Regulations on Carbon Credits: Understanding them to participate

Regulations on Carbon Credits

Carbon credits are a unit of measurement for greenhouse gases, attracting the attention of businesses in Vietnam. Instructions from the Government and the Ministry of Natural Resources and Environment clearly define the rules of participation.

Renewable energy and clean transportation businesses stand out in reducing emissions and achieving carbon credits. Participating in this system not only brings environmental benefits but also enhances reputation and economic performance. Every individual, through participation, contributes to the goal of building a sustainable future and minimizing our negative impact on the planet.

So what are the regulations on carbon credits that need to be clearly understood? Let’s find out details with VREnergy!

Regulations on carbon credits in Vietnam

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In order for carbon credits to be traded on the market, the authorities have created a mechanism to encourage organizations and individuals to participate in greenhouse gas emission reduction activities as follows:

Relevant regulatory and regulatory agencies

The main management agency for carbon credits in Vietnam is the Ministry of Natural Resources and Environment. This Ministry is responsible for developing and promulgating regulations on carbon credits, organizing carbon credit exchange and offsetting activities, managing carbon credit trading floors , etc.

Regulations related to carbon credits in Vietnam include:

  • Law on Environmental Protection 2020
  • Decree No. 06/2022/ND-CP regulating greenhouse gas emissions mitigation and ozone layer protection
  • Circular No. 01/2022/TT-BTNMT guiding the implementation of Decree No. 06/2022/ND-CP regulating greenhouse gas emissions mitigation and ozone layer protection

Vietnam’s goals and commitments to reduce carbon emissions

Vietnam is one of the countries heavily affected by climate change. To respond to this situation, Vietnam has set goals and commitments to reduce carbon emissions as follows:

  • General goal: By 2050, Vietnam strives to achieve net zero emissions.
  • Specific goals: Reduce greenhouse gas emissions by 27% compared to the business-as-usual development scenario by 2030; Reduce greenhouse gas emissions by 45% compared to the business-as-usual scenario by 2030, if there is international financial and technological support.

To achieve these goals, Vietnam has implemented many solutions, including developing the carbon credit market. The carbon credit market is an important economic mechanism to encourage organizations and businesses to reduce greenhouse gas emissions.

In Vietnam, the carbon credit market is in the pilot phase. The Vietnamese government aims to successfully pilot the carbon credit market by 2025 and officially operate from 2028.

Developing the carbon credit market in Vietnam is important in reducing carbon emissions, contributing to responding to climate change. This market also creates opportunities for organizations and businesses to reduce emissions costs, improve competitiveness and develop sustainably.

Regulations on recording and confirming carbon credits

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Carbon credits are a measure of the amount of greenhouse gases reduced or removed from the atmosphere. Carbon credits can be generated from activities that reduce greenhouse gas emissions, such as:

  • Planting forests
  • Use renewable energy
  • Improve energy use efficiency
  • Minimize waste

In Vietnam, regulations on recording and confirming carbon credits are stipulated in the Law on Environmental Protection 2020 and Decree No. 06/2022/ND-CP regulating greenhouse gas emission mitigation and layer protection. ozone.

The process of recording and confirming carbon credits is carried out in the following 4 steps:

Step 1: Assess the ability to create carbon credits

This step is to determine the project’s ability to generate carbon credits, including the following information:

  • Project type
  • Project scale
  • The amount of greenhouse gases expected to be reduced or eliminated

Step 2: Measure and report greenhouse gases

This step collects data and performs calculations to determine how much greenhouse gas has been reduced or eliminated.

Step 3: Verify the authenticity of the data

This step is to evaluate the authenticity of measurement and reporting data.

Step 4: Confirm carbon credits

This step is to issue a carbon credit certificate for the project.

Regarding the amount of greenhouse gas, there will be standards and measurement methods according to regulations. Carbon measurement standards and methods are used to ensure the accuracy and consistency of measurements. In Vietnam, carbon measurement standards and methods are prescribed in Circular No. 17/2022/TT-BTNMT regulating measurement, reporting, appraisal techniques for greenhouse gas emission mitigation and gas inventory. greenhouse field waste management.

This Circular regulates carbon measurement standards and methods for the following fields:

  • Craft villages and agricultural production
  • Waste treatment and recycling
  • Energy
  • Transportation
  • Industry
  • Build
  • Natural resources

Recording and validating carbon credits is an important process to ensure the quality of carbon credits. This process is carried out in accordance with legal regulations and international standards.

