On 22 October 2020, the Ministry of Agriculture and Rural Development (now the Ministry of Agriculture and Environment) and the International Bank for Reconstruction and Development (IBRD), as trustee of the Forest Carbon Partnership Facility (FCPF), signed the Emission Reductions Payment Agreement (ERPA) for the North Central region. Viet Nam transferred 10.3 million tonnes of CO₂ in forest emission reductions for 2018–2024, valued at USD 51.5 million.
Legal basis and payment arrangements
- Government Decree No. 107/2022/ND-CP of 28 December 2022 regulates the pilot transfer of emission reduction results and the financial management of the North Central ERPA.
- ERPA revenue is managed as forest environmental service revenue. The Viet Nam Forest Protection and Development Fund receives it and allocates it to provincial funds, which pay forest owners and communities managing and protecting natural forests.
- The programme covers six provinces as defined before the 2025 administrative reorganisation: Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri and Thua Thien Hue.
- According to reports at the end of 2023, the first payment of USD 41.2 million covered 80% of the agreed emission reductions, with the balance payable after the transfer is completed. About 95% of the transferred emission reductions are passed back by IBRD to Viet Nam to count towards its Nationally Determined Contribution (NDC).
- On 29 August 2025, the Government approved the transfer of a further 1 million tonnes of CO₂ from surplus 2018–2019 emission reductions to IBRD.
Lessons for forest carbon programmes
The ERPA is Viet Nam's first jurisdictional results-based payment programme. Experience points to three key conditions: credible measurement, reporting and verification (MRV) data; a clear, transparent benefit-sharing plan developed with communities, including ethnic minority communities living near forests; and a grievance mechanism that works in practice. These are also requirements of the World Bank environmental and social safeguards applied to the programme. As the domestic carbon market becomes operational, they will remain the foundation for forest carbon credit projects.