Accelerating business awareness of the carbon market

According to the World Steel Association (WSA), in 2022 alone, the steel industry generated emissions equivalent to 3.5 billion tons of carbon, accounting for about 7-8% of the total greenhouse gas emissions globally.

A survey on awareness and capacity building needs of enterprises to participate in ETS (emissions trading system) by the Energy and Environment Consulting Joint Stock Company (VNEEC) from November to December 2023 showed that the proportion of enterprises with knowledge about ETS and carbon markets is still too low.

Accordingly, 53.16% have heard about ETS and carbon markets, but do not know about the basic operating principles; 26.16% have heard about the basic operating principles but do not understand the difference between ETS and carbon markets; 16.03% do not understand how ETS and carbon markets operate; 3.38% understand how ETS and carbon markets work and the differences between them; only 1.27% understand how ETS and carbon markets work, their differences and interactions on carbon trading platforms.

ENTREPRENEURIAL AWARENESS INCREASED SIGNIFICANTLY AFTER TRAINING

The survey results also show that 32.07% of enterprises have conducted greenhouse gas inventories (of which 68.42% did it themselves, 31.58% hired a third party to do it), 67.93% have not conducted inventories. 27.85% of enterprises have plans to reduce greenhouse gas emissions, 14.77% do not have plans and 57.38% are preparing to build them.

Ms. Dang Hong Hanh, Co-founder & CEO of VNEEC, believes that businesses' understanding of ETS is not high, so businesses need to pay attention to participating in training courses on this issue.

Ms. Dang Hong Hanh, Co-founder & CEO of VNEEC, shared at a training course on ETS.

In the past, VNEEC has organized many training courses for businesses on ETS. After the training, businesses' awareness of ETS has been raised a lot.

For example, before attending the training course, only 9.02% of businesses were aware of the basic differences between ETS, voluntary carbon market, compliant carbon market and carbon tax, but after the training course, this number increased to 61.44%.

Similarly, the level of awareness of companies about offsets and emission quotas was only 14.48%, but after the training, it increased to 77.12%. 11.75% of businesses were aware of the purpose of a carbon portfolio management strategy, this number increased to 50.65% after the training course.

Therefore, Ms. Hanh recommends that businesses should increase their participation in training courses on ETS and carbon markets. This training course is part of the support of the Southeast Asia Energy Transition Partnership (ETP) towards developing a carbon market in Vietnam, in coordination with the Department of Climate Change, Ministry of Natural Resources and Environment. The training program will prioritize businesses with large emissions and in emission-emitting industries that will have to participate in the pilot ETS (2026 - 2027) and participate in the ETS when fully operational (from 2028). The program will also expand training for units with lower emissions to participate. At the same time, priority will be given to domestic businesses to promote the dynamism of the ETS market with the participation of many types of businesses.

VIETNAM HAS HAD 150 PROJECTS GRANTED 40.2 MILLION CARBON CREDITS

Speaking at the opening ceremony of the "Training Course on Emissions Trading System (ETS) and Carbon Market" on December 9-10, Mr. Nguyen Tuan Quang, Deputy Director of the Department of Climate Change (Ministry of Natural Resources and Environment), said that in order to achieve the goal of reducing greenhouse gas emissions, in addition to energy conversion solutions, energy saving and application of advanced, low-emission technologies (such as circular economy, low-carbon emission technologies), many countries also apply carbon pricing tools.

Commonly applied carbon pricing tools are carbon tax, greenhouse gas emissions trading system (ETS), carbon credit mechanism.

To date, about 90 countries and territories in the world have applied about 110 carbon pricing tools. In 2024 alone, these carbon pricing tools controlled more than 12.8 billion tons of CO2 equivalent, accounting for 24% of total global greenhouse gas emissions. Mr. Quang said that Vietnam has determined to apply carbon pricing tools. Specifically, the compliant carbon market aims to support the goal of reducing greenhouse gas emissions. The development of a carbon market in Vietnam will contribute to the goal of reducing greenhouse gas emissions at low costs for businesses and society, promote the development of low-emission technologies, contribute to improving the competitiveness of Vietnamese enterprises, towards developing a low-carbon economy and proactively responding to climate change.

While the domestic compliant carbon market is still in the construction phase, in fact, Vietnamese enterprises have been exchanging carbon credits from Vietnam on the world voluntary carbon market since the mid-2000s, through the Clean Development Mechanism (CDM) since 2006; Gold Standard Mechanism (GS), Verified Carbon Standard Mechanism (VCS) since 2008; Joint Credit Mechanism with Japan (JCM) since 2013...

Vietnam has had 150 projects granted 40.2 million carbon credits and have been exchanged on the world market. Vietnam is also one of the 4 countries with the most registered CDM projects (after China, Brazil, India). In terms of credits collected from CDM projects, Vietnam ranks 9th out of 80 countries with CDM projects granted credits.

To establish and operate the domestic carbon market, the Law on Environmental Protection 2020 has stipulated the organization and development of the carbon market in Article 139 and stipulates that greenhouse gas emission facilities must conduct greenhouse gas inventories in the list of greenhouse gas emission quotas allocated and have the right to exchange and trade on the domestic carbon market.

The Government has issued a roadmap for implementing a domestically compliant carbon market in Decree No. 06/2022/ND-CP with the important goal of piloting a carbon credit trading platform from 2025.

Currently, the Ministry of Natural Resources and Environment is developing and finalizing a draft Decree amending and supplementing a number of articles of Decree No. 06/2022/ND-CP, clearly defining the subjects allocated greenhouse gas emission quotas, namely thermal power plants, iron and steel production facilities, and cement production facilities in the list of greenhouse gas emission facilities issued by the Prime Minister, updated every two years.

In parallel with focusing on developing regulations on carbon credit management, greenhouse gas emission quota exchange activities and carbon credits, according to Mr. Quang, guiding the implementation of domestic and international carbon credit exchange and offset mechanisms in accordance with the provisions of law and international treaties, implementing capacity building activities, and raising awareness of the carbon market are very important and necessary activities./.