(Inspection)- The Government has just issued Decree 06/2022/ND-CP regulating greenhouse gas emissions mitigation and ozone layer protection. This Decree details a number of articles of the Law on Environmental Protection, including Article 91 on greenhouse gas emission mitigation, Article 92 on ozone layer protection, Article 139 on organization and development of the carbon market.
1. Development roadmap and time to deploy the domestic carbon market
The Decree specifically stipulates the development roadmap and timing for implementing the domestic carbon market:
– Period until the end of 2027:
+ Develop regulations for carbon credit management, activities for exchanging greenhouse gas emission quotas and carbon credits; develop regulations for operating the carbon credit exchange.
+ Pilot implementation of the carbon credit exchange and offset mechanism in potential areas and guide the implementation of the domestic and international carbon credit exchange and offset mechanism in accordance with the provisions of law and regulations international treaties to which the Socialist Republic of Vietnam is a member.
+ Establish and organize pilot operation of a carbon credit exchange from 2025.
+ Implement capacity building activities and raise awareness about carbon market development.
– Period from 2028:
+ Organize the operation of an official carbon credit exchange in 2028.
+ Regulating activities connecting and exchanging domestic carbon credits with regional and world carbon markets.
2. Regulations on the exchange of greenhouse gas emission quotas and carbon credits on the domestic carbon market
Specifically, the exchange of greenhouse gas emission quotas and carbon credits is carried out on the carbon credit exchange platform and the domestic carbon market according to regulations.
Greenhouse gas emission quotas specified in Clause 2, Article 12 are traded on the exchange. 1 unit of greenhouse gas emission quota is equal to 1 ton of CO2 equivalent.
Carbon credits obtained from programs, projects under the carbon credit exchange and offset mechanism are allowed to be converted into units to offset greenhouse gas emissions quotas on the trading floor. 1 carbon credit equals 1 ton of CO2 equivalent.
Facilities can bid to own additional greenhouse gas emission quotas in addition to the greenhouse gas emission quotas allocated during the same commitment period. Facilities can transfer unused greenhouse gas emission quotas from the previous year to subsequent years within the same commitment period. Facilities can borrow greenhouse gas emission quotas allocated for the following year for use in the previous year within the same commitment period.
Facilities can use carbon credits from projects under carbon credit exchange and offset mechanisms to compensate for greenhouse gas emissions that exceed the greenhouse gas emissions quota allocated for a period. commitment paragraph. The amount of carbon credits to offset emissions must not exceed 10% of the total greenhouse gas emission quotas allocated to the facility.
The allocated greenhouse gas emission quotas will automatically be recovered by the Ministry of Natural Resources and Environment when facilities stop operating, dissolve or go bankrupt.
The State encourages establishments to voluntarily pay back unused greenhouse gas emission quotas to contribute to the national greenhouse gas emission reduction goal.
At the end of each commitment period, facilities must pay for greenhouse gas emissions exceeding the allocated greenhouse gas emission quotas after applying auctions, transfers, and loans. Borrow and use carbon credits to offset. In addition to payment, greenhouse gas emissions exceeding the allocated quota will be deducted from the allocated quota for the following commitment period.
The Ministry of Natural Resources and Environment guides the auction, transfer, borrowing and payment of greenhouse gas emission quotas.
Source: Inspectorate Newspaper