Regulations on trading and using carbon credits

In Vietnam, regulations on carbon credit trading are stipulated in Decree No. 06/2022/ND-CP regulating greenhouse gas emissions mitigation and ozone layer protection.

According to this regulation, carbon credit transactions are carried out through the carbon credit exchange. The carbon credit exchange is the center for processing transactions on buying and selling carbon credits, greenhouse gas emission quotas and auctioning, borrowing, paying back, and transferring greenhouse gas emission quotas.

Subjects allowed to trade carbon credits include:

  • Businesses emit greenhouse gases
  • Enterprises have projects to create carbon credits
  • Other organizations and individuals wishing to buy and sell carbon credits

Carbon credit trading process

The carbon credit trading process is carried out according to the following steps:

Step 1: Register for trading

Entities wishing to trade carbon credits must register with the carbon credit exchange.

Step 2: Find partners

Subjects wishing to buy and sell carbon credits can find partners on the carbon credit exchange or through other channels.

Step 3: Negotiate and sign the contract

The two parties buying and selling carbon credits negotiate and sign a carbon credit trading contract.

Step 4: Payment and delivery of carbon credits

The two parties buying and selling carbon credits make payment and deliver carbon credits according to the agreement in the contract.

How to use carbon credits to reduce carbon emissions

Carbon credits can be used to reduce carbon emissions in a number of ways:

  • Buy carbon credits from projects that reduce greenhouse gas emissions. This is the most common way to use carbon credits to reduce carbon emissions.
  • Use carbon credits to offset your business’ greenhouse gas emissions.
  • Use carbon credits to develop projects that reduce greenhouse gas emissions.

Buy carbon credits from projects that reduce greenhouse gas emissions

When purchasing carbon credits from projects that reduce greenhouse gas emissions, businesses will offset their greenhouse gas emissions by supporting these projects to continue operating. Greenhouse gas emission reduction projects may include:

  • Planting forests
  • Use renewable energy
  • Improve energy use efficiency
  • Minimize waste

Use carbon credits to offset your business’ greenhouse gas emissions

Businesses can use carbon credits to offset their greenhouse gas emissions. When using carbon credits to offset, businesses will not have to pay fines for emissions exceeding the quota.

Use carbon credits to develop projects that reduce greenhouse gas emissions

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Businesses can use carbon credits to develop projects that reduce greenhouse gas emissions. This will help businesses reduce greenhouse gas emissions from their own operations.

Trading and using carbon credits is one of the important solutions to reduce greenhouse gas emissions. Proper implementation of regulations on carbon credit trading and use will contribute to ensuring the transparency and efficiency of the carbon market.

Regulations on carbon credit monitoring and reporting

A carbon credit monitoring and reporting system is a system that includes the processes, procedures and tools necessary to monitor and report the amount of greenhouse gases reduced or removed from carbon credit projects. .

The carbon credit monitoring and reporting system includes two main components:

  • Monitoring: Monitoring is the process of collecting data on the amount of greenhouse gases reduced or eliminated from projects that generate carbon credits.
  • Reporting: Reporting is the process of providing information about monitoring results to relevant parties.

Carbon credit reporting requirements and standards

Carbon credit reporting requirements and standards are specified in legal documents and international standards.

In Vietnam, carbon credit reporting requirements and standards are prescribed in Decree No. 06/2022/ND-CP regulating greenhouse gas emissions mitigation and ozone layer protection.

According to this regulation, carbon credit reporting requirements and standards include the following:

  • Information about the project to create carbon credits: Project name, location, project owner, project objectives, project implementation plan and project implementation results.
  • Information about the amount of greenhouse gases reduced or removed: Type of greenhouse gas, amount of greenhouse gas reduced or removed, method of measuring and calculating the amount of greenhouse gas reduced or removed.
  • Information on Risk Factors and Uncertainties: Risk factors and uncertainties that may affect the amount of greenhouse gases that are reduced or eliminated.

International standards for carbon credit reporting include:

  • Carbon credit tracking and reporting (VCS)
  • International standard for carbon credits (Gold Standard)
  • Carbon credit standard (CER)

Carbon credit monitoring and reporting systems are an important component of carbon markets. Proper implementation of regulations on carbon credit monitoring and reporting will contribute to ensuring the transparency and efficiency of the carbon market.

