Vietnam is considered a country with significant potential for carbon credit supply. If equivalent transactions are carried out, the nation could sell carbon credits valued at approximately USD 300 million per year. The development of the carbon credit market will help Vietnam green its economy and enhance the export competitiveness of its businesses.
The carbon credit market is a marketplace where traded goods are quantified in carbon units. Specifically, two types of goods are traded in the carbon market: emission allowances and carbon credits.
Emission allowances refer to the volume of greenhouse gases, converted into tons of CO2 equivalent, that regulatory authorities permit a facility/entity/organization to emit within a specified timeframe. If a facility exceeds its allocated quota, it must purchase allowances from other entities or acquire carbon credits on the market to offset the excess emissions, or face penalties imposed by the regulatory body.
Carbon credits represent the equivalent tons of CO2 that a particular activity can generate based on its capacity to absorb or remove greenhouse gases (e.g., afforestation activities, gas recovery for power generation) or its ability to reduce emissions compared to conventional activities (e.g., renewable energy reducing emissions compared to fossil fuels, energy-saving measures reducing emissions compared to non-conserving practices, etc.).
Read more on the online magazine Environment and Life.
