissions but also creates environmentally friendly products, attracting customers.

Large companies like Vinamilk, Masan, and TC Group have participated in carbon credit programs. They collaborate with international organizations to implement forest protection projects, develop renewable energy, and raise community awareness about environmental protection. These efforts not only help reduce emissions but also contribute to the sustainable development of businesses.

For example, TC Group has established the ASEAN Carbon Credit Exchange Joint Stock Company. This company focuses on investing in projects related to climate change and maximizing the potential of the carbon credit market in Vietnam.

In an exchange with Doanhnghiephoinhap.vn, Mr. Nguyễn Võ Trường An, General Director of ASEAN Carbon Credit Exchange Joint Stock Company (part of TC Group), said that the carbon credit market in Vietnam is still very new and has not yet been fully recognized by many people and businesses. Over the past two years, information about carbon credits has started to attract more attention. Since 2018, some of the first carbon credit projects in Vietnam have been registered with international validation organizations such as Vera and Wortender. However, at that time, the carbon credit mechanism was not well known and almost no domestic companies were able to access it.

According to Mr. Trường An, foreign investment funds have begun to cooperate with companies with projects capable of generating carbon credits, particularly in renewable energy fields such as wind and solar power. These funds typically invest capital to register carbon credit projects and then hold the trading rights for the credits from these projects, paying a fee to the project owners. Currently, the number of such projects is still limited and primarily belongs to foreign investment funds.

"Therefore, ASEAN Carbon Credit Exchange Joint Stock Company (CCTPA) has launched a carbon credit exchange with the aim of developing a voluntary, transparent carbon credit market and connecting with international exchanges, to increase liquidity for carbon credits in Vietnam. However, with the current number of credits, the trading volume still does not meet the demand. In the initial stage, CCTPA focuses on advising and supporting organizations, entities, and individuals to register carbon credit projects on the international market," shared the General Director of ASEAN Carbon Credit Exchange Joint Stock Company.

He mentioned that customers are increasingly inclined to choose products from brands that are environmentally responsible. Therefore, owning carbon credits not only brings environmental benefits but also creates a competitive advantage for businesses. Companies that can demonstrate that they have implemented environmental protection measures are likely to attract more customers.

Challenges and opportunities for businesses participating in the carbon credit market

Despite the opportunities opened by the carbon credit market, Vietnamese businesses also face several challenges. One major issue is the lack of information and knowledge about carbon credits; many businesses do not fully understand the operational mechanisms and related regulations. The infrastructure system and supportive policies from Vietnam are still unclear, making businesses hesitant to invest in carbon credit projects.

Investing in green technology and developing carbon credit projects requires significant costs, which can be challenging for small and medium enterprises to raise capital. Financial risks are also a factor to consider.

In the future, as awareness of climate change increases, carbon credits will become an important part of the sustainable development strategy of Vietnamese businesses. The government and related organizations need to have practical support policies, including organizing training and providing complete information to make businesses more confident. A transparent and clear legal framework also needs to be established to minimize risks and encourage investment in green technology. This transformation is not only crucial for the development of businesses but also for the community and future generations.

Related to this issue, Mr. Phan Hoàng Nam, General Director of Future Carbon Credit Trading Co., Ltd., stated that participating in the carbon credit market brings significant benefits to businesses. Firstly, companies can reduce compliance costs by using carbon credits to offset emissions exceeding regulatory limits instead of investing in internal emission reduction technology. Secondly, participating in the carbon credit market not only enhances the company's reputation but also demonstrates a commitment to the environment and sustainable development.

According to Mr. Nam, this market encourages investment in green technology and emission reduction projects, thereby improving environmental efficiency and competitiveness. Businesses can also generate revenue from selling carbon credits and expand international cooperation opportunities, building valuable partnerships. These benefits help businesses not only improve sustainable operations but also capitalize on new business opportunities.

Assessing the challenges for the carbon credit market in Vietnam, Mr. Nguyễn Võ Trường An, General Director of CCTPA, confirmed that the carbon credit market in Vietnam currently faces four main challenges. First is the issue of legal mechanisms. Although carbon credits have been mentioned in the 2020 Environmental Law and related decrees and circulars, current regulations are not clear enough to guide the creation and trading of carbon credits domestically and internationally, causing apprehension among businesses and projects.

Second is the challenge of human resources. Implementing carbon credit projects requires a team of skilled experts and personnel, from project design to assessment and reporting after credit issuance. Currently, specialized human resources are still limited.

Third is the difficulty of supply and demand. The carbon credit market in Vietnam is still young and lacks liquidity. To achieve high value, there must be a sufficient supply and demand with continuous transactions. Currently, due to the underdeveloped market, meeting supply and demand requirements is still challenging.

Finally, the challenge relates to technology and finance. Investing in green transformation requires significant costs, and green technologies are often more expensive than others. This creates considerable financial pressure on businesses and projects wanting to participate in the carbon credit market.

Nghe Nhan