North Central carbon credits: Plans in place, funds must hand final beneficiaries

At a meeting on the morning of September 15 with Deputy Minister Nguyen Quoc Tri, the Department of Forestry and Forest Protection, along with other units under the Ministry of Agriculture and Environment, Mr. Le Van Thanh - Deputy Director of the Vietnam Forest Protection and Development Fund - announced that about 1 million carbon credits are about to be transferred to the North Central region under the ERPA.

It is expected that in 2025, the World Bank will disburse the majority of this amount, 5 million USD (around 131 billion VND) from the additional transfer. Of this, more than 126 billion VND will be allocated to five North Central provinces.

The new funding will continue to be used to ensure environmental and social safeguards, similar to the 51.5 million USD transferred since 2023. This includes forest protection contracts, community livelihood support, construction and implementation of silvicultural projects and measures, as well as communication and training activities.

This serves not only as motivation and encouragement for those engaged in forest protection and development, but also as a challenge to ensure the funds are managed transparently and effectively.

According to Mr. Thanh, after three years of ERPA disbursement, all five North Central provinces have now approved their financial plans. Most of the funds have already reached forest owners. However, some issues remain to be resolved. For example, the merger of Quang Binh into Quang Tri has complicated the identification of forest areas and beneficiaries, which still requires verification and review.

In cases where forest owners are organizations, they must seek additional approval from management boards and update forest status before distributing funds to the final beneficiaries, who are contracted to protect forests.

Mr. Tran Quang Bao, General Director of the Department of Forestry and Forest Protection, acknowledged that some provinces encountered difficulties allocating ERPA funds. In some instances, large sums have not yet been assigned to specific beneficiaries.

To address this, he proposed that the Vietnam Forest Protection and Development Fund work closely with the five provinces involved, while allowing flexibility in allocation. He noted that, in addition to supporting communities and individuals directly protecting forests, provincial funds could also invest in silvicultural works delivering immediate practical benefits while laying the foundation for sustainable development in the future.

Deputy Minister Nguyen Quoc Tri emphasized that the allocation and payment of emission reduction results must be carefully discussed and definitively resolved within the next year, with full compliance to Decree 107/2022/NĐ-CP.

“Despite many pending issues, ERPA funds must still be decisively implemented, with the ultimate goal of supporting local people and ensuring their livelihoods,” he stressed, requesting a thorough review of each province and every expenditure from the 51.5 million USD fund.

The Vietnam Forest Protection and Development Fund must conduct on-site inspections, ensuring that payments truly reach their final beneficiaries, identifying how many organizations and households have received funds, and clarifying the timeline. The general principle is that forest owners who are households receive direct payments, while payments to organizations must follow a clear mechanism that ensures fairness.

Regarding the new 5 million USD package, Deputy Minister Nguyen Quoc Tri instructed the Department of Forestry and Forest Protection to first hold an online meeting with provincial Departments of Agriculture and Environment, together with the Forest Protection and Development Fund, to discuss distribution plans.

Each locality must clearly state whether the allocated funds can be disbursed and within what timeframe. Only then will the Ministry issue an official decision to finalize the plan. “We are moving forward while learning along the way, building on the experience from the previous ERPA disbursement,” he said.

To meet the reporting deadline for the Prime Minister and the Government, the Deputy Minister assigned the Forest Protection and Development Fund to send five staff members to the provinces to gather actual data and accelerate disbursements so that funds reach the final beneficiaries. If necessary, individual forest owners may be invited for direct discussions.

At the same time, the 51.5 million USD disbursement must be reviewed and evaluated after three years of implementation. This includes identifying provinces that received funds but have not yet disbursed them and setting clear timelines for delivery to the final beneficiaries. He requested a detailed report by October 30.

“The true measure of effective disbursement is that funds must reach the people directly, without being held at any intermediary level. Payments for forest protection contracts must be fully disbursed, while silvicultural measures may extend from one to three years depending on circumstances, but all must ensure transparency,” the Deputy Minister concluded.