During a meeting with Minister of Agriculture and Rural Development Lê Minh Hoan on September 16, Mariam Sherman, the newly appointed World Bank (WB) Country Director for Viet Nam, stated that the WB has agreed to purchase carbon credits from a low-emission rice cultivation project. The payment mechanism will be based on the results of emissions reductions.
Specifically, regarding the carbon credit trade in the rice sector, Minister Lê Minh Hoan mentioned that Viet Nam is striving to establish 1 million hectares of low-emission rice in the Mekong Delta by 2030. The Ministry of Agriculture and Rural Development (MARD) aims to reduce 10 million tons of carbon emissions annually from the rice industry.
Recently, the WB proposed a results-based payment mechanism (PforR) for the 1-million-hectare rice project, offering a price of $10 per reduced carbon credit. MARD has been working with various ministries and agencies to discuss the possibility of establishing a dedicated payment mechanism for the 1-million-hectare project.
The results-based carbon payment mechanism (PforR) has received widespread support and is considered highly feasible. Currently, 12 provinces within the scope of the 1-million-hectare rice project are making efforts to meet the World Bank’s requirements for the emissions reduction payment mechanism, according to Minister Lê Minh Hoan.
In recent years, the Forestry Department has received $51.5 million from the World Bank for purchasing forest carbon credits in Viet Nam. This money is being disbursed to nearly 70,000 beneficiaries and supports local communities' livelihood activities through a benefit-sharing plan. The Forest Development Fund has already received the funds from the WB, and Viet Nam has completed the disbursement of 77% of this amount. It is expected that the payment will be completed in 2024.
Currently, there remains a surplus of 5.9 million tons of CO2 credits, and the WB has proposed several options to address this. MARD has reported the issue to the Government, and it is anticipated that the necessary documents will be completed by this year to provide updated information. The Ministry hopes that the WB will continue to increase its support for sustainable forest development projects in areas facing natural disaster risks, helping these regions better adapt to climate change.