Erex Eyes Carbon Credits From Vietnam Biomass Co-Firing

Why It Matters

The project creates a new revenue stream for Erex while helping Vietnam reduce coal‑intensity, illustrating how cross‑border carbon‑credit mechanisms can accelerate renewable integration in coal‑dependent markets.

Key Takeaways

• Erex targets 92,000 t/yr carbon credits by FY2028
• Co‑firing starts FY2027‑28 at 110 MW Na Duong and 115 MW Cao Ngan
• Credits represent ~50% of each plant’s emissions
• Erex aims to expand to six Vinacomin plants, 1,585 MW total
• Project supports Vietnam’s net‑zero and 10% annual power growth

Pulse Analysis

The joint crediting mechanism (JCM) between Japan and Vietnam is gaining traction as developers like Erex seek to monetize emissions reductions from biomass co‑firing. By blending wood chips and pellets with coal, the two pilot