Hundreds of billions of dong worth of carbon credits are 'stuck'.

Quang Binh province has a vast area of ​​natural forests that could be fully exploited for carbon credit sales; however, Decree 107 is currently causing many difficulties in payment - Photo: QUOC NAM

However, the majority of these funds are currently "stuck" in the accounts of forest owners due to two regulations in Decree 107.

The forest owners, namely the protective forest management boards and forestry companies, are the entities facing the most difficulties. These are also the forest owners managing extremely large areas of natural forest in the region.

The money came in, but it was as if nothing had come of it.

Long Dai Forestry Company, one of the largest forest management units in Quang Binh province, received carbon credit payments earlier this year. Managing over 57,000 hectares of natural forest, the company received a total of 21 billion VND in carbon credits from the World Bank in 2023 and 2024.

The entire amount was transferred to the unit's account more than six months ago. However, to date, the unit has still been unable to disburse the funds for their intended purpose.

According to the leaders of Long Dai Company, this money is expected to be used to cover the costs of managing forest protection contracts, support livelihoods for communities participating in forest management agreements, support commune People's Committees participating in forest management agreements (2% per commune), implement silvicultural measures such as enclosure and regeneration promotion, forest enrichment, and support training and awareness campaigns.

However, due to the regulations of Decree 107, all those plans have to be temporarily "frozen".

According to our research, Decree No. 107/2022/ND-CP, issued on December 28, 2022, by the Government , concerns the pilot program for transferring emission reduction results and managing the financial aspects of greenhouse gas emission reduction payment agreements in the North Central region.

This includes a regulation stating "no overlapping expenditures with other state budget expenditures." This is the biggest "bottleneck" leading to many units receiving carbon credit payments into their accounts but being unable to disburse the funds.

The leader of a forestry management company in Quang Binh explained that currently, most of the natural forest area in Quang Binh province has been allocated funding from the state budget according to current policies through various programs and projects.

"Therefore, spending additional funds from carbon credits would constitute overlapping and redundant spending, violating Decree 107," the company's leader said.

We've made requests many times, but...

According to the Quang Binh Provincial Forest Protection Department, the province has 11,411 forest owners who are households, individuals, and local communities; 23 forest owners who are organizations; and 71 commune-level People's Committees that are eligible for carbon credit payments.

Of these, only forest owners such as households, individuals, local communities, and commune-level People's Committees have relatively easy access to carbon credit payments.

As for forest owners who are organizations, only a few units managing special-use forests and Phong Nha-Ke Bang National Park are in a favorable position. The remaining forest owners, such as protection forest management boards and forestry companies, are completely unable to "freeze" this money. This amount reaches hundreds of billions of dong.

In Quang Tri province, the head of the Department of Agriculture and Rural Development also stated that they have received 50 billion VND in carbon credit payments but are "stuck" due to Decree 107, affecting similar groups of forest owners.

"Currently, the maximum payment for forest protection under the latest regulations is up to 800,000 VND per hectare. However, in reality, the payment for other forest protection programs, also funded by the state budget, is currently only 300,000 VND per hectare."

"In other words, the number of forest protectors is still 'out of reach' by more than half of the target. If we consider payments from carbon credits to compensate for that gap, it will enhance people's responsibility in protecting the forest," the head of the department said.

Mr. Tran Quoc Tuan, Director of the Department of Agriculture and Rural Development of Quang Binh province, said that Quang Binh province has great potential in exploiting carbon credits because it has the second largest forest cover in the country. The province is also orienting itself towards developing diverse forests to exploit the value of carbon credits. However, the obstacles posed by Decree 107 are a "bottleneck" that hinders this process.

According to Mr. Tuan, Quang Binh province has submitted a request to the Ministry of Agriculture and Rural Development to remove the regulations causing these obstacles. However, to date, the ministry has not taken any action to resolve the issue.

The leaders of the Quang Tri Department of Agriculture and Rural Development also stated that some regulations of Decree 107 are creating significant obstacles to forest development in the direction of carbon credit exploitation.

"We have also submitted a proposal to the Ministry of Agriculture and Rural Development and hope that higher-level agencies will find solutions to resolve the issues so that carbon credit exploitation can yield the best results," said the head of the department.

According to the head of the Quang Binh Provincial Forest Protection Department, in Decree 107, besides the issue of prohibiting overlapping payments, there are also obstacles regarding the subjects participating in forest management agreements.

Specifically, Clause 2 of Article 5 of the decree stipulates that the entities participating in forest management agreements with forest owners are local communities, while the natural forest areas assigned to these organizations for management are mainly in remote areas, along the Vietnam-Laos border, where there are very few or no local communities living.

Therefore, many forest owners, who are organizations, are unable to contract out forest protection to local communities.

Source: https://tuoitre.vn/hang-tram-ti-dong-tin-chi-carbon-mac-ket-20240903224109837.htm