Quantifying forest carbon value to unlock new revenue streams

Many localities are highly expecting to generate additional revenue from forest carbon after Decree 180/2026/ND-CP takes effect. However, before thinking about transactions or credits, the very first thing they must do is determine how much carbon their forests are sequestering, how much they can reduce emissions, and which parts are qualified to form a project.

Therefore, the first step is not to find partners to purchase credits, but to quantify the carbon value of each forest. According to the spirit of the Conference on disseminating Decree 180/2026/ND-CP held on the morning of July 2 by the Forestry and Forest Protection Department, the focus of implementation is gradually shifting toward preparing data, capacity, and procedures so that every unit of carbon generated can be measured, verified, and traded transparently.

Carbon credits can only be traded after undergoing multiple verification steps

Unlike traditional forestry products that can be determined by acreage or timber yield, carbon credits are only formed when it is proven that greenhouse gas emissions have been reduced or additional carbon has been sequestered according to recognized methodologies.

According to the implementation plan of Decree 180 announced by the Department, a forest carbon project must undergo a chain of procedures including project formulation, registration, Measurement - Reporting - Verification (MRV), determination of emission reduction or carbon sequestration results, and issuance of credits. It can only be exchanged or transferred after being confirmed by competent authorities.

Transactions can be executed through contracts or carbon trading platforms, and must concurrently guarantee that they do not affect the greenhouse gas emission reduction targets within the Nationally Determined Contributions (NDC).

This also means that the value of forests in the carbon market is no longer viewed merely through acreage or timber reserves, but is decided by the ability to prove the amount of carbon sequestered or emissions reduced.

"Each credit must be based on activity data, calculation methods, independent verification results, and a unified management process to avoid double counting, double trading, or the generation of non-quality-assured credits," shared Ms. Nghiem Phuong Thuy from the Department of Science, Technology and International Cooperation, Forestry and Forest Protection Department.

To serve this process, the Ministry of Agriculture and Environment is drafting a National Standard (TCVN) on forest carbon credits. The draft specifies requirements for carbon projects, methods for measuring and reporting carbon emissions and sequestration, requirements for appraisal and verification, as well as principles to guarantee environmental and social safety. This will serve as the technical basis to unify how domestic carbon credits are determined and verified, while creating a foundation for connecting with international standards.

This stringent process also explains why, after Decree 180 was promulgated, the focus of regulatory bodies is not to promote immediate transactions, but to build a data system, standards, and capacity so that the market operates on a verifiable foundation.

Localities requested to self-assess forest carbon potential

If carbon credits are formed from data, then localities are precisely where that data must be generated. Deputy Director of the Forestry and Forest Protection Department Pham Hong Luong stated that after the Ministry of Agriculture and Environment issues the implementation plan for Decree 180, localities need to promptly advise Provincial People's Committees to enact their own execution plans.

Along with that, they must organize the dissemination of regulations to each forest owner, diversify communication formats, and compile documents in a way that is easily accessible instead of purely using legal language.

According to him, this is an entirely new field; therefore, the demand for training, capacity building, database construction, access to technical assistance sources, and connection with development partners will spike in the coming time. These contents have all been integrated into the Ministry's implementation plan to support localities in preparing conditions for carbon projects.

One requirement particularly emphasized by Mr. Luong is that provinces need to proactively assess the current status and carbon sequestration potential of forests within their areas. Only when knowing clearly the amount of carbon currently held, the future sequestration capacity, and the achievable emission reductions can localities determine the project scale, the amount of credits likely to be formed, as well as the market development orientation in the coming years.

Regarding data infrastructure, the Deputy Director informed that the Ministry has included the task of building databases serving greenhouse gas inventories, monitoring forest dynamics, and determining carbon sequestration amounts into the implementation plan. Future results from forest investigations, inventories, and monitoring will not only serve resource management but also become the basis to determine reference levels and forest carbon sequestration amounts for each period.

Along with data, localities are also recommended to prepare human resources, project formulation capacity, and monitoring systems starting right now. This is because when the carbon market operates, deciding how many credits a forest can generate will not be based on expectations, but on figures that have been measured and verified.

"What needs to be avoided in the initial phase is that forest carbon should be viewed as a supplementary financial source," Mr. Luong emphasized. This cannot be a new "gold mine", but is a driver to help forest owners secure additional conditions to protect and develop forests and maintain sustainable management activities, alongside existing resources.

That is also the greatest significance of the implementation phase of Decree 180. Before forming a market or witnessing the first transactions, the more important task is to build a sufficiently reliable data system so that the carbon of each forest can be measured, verified, and quantified into economic value.

Only when knowing exactly how much carbon the forest is sequestering will localities truly know how much potential they hold in their hands to participate in the carbon market in the future.

Decree 180/2026/ND-CP comprehensively regulates forest carbon sequestration and storage services for the first time, creating a legal framework for the formation, management, and transaction of emission reduction results and forest carbon credits in Vietnam.

Activities such as forest protection, reducing deforestation, forest restoration, afforestation, forest enrichment, improving plantation productivity, and certain agroforestry models can generate emission reduction results or carbon credits if they satisfy requirements on project formulation, measurement, reporting, appraisal, and verification according to regulations.

The decree clearly regulates entities participating in supplying and utilizing forest carbon sequestration and storage services; principles for revenue management; transfer mechanisms via contracts or carbon trading platforms; and strictly requires all transactions to guarantee they do not affect the implementation of Vietnam's Nationally Determined Contributions (NDC).

For forests under public ownership, carbon revenues are prioritized for forest protection and development, supporting community livelihoods, formulating carbon projects, measurement, reporting, appraisal, and developing databases serving management. The decree comes into effect on July 15.