Ha Tinh focuses on FSC-carbon model: Green finance opportunities for forest owners

Forests are gold

Seventy years ago, Huong Son Forestry Enterprish, the predecessor of the current Huong Son Forestry and Services Company Limited (HFSC), was assigned by the state to manage and protect nearly 20,000 hectares of natural forest bordering Laos. Over more than seven decades, the enterprise has protected and effectively enriched the entire area, particularly since the government decided to close natural forests in 2014.

A 60-hectare green ironwood forest, with trees aged 20 to 50 years, stands majestically at the headwaters of Khe Nam Village, Son Kim 1 Commune—a testament to the value of this "gold forest”. Delving deeper into the Nga Doi forest protection station area, 25 hectares of large-timber acacia in sub-area 38, Son Tay Commune, were quietly planted, tended, and protected by 20 people into a large-timber forest, promising two to three times the economic value compared to harvesting young acacia. On the other side of the mountain slope, where humidity is consistently around 80 percent, a medicinal plant forest of Vietnamese galingale is budding and developing into a concentrated area of over 35 hectares.

Mr. Tran Trung Anh, Deputy Director of HFSC, who personally counted every tree, measured every meter of forest land, and authored the strategy to develop the unit's nearly 20,000 hectares of forest into an FSC–carbon model, affirmed: now and in the future, the solution of forest management focused on ecosystem service conservation and maintaining carbon stock not only allows for sustainable forest management according to international standards but also opens opportunities to access green finance, the voluntary carbon market, and international partnerships. This, he noted, helps improve local livelihoods, protect forest resources, and promote sustainable forestry development. Simply put, the richer the forest and the larger the timber, the greater the economic value gained.

"Since 2012, HFSC registered to protect and develop FSC forests across the entire area under its management. By 2014, 100 percent of that area was granted FSC certification by the GFA Certification Body. In 2016, the company became the first unit nationwide to receive the 'Forest Management for Ecosystem Service Conservation Focused on Maintaining Forest Carbon Stock' certification from the Forest Stewardship Council”,  Mr. Trung Anh stated.

According to calculations, the estimated annual carbon sequestration and storage of the nearly 20,000 hectares of forest managed and protected by HFSC is about 150,000 tons. If sold at the price currently being set for the Central Highlands region, approximately 10 USD per ton, the forest owner could earn about 36 billion VND(equivalent to approximately USD 1.4 million). "This represents a massive resource for re-protecting and developing the forest even more sustainably”,  Mr. Trung Anh emphasized.

As for planted forests, most of the area owned by Ha Tinh residents is planted with acacia, but the "exploitation" of soil resources cycle after cycle, combined with premature harvesting, not only causes soil erosion and affects the ecological environment but also reduces economic efficiency.

Mr. Trung Anh analyzed that the average production cycle for a batch of acacia for local residents is about six years. The investment for each hectare is around 15 million VND(depending on the terrain and planting techniques of each region and household). With the current acacia price of 70 million VNDper hectare purchased by traders, after deducting costs, farmers profit about 55 million VNDper hectare over six years (equivalent to over 9 million VNDper hectare per year). In contrast, the large-timber acacia forest managed by HFSC requires an investment cost of about 40 million VNDper hectare. After nine years of harvesting, the purchase price is certain to reach over 200 million VNDper hectare. After deducting costs, the profit gained is 160 million VNDover nine years (equivalent to nearly 18 million VNDper hectare per year).

Thus, by producing large-timber forests according to FSC standards, forest owners not only increase economic efficiency but also save investment capital, reduce labor, prevent erosion and landslides, and protect groundwater and the ecological environment. The challenge lies in the fact that local people are accustomed to a "short-term gain" production mindset, meaning that changing habits and awareness about the value of large-timber forests requires significant support from all levels of government.

Carbon sequestration - the inevitable trend

Amid increasing climate change, the world in general, and Vietnam in particular, is prioritizing forest protection and enriching forest ecosystems. In the western communes of Ha Tinh Province, such as Son Kim 1, Son Kim 2, Son Tay, Son Hong, and Son Giang, over the past decade, with the strong support of the Tay Kim Forest Certification Cooperative Union, acacia hills previously harvested for short-term gains have been nurtured for 7 - 8 years into FSC-standard large-timber forests.

Mr. Vo Van Bien, Director of the Cooperative Union, shared that in 2017, after completing the organizational structure, the Tay Kim Forest Certification Cooperative Union began training hundreds of households in the three communes of Son Kim 1, Son Linh, and Son Hong (formerly Huong Son District) on the importance of sustainable forest management. As a result, by the end of 2018, the lush green acacia hills, with diameters of 70–80 cm, on the Truong Son mountain range in Son Hong and Son Linh Communes, were granted FSC forest certification by the GFA Certification Body.

"After more than eight years of efforts to change the awareness of forest growers, we now have over 6,100 hectares of FSC-certified forests, including 4,700 hectares of production plantation forest and over 1,400 hectares of natural forest. Anticipating the opportunity to commercialize carbon credits, the Cooperative Union hired experts to measure and announced that 978 hectares of natural forest belonging to 160 households in Son Kim 2, Son Tay, and Son Hong Communes store 7,500 tons of carbon per year”,  Mr. Bien enthusiastically shared.

According to Mr. Vo Van Bien, with the two levels of government commencing operations this year, the Cooperative Union is confident that the expansion of FSC-certified areas and subsequent carbon sequestration efforts will achieve even more positive results. "In the immediate future, in 2025, we will focus on hiring experts to survey and calculate the carbon stock of 850 hectares of natural forest in Son Kim 2, Son Tay, and Son Hong Communes, and then expand the area in other regions”,  Mr. Bien stated.