Real estate developer launches Vietnam’s first carbon credit exchange

Property developer CT Group launched Vietnam’s first Carbon Credit Trading Platform in ASEAN (CCTPA) Friday.

It becomes the first firm in Vietnam to provide full consultancy services for businesses, organizations and individuals on developing carbon credit projects. The platform will enable stakeholders to register, verify and confirm carbon credits; as also provide mechanisms for carbon credit exchange, compensation and borrowing, as also apply carbon taxes regionally and globally.

Hoang Bach Duong, permanent vice chairwoman of CT Group, said that from October 1, 27 EU countries will begin piloting carbon tax on goods exported to the market under the Carbon Border Adjustment Mechanism (CBAM). The U.S. will be the next market to enact this mechanism, imposing a carbon tax on importers by 2024.

"In a globalized world, building a carbon credit market and green finance is an inevitable move to increase global competitiveness. Meeting the carbon tax barrier standards set by major markets will play a decisive role in the new race in the global supply chain," Duong said.

Building and operating a carbon market requires huge technical, human and financial investments. Furthermore, since this is a new market in Vietnam, several teething problems are likely, she said.

The CCTPA also marks the start of a project initiated by the Ministry of Natural Resources (MoNRE) on "Developing the carbon market in Vietnam" by the Ministry of Natural Resources and Environment (MoNRE). Under the project, Vietnam will pilot the carbon credit exchange between now and 2025 and officially operate it by 2028.

Duong said the CCTPA will encourage businesses to switch to cleaner and more efficient technology. In addition to helping Vietnam achieve the Net Zero commitment by 2050 that the country made at the 26th UN Climate Change Conference in Glasgow (COP26), the platform will also invest in blockchain research and application for the carbon market, ensuring the highest transparency, reliability and efficiency in managing, allocating, transferring, calculating and tracking carbon credits.

The carbon market was not only key to Vietnam achieving the Net Zero emissions goal, but also an inevitable trend that enjoins businesses to join hands in regional and global engagement, said Tang The Cuong, head of the Department of Climate Change under the MoNRE.

“The Net Zero that Vietnam committed at COP26 in 2021 is a very ambitious and challenging goal, and building a carbon market is key to achieving it,” he said.

The carbon market will contribute to the goal of reducing greenhouse gas emissions at low corporate and social costs, thus promoting the development of low emission technologies, he added.

On Wednesday, Vietnam received $41.2 million from selling forest carbon credits.

At COP26, the Organisation for Forest Financing (Emergent), a trustee of the Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, inked a Letter of Intent with Vietnam. This will enable Vietnam to transfer to LEAF/Emergent 5.15 million tonnes of carbon dioxide emission reduction from forests in the south-central and Central Highlands regions between 2022 and 2026 for $51.5 million.