Getting ready for the forest carbon market: [1] Khanh Hoa chooses a steady path

Great potential, but a need for in-depth data

As Vietnam works toward its goal of net-zero emissions by 2050, forest resources are emerging as a high-value ecological asset, opening up significant prospects for carbon absorption and storage services. With its large forest area, high forest cover, and diverse ecosystems, Khanh Hoa province has a major opportunity to enter the forest carbon credit market. Even so, the locality is taking a proactive but careful approach, focusing first on building its data infrastructure and resolving technical bottlenecks before formally entering the market.

According to Tran Ngoc Hieu, Deputy Director of the Khanh Hoa Department of Agriculture and Environment, the province has substantial potential to develop forest carbon absorption and storage services. Under Decision No. 866/QD-UBND, issued by the Khanh Hoa Provincial People's Committee on March 17, 2026, announcing the province's 2026 forest status, the province currently has 410,000 hectares of forest and forestry land. Of that total, natural forest accounts for more than 328,000 hectares, planted forest for over 75,000 hectares, and nearly 7,000 hectares consist of planted areas that have not yet met the criteria to be classified as forest. This large area, high coverage rate, and diverse forest ecosystem, including many special-use and protection forests of high biodiversity value, provide favorable conditions for the province to develop emissions-reduction projects.

To turn this potential into reality, Khanh Hoa is currently conducting a province-wide forest survey. Once complete and formally announced by the Provincial People's Committee, the agriculture and environment sector will have a synchronized, comprehensive dataset on forest area, status, timber volume, distribution, and quality. This will serve as an essential foundation for state forestry management and for tracking changes in forest resources, as well as a basis for determining biomass, carbon stock, and each forest type's capacity for carbon absorption and storage.

However, Hieu noted that the results of a standard forest survey do not automatically constitute the specialized database needed for the carbon market. In-depth indicators required directly for the market, such as detailed biomass, carbon stock, annual CO2 absorption volume, and each forest type's potential to generate credits, still require further surveying, calculation, standardization, and verification. Based on guidance from the Ministry of Agriculture and Environment, the province will review, digitize, and standardize its data in the coming period, gradually building an emissions-reduction database capable of connecting with the national Green Carbon Database.

Resolving difficulties to get market-ready

Despite its abundant potential, Khanh Hoa has not yet issued a pilot scheme for forest carbon credit trading. Leadership at the Department of Agriculture and Environment said the province has chosen a step-by-step approach because the legal framework for this field has only recently been completed. Specifically, Government Decree No. 180/2026/ND-CP took effect only on July 15, 2026, alongside Circular No. 31/2026/TT-BNNMT, issued the same day, which sets out the pricing methodology, price framework, and payment levels for forest carbon absorption and storage services. The department is now studying the new regulations closely and reviewing the province's resource status and data foundation to advise the Provincial People's Committee on an appropriate implementation roadmap.

Preparations on the ground show the province facing considerable technical and resource challenges. The forest carbon sector demands rigorous standards for measurement, reporting, and verification (MRV) of emissions-reduction results. Yet local specialized staff have not received in-depth training in carbon quantification or verification procedures, and equipment for processing remote-sensing imagery, spatial data, and biomass modeling remains inconsistent, with a shortage of high-performance devices.

In addition, funding for specialized surveys, establishing standard sample plots, sampling, hiring consultants, and independent verification remains limited. Questions also remain around selecting carbon standards, determining ownership rights, and designing benefit-sharing mechanisms among the state, forest owners, and communities, as well as ensuring price stability and gauging domestic market demand, all areas that still require more specific guidance.

According to Hieu, once the forest carbon market operates effectively, revenue from these services will provide forest owners with a stable source of financing to reinvest in forest protection, fire prevention and fighting, forest restoration, the application of science and technology, and improved management capacity. For households and communities contracted to protect forests, participating in such projects would help create livelihoods and boost income, in turn strengthening people's connection to forest resource protection.

Entering the market is not just about generating revenue, it also serves the higher goal of improving forest quality and advancing sustainable forestry. Khanh Hoa is committed to thoroughly preparing the necessary technical conditions and data infrastructure, moving forward on an appropriate timeline that ensures legal compliance and balances the interests of all stakeholders, so that the province will be ready to participate effectively as soon as the carbon market is fully operational.