Carbon financing and how Biogas Program in Vietnam joined the voluntary market

Updated 10:50' 12/21/2015
Illustrative photo
After a long learning process the Biogas Program in Vietnam decided to pursue registration with the Voluntary market, and reached this successfully in 2012. There are several credit types used worldwide and BPD decided to register with the Gold Standard, which is seen as the most common one. Early 2013 they had their first issuance of such credits and BPD is in the process, together with NEXUS carbon for development, to sell these credits to the voluntary market.


After a long learning process the Biogas Program in Vietnam decided to pursue registration with the Voluntary market, and reached this successfully in 2012. There are several credit types used worldwide and BPD decided to register with the Gold Standard, which is seen as the most common one. Early 2013 they had their first issuance of such credits and BPD is in the process, together with NEXUS carbon for development, to sell these credits to the voluntary market.


Global warming is mainly caused by human activities according to most scientists, it means that the average temperature of the earth rises leading to consequences all over the world over the years such as rising of the seas, changes in weather patterns, higher intensity and frequency of hurricanes, more extreme weather. Greenhouse gases (like for example carbon dioxide (CO2), Methane (CH4) and Nitrous oxide (N2O, for example used in fertilizers)) released to the atmosphere traps the heat coming from the sun and prevents the heat to be released back into space. Therefore this heat is slowly warming the earth. Some of the main sources of GHG emission are the energy sector including transport (the electricity that we use on a daily basis, the car or motorbike we drive to work everyday) and the agricultural sector (methane from animal waste, rice cultivation).


Vietnam is one of the countries that is highly sensitive for these developments, as a rise in sea levels (for example) highly impacts the country with its long coastal line.


To act upon these recent developments developed (industrialized / non-Annex I countries) countries agreed together (in Kyoto, Japan in 1997) to reduce greenhouse gas emissions with about 5% between 2008 and 2012 (now extended to 2020) compared to the emissions in 1990. This agreement is called the Kyoto Protocol and is legally binding for the countries that signed. The first commitment period applies to emissions between 2008-2012, and the second commitment period applies to emissions between 2013-2020.


To help to achieve the new targets set, the protocol introduced three mechanisms: the international emissions trading (IET), joint implementation (JI), and the clean development Mechanism (CDM). CDM has twin objectives:

- Help developed countries (Annex I) meet their objectives in a cost-effective way;

- Contribute to sustainable development of the host country


Now developed countries (and industries within) have the following options to reach their new and lower emission targets:

1.    By investment in cleaner and more efficient technologies in their own country

2.    Reducing the consumption of GHG emitting products or services

3.    By purchasing“offsets” created by carbon credit projects

4.    Or pay the fines in case targets are not met


At the same time, while the compliance (CDM) market was developing an additional market came into existence, a voluntary market with voluntary credits (VER’s). This voluntary market accommodates companies and industries that are not by law forced to reduce their emissions, but want to reduce their emissions.


A Carbon Credit (CER’s or VER’s) is a unit that represents the reduction of one tonne of carbon dioxide equivalent (tCO2e). All Global Warming Potential (GWP) of greenhouse gases are expressed in tCO2e – for example 1 ton of Methane is 25tCO2eq.
(Source: http://biogas.org.vn/)