Regulations on carbon credit supply chains

The carbon credit supply chain is a series of activities involved in generating, validating, trading, and using carbon credits.

The process and requirements of the carbon credit supply chain are regulated in legal documents and international standards.

In Vietnam, the process and requirements of the carbon credit supply chain are regulated in Decree No. 06/2022/ND-CP regulating greenhouse gas emissions mitigation and ozone layer protection.

According to this regulation, the process and requirements of the carbon credit supply chain include the following steps:

Step 1: Create project

This step is to determine the project’s ability to generate carbon credits, including the following information:

  • Project type
  • Project scale
  • The amount of greenhouse gases expected to be reduced or eliminated

Step 2: Register project

This step is to register the project with the competent authority.

Step 3: Implement the project

This step is intended to implement greenhouse gas reduction or removal activities according to the project plan.

Step 4: Monitor and report

This step is intended to monitor and report the amount of greenhouse gases reduced or eliminated from the project.

Step 5: Confirm carbon credits

This step is to confirm the amount of carbon credits generated from the project.

Step 6: Trade and use carbon credits

This step is aimed at trading and using carbon credits.

Carbon credit supply chain requirements include:

  • Transparency: All information about the carbon credit generating project must be public and transparent.
  • Authenticity: The amount of carbon credits generated from the project must be verified by independent organizations.
  • Sustainability: Projects that generate carbon credits must be designed and implemented in a sustainable manner.

Steps to participate in the carbon credit program

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Participating in the carbon credit program is a way for organizations and individuals to contribute to reducing greenhouse gas emissions. To participate in this program, organizations and individuals need to take the following steps:

Step 1: Find out the program’s regulations and standards

Before participating in the carbon credit program, organizations and individuals need to carefully learn the regulations and standards of the program. This will help organizations and individuals clearly understand the necessary requirements to participate in the program and ensure that their carbon reduction activities meet the program standards.

Step 2: Plan and implement carbon reduction activities

After carefully studying the program’s regulations and standards, organizations and individuals need to plan and implement carbon reduction activities. Carbon reduction activities may include:

  • Planting forests
  • Use renewable energy
  • Improve energy use efficiency
  • Minimize waste

Organizations and individuals need to choose carbon reduction activities appropriate to their actual conditions.

When planning and implementing carbon reduction activities, organizations and individuals should pay attention to the following issues:

  • Determine carbon emission reduction goals: Organizations and individuals need to determine their carbon emission reduction goals. This goal needs to be consistent with the actual conditions of organizations and individuals and the requirements of the carbon credit program.
  • Choose appropriate carbon reduction activities: Organizations and individuals need to choose carbon reduction activities appropriate to their actual conditions. These activities need to be highly effective in reducing carbon emissions and potentially sustainable.
  • Establish a specific implementation plan: Organizations and individuals need to establish a specific implementation plan for carbon reduction activities. This plan needs to include contents such as: goals, scope, implementation time, necessary resources, etc.
  • Monitor and evaluate effectiveness: Organizations and individuals need to monitor and evaluate the effectiveness of carbon reduction activities. This will help organizations and individuals promptly adjust implementation plans if necessary.

Participating in the carbon credit program is an opportunity for organizations and individuals to contribute to reducing greenhouse gas emissions and protecting the environment. By carrying out carbon reduction activities, organizations and individuals can create carbon credits and trade on the carbon credit market.

Step 3: Register project and monitor and report

After implementing carbon reduction activities, organizations and individuals need to register the project with the competent authority. At the same time, organizations and individuals need to monitor and report the amount of carbon reduced or removed from the project.

Step 4: Confirm and trade carbon credits

After monitoring and reporting, the amount of carbon reduced or removed from the project will be assessed by the certifying organization. If the amount of carbon reduced or removed meets the program’s standards, the certifying organization will issue a carbon credit certificate for the project.

Organizations and individuals can trade carbon credits on the carbon credit exchange or through other channels.

Conclude

Carbon credits are an important economic tool to reduce greenhouse gas emissions and protect the environment. Participating in carbon credits is important as follows:

Participating in carbon credits is a way for organizations and individuals to contribute to protecting the environment and limiting climate change. Participating in carbon credits can promote sustainable development of businesses.