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What are the prospects for selling rice carbon credits?

Bộ Nông nghiệp và Môi trườngBộ Nông nghiệp và Môi trường26/08/2024


Rice farming accounts for 6-8% of global food system emissions, while livestock farming contributes 40-50%. However, in Southeast Asia, emissions from rice are higher than from livestock or other crops. According to Mr. Quoc Cuong, an expert from the Climate Change Research Group of the International Rice Research Institute (IRRI), this is due to the traditional rice farming methods in the region, which produce significant amounts of methane.

"When rice paddies are flooded, it facilitates anaerobic decomposition, releasing methane and other greenhouse gases," Mr. Cuong explained at a recent seminar organized by the Ho Chi Minh City University of Agriculture and Forestry. It is estimated that each hectare of rice paddy emits approximately 12.7 tons of CO2 equivalent per year.

In Southeast Asia, Vietnam, along with Indonesia, has the greatest potential to reduce rice emissions, higher than Thailand and Myanmar. According to Mr. Cuong, applying low-emission farming techniques could reduce emissions by 40-65%. A 2021 study by the US Environmental Protection Agency (EPA) also indicated a 36% potential for reducing rice emissions, significantly higher than livestock (9%) and other crops (3%).

Vietnam currently has a plan to sustainably develop one million hectares of high-quality, low-emission rice in the Mekong Delta by 2030, which presents an opportunity to exploit this potential. In theory, low-emission rice cultivation opens the door to participation in the voluntary carbon credit market in the future.

A carbon credit is a certificate of the right to emit CO2 or other greenhouse gases, converted into an equivalent amount of CO2 (CO2 equivalent). One ton of CO2 equivalent is considered one carbon credit. CO2 equivalent is the unit of exchange in the carbon credit market. The seller is the party with the recognized ability to reduce or eliminate emissions.

For example, a rice cultivation project's CO2 reductions are recognized as carbon credits, which can then be sold to customers. It is estimated that with one million hectares of high-quality rice, the value of carbon credits could reach $100 million per year if sold at $10 per credit. "The potential for emission reduction in agriculture offers many opportunities for climate finance," Mr. Cuong stated.

However, realizing the emission reduction process, recognizing carbon credits, and selling them is a long road. This requires meticulous preparation and coordinated cooperation, according to experts.

Firstly, there's the practical aspect. Emissions in rice cultivation are reduced in land preparation, rice seed selection, cultivation methods, and post-harvest straw disposal. Of these, cultivation methods show the largest reduction in emissions, up to 33%, if alternating wet-dry irrigation (AWD) and efficient fertilization are used.

In Vietnam, two rice cultivation methods that can apply AWD are 1P5G (1 must, 5 reduce) and SRP (Sustainable Rice Practices). Currently, cultivation using the alternating wet and dry irrigation method has proven effective in reducing emissions and providing economic benefits , but on a small scale.

For example, in a pilot project using this farming method in Thanh An commune, Vinh Thanh district ( Can Tho ), rice farmers saw their profits increase by 1.3-6.2 million VND per hectare compared to traditional farming. CO2 emissions also decreased by 2-6 tons per hectare.

Next, farmers must abandon the practice of burning straw to reduce emissions by 15%, but this is also a significant challenge. At a forum late last month, Mr. Ngo Xuan Chinh, Deputy Director of the Center for Research and Transfer of Agricultural Technology (Southern Institute of Agricultural Science and Technology, IASVN), estimated that only 10% of straw in Vietnam is collected and recycled.

Secondly, the monitoring, verification, and recognition of carbon credits are still in their infancy. To date, the rice carbon market can adhere to standards such as CDM, Gold Standard, T-VER, and Article 6 of the Paris Agreement. Depending on the purpose and scale of the climate finance market the project aims for, the monitoring, reporting, verification (MRV), inventory, and valuation processes will be adjusted.

However, the bottleneck is that currently no country or initiative collects data on farm management practices related to emissions on a large or regular scale. Each national greenhouse gas inventory is based on small sample data and assumptions about farmers' practices, according to IRRI.

Thirdly, before the policy and technical conditions for a rice carbon credit market take shape, the overarching challenge for emission reduction efforts is the underdeveloped socio-economic and technical infrastructure in the Mekong Delta, which requires significant improvement.

According to a report by a team of experts from the Center for Agricultural Research (CGIAR) in the United States, covering 13 provinces and cities in the Mekong Delta region, all localities reported a lack of capital and difficulties in implementing emission reduction policies. Specifically, 12 localities faced challenges in logistics and exports; 11 provinces cited complex weather and natural disasters; and 10 localities reported a lack of infrastructure, policies, and transportation.

According to Dr. Pham Thu Thuy, a member of the CGIAR research group currently working at the University of Adelaide (Australia), reducing emissions from the food system as a whole requires improvements in a range of areas. For example, policies (regional linkage mechanisms, land planning, fiscal policies) need to change, and the food industry needs to be reorganized towards smart and sustainable practices, alongside investment in agricultural infrastructure.

Among a series of necessary actions, Associate Professor Dr. Kha Chan Tuyen, Deputy Head of the Department of Chemical and Food Technology (Ho Chi Minh City University of Agriculture and Forestry), recommended that agricultural production planning should follow a closed and streamlined system, increasing mechanization and applying digital technology. "The supply chain should be as short as possible, utilizing by-products," he said.

Vietnam has advantages in addressing these shortcomings, possessing a comprehensive legal framework, according to CGIAR. Furthermore, agriculture is identified as part of the implementation of the Nationally Determined Contribution (NDC) on greenhouse gas emission reduction. Therefore, analysts believe coordinated implementation is crucial.

"Timely action is needed to raise awareness among management and the community, especially those directly involved in the production and production management processes," recommended an expert from CGIAR.



Source: https://www.mard.gov.vn/Pages/trien-vong-ban-tin-chi-carbon-lua-den-dau.aspx

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