The Vietnam Carbon Credit Project (VCCP) is a pioneering initiative set up by a group of Gen Z individuals to provide services to generate and sell carbon credits through forest restoration and protection activities.

It aims to reduce CO2 emissions and create sustainable income for landowners while helping companies meet ESG standards, appearing to be potential amid increasing demand for carbon credits.

Carbon credits are certificates for every ton of CO2 reduced or removed from the atmosphere by organizations, individuals or companies. They play a crucial role in combating climate change by encouraging the reduction of greenhouse gas emissions. In Vietnam, the carbon credit market is thriving due to strong environmental protection policies and increasing demand for companies to meet ESG standards.

VCCP wins the consolation prize at the Capital's Innovation and Digital Transformation Products Competition 2024. Photo: Viet Anh

Optimizing technology, streamlining processes to maximize revenue

Speaking to The Hanoi Times, Quynh Anh, Head of Finance at VCCP, reveals that the project was inspired by the team's visit to the forest in the northern region of Vietnam. "Our founders saw its potential and wanted to develop a new forest-based product that could be integrated into the global market while providing a sustainable livelihood for local people."

According to Quang Minh, Head of Professional Affairs at VCCP, the demand for carbon credits is soaring globally as countries and companies seek to accumulate these credits for financial gain as well as to meet political and security goals, particularly the 2050 net zero target. As a result, the carbon credit market is expected to grow to US$1 trillion by 2030.

"There are still challenges in terms of economics, legality, and quality in carbon credit markets worldwide, especially in Vietnam. That's why VCCP was created to provide the most comprehensive solution at the lowest market cost to help forest owners generate and trade carbon credits," he added.

The project applies the most advanced technologies to reduce costs, increase productivity, and improve accuracy in each of its projects. Artificial intelligence (AI) and blockchain technology are also being used to increase transparency in monitoring and evaluating activities.

Automation and process optimization ensure high efficiency and reliability, while reducing labor costs and speeding up implementation, Quang Minh said. "As a result, the VCCP's output products are highly valued in the global market. The total order value of the project has now exceeded $15 million for the 2024-2028 timeframe alone."

VCCP members survey a reforestation project in Tan Vinh, Hoa Binh. Photo: Vietnam Carbon Credit Project

Overcoming challenges, aiming for long-term benefits

VCCP currently enjoys many advantages as carbon credits are a reasonable tool for emitters to compensate environmentalists. However, Quang Minh admitted that project members face many legal, financial and knowledge challenges as they are pioneers in the field.

One of the biggest challenges is access to and trading of carbon credits for small forest owners. The project aims to soon implement the tokenization of carbon credits to simplify business both domestically and internationally, although members acknowledge that there are still many challenges in converting tokens into currency for forest planters.

Quynh Anh said the project needs to raise about $20,000 to prepare for upcoming programs in 2025 and 2026 - the expected time for the first revenue to be generated. Although this is still a challenging issue, as carbon credit revenues are not yet generated domestically, the team has adopted a "short-term funding for long-term benefits" approach by raising funds from a variety of sources, particularly education. Currently, VCCP is working with the Maya Bilingual School and the True North International School in Hanoi to develop carbon credit courses for students.

Quynh Anh expressed that the project's utimate goal is to promote the image of a civilized, clean, and sustainably developed Vietnam along with creating a stable annual livelihood for the people while ensuring forest protection.

Carbon Credit Vietnam signs agreement with the Maya Bilingual School. Photo: Maya Bilingual School

Vietnam Carbon Credit Project will apply advanced technology, optimize processes, and seek capital to expand operations. It hopes to bring benefits to Vietnam's environment and sustainable economy with the right steps and community support.