KUCHING: Vietnam’s forestry sector has achieved a significant milestone in 2023 with the sale for the first time 10.3 million forest carbon credits (10.3 million tonnes of CO2) through the World Bank for US$51.5 million.
The figure was given by Vietnam’s Deputy Minister of Agriculture and Rural Development Nguyen Quoc Tri, reported International Tropical Timber Organisation (ITTO) in its Tropical Timber Market Report (February 1-15, 2024).
The sale of the carbon credits was part of the Emission Reductions Payment Agreements (ERPA) in the North Central region signed between the International Bank for Reconstruction and Development and Vietnam’s Ministry of Agriculture and Rural Development in 2020.
In early August 2023, the World Bank paid the first ERPA instalment of US$41.2 million or 80 per cent of the contract sum to the ministry. The balance will be paid after the transfer of the carbon credits.
The Vietnam Forest Protection and Development Fund, said the ITTO report, has received and disbursed all the first payments so that the six North Central provinces can make payment plans to forest owners.
“In addition to the number of carbon credits sold, the World Bank has confirmed the emission reduction results of the entire North Central region for the period January 2018-December 2019 amounts to 16.21 million tonnes of CO2 (equivalent to 16.21 million credits).
Nguyen has described 2023 as a tough year for Vietnam’s forestry industry because of supply and demand chain disruptions, logistics problems and bad weather conditions.
However, he acknowledged the sector’s efforts to overcome the difficulties in the past year to achieve remarkable results.
In 2024, Nguyen suggests the forestry industry promptly issues policies and mechanisms to facilitate its development.
Vietnam planted about 250,000 hectares of forests in 2023, surpassing the yearly plan by two per cent, according to the country’s Administration of Forestry. The forest coverage rate was 42.02 per cent, matching the target.
For the year under review, the total revenue Vietnam recorded from all forest environmental services reached more than US$169 million.
The ITTO report said in January 2024, Vietnam’s wood and wood product (W&WP) exports are forecast to be worth US$1.25 billion, down almost seven per cent from December 2023 but up 55 per cent as compared to January 2023.
In particular, WP exports contributed US$889 million (-7% from December 2023 but + 81% from January 2023). The big difference in year-on-year export revenue is explained mainly due to the Lunar New Year holidays that slowed export transactions in January 2022.
In December 2023, Vietnam imported 370,800 cubic metres (cu m) of logs and sawnwood valued at US$121.6 million, down 12 per cent in both volume and value compared to the previous month of November. As compared to December 2022, the import volume and value fell by 16 per cent and 23 per cent respectively.
Overall in 2023, Vietnam imported 4.44 million cu m of logs and sawnwood for US$1.51 billion, and this was a decline of 26 per cent in volume and 34 per cent in value against that of 2022.
“It is estimated that in January 2024, (Vietnam) exports of wood and wood products will reach US$1.4 billion, up 5% compared to December 2023 and up 75% compared to January 2023. In particular, the exports of wood products is estimated at US$924 million, down 3% compared to December 2023 but up 87% compared to January 2023.
“In January 2024, wood furniture exports were valued at US$884 million, up 5% compared to December 2023 and double that in January 2023.
“W&WP exports to the EU market in January 2024 earned about US$63 million, down 6% compared to December 2023 but up 5% compared to January 2023. W&WP exports to the US in January 2024 earned US$781 million, up 5% compared to December 2023 and up 15% compared to January 2023,” added the report.
On imports, Vietnam purchased 522,010 cu m of logs and sawnwood worth US$223.6 million from the US in 2023, and this was a decline of 12 per cent in volume and 27 per cent in value as compared to that of 2022.
Last year, Vietnam paid US$281.8 million in the imports of 720,060 cu m of raw wood from Africa, and this was down 46 per cent in volume and 43 per cent in value against that of 2022.
