Early establishment of a working group to promote the carbon market in Viet Nam

On the morning of October 17, at the headquarters of the Ministry of Agriculture and Environment, Acting Minister Tran Duc Thang met with Mr. Honna Hitoshi, President and Representative Director of Erex Corporation, Japan. The meeting focused on cooperation directions in biomass energy, green energy transition, and the development of the Emissions Trading System (ETS) in Viet Nam.

At the meeting, Erex reported on the implementation of its biomass power projects and its plan to shift from fossil fuels to biomass in Viet Nam. Erex is currently implementing 19 biomass power projects across various provinces and cities, with a total capacity exceeding 1,100 MW. The company is also planning to convert coal-fired power plants to biomass, with a total capacity of more than 1,585 MW.

Some notable projects are being implemented under the JCM between Vietnam and Japan, such as plants in Yen Bai (50 MW) and Tuyen Quang (50 MW), which are expected to reduce hundreds of thousands of tons of CO₂ emissions annually.

Mr. Honna Hitoshi stated that Erex wishes to strengthen cooperation with the Ministry of Agriculture and Environment in sharing experience in biomass development, particularly in converting coal-fired power plants to biomass combustion, a field in which Japan has significant practical experience.

Erex expressed its desire to jointly establish a working group with the Ministry of Agriculture and Environment to promote the development of the carbon market in Viet Nam. This group would serve as a hub for information exchange and experience sharing regarding credit registration systems and connections to international carbon markets, particularly drawing on Japan’s experience in credit generation mechanisms and renewable energy operations.

Erex also proposed that the Ministry of Agriculture and Environment consider organizing a Japan–Viet Nam Joint Committee to evaluate and determine the credit allocation roadmap for biomass projects under the JCM framework.

“We are committed to long-term cooperation and ready to send experts to share experiences to help Viet Nam soon build and operate an ETS. We look forward to future visits by delegations from the Ministry of Agriculture and Environment to Japan to discuss this matter in greater detail,” Mr. Hitoshi said.

The head of Erex emphasized that biomass co-firing is an effective measure to reduce emissions. In the long term, the shift to this energy source also helps generate carbon credits and reduces dependence on fossil fuels.

Viet Nam was one of the first countries to participate in the Joint Crediting Mechanism (JCM) with Japan in 2013. To date, the two sides have approved 15 methodologies and registered 14 projects, with about 35,000 carbon credits issued, equivalent to support worth USD 35 million from Japan.

Since 2021, the number of countries participating in the JCM has increased to 31, aiming to implement for the 2021–2030 period under the Paris Agreement on climate change.

The Ministry of Agriculture and Environment is actively drafting a Decree on international exchange of greenhouse gas emission reduction outcomes and carbon credits, expected to be submitted to the Government in 2025, creating a legal basis for expanded cooperation with Japan, Singapore, South Korea, and Switzerland.

On that basis, Acting Minister Tran Duc Thang expressed his pleasure in welcoming Mr. Honna Hitoshi, Chairman and CEO of Erex Corporation, and his delegation to Viet Nam. He highly appreciated Erex’s achievements in clean energy development, particularly the operation of the biomass power plant in Hau Giang (now Can Tho City), a pioneering project under the JCM framework between Viet Nam and Japan.

The Acting Minister affirmed that Viet Nam always values and encourages cooperation with Japanese enterprises in the energy transition process and in achieving the net-zero emission commitment by 2050.

Among them, Erex is one of Japan’s leading corporations with extensive experience in biomass energy, particularly in converting coal-fired plants to biomass combustion, aligning with Viet Nam’s renewable energy development orientation.

The Acting Minister acknowledged Erex’s proposal to establish a joint working group between the Ministry of Agriculture and Environment and Erex to promote the development of the carbon market in Viet Nam. This will serve as an important technical cooperation channel for sharing experiences, information, and methods for operating credit registration systems and connecting with international carbon markets in the future.

The Ministry of Agriculture and Environment welcomed the proposal to organize delegations from the Ministry and Viet Namese enterprises to Japan for field visits, exchanges, and experience sharing in carbon credit generation mechanisms and renewable energy system operation, thereby promoting effective emission reduction models in Viet Nam.

The Ministry’s leadership assigned the Department of International Cooperation, in coordination with the Department of Climate Change, to study and propose a specific cooperation plan with Erex in the near future.

Regarding the JCM mechanism, the Acting Minister emphasized that the Ministry of Agriculture and Environment would coordinate with relevant Japanese agencies to soon finalize amendments to the Viet Nam–Japan JCM Cooperation Agreement, ensuring it aligns with the Paris Agreement and balances the interests of both sides.

He also encouraged Erex to continue investing and expanding its activities in Viet Nam in biomass energy and greenhouse gas reduction, closely cooperating with ministries, sectors, and localities to implement initiatives in line with the net-zero emission target by 2050.

The Acting Minister expressed confidence that Erex’s experience and commitment, combined with the support of the Ministry of Agriculture and Environment and Japan’s Ministry of Economy, Trade and Industry, would help advance strategic cooperation between Viet Nam and Japan in clean energy and climate change response.

“Viet Nam aims for double-digit economic growth in the coming years. Electricity demand is forecast to rise by 12–15%. Yet we also maintain our emission reduction goals. That is a challenge,” the Acting Minister stressed, expressing hope that the joint working group will soon be established so both sides can discuss specific cooperation contents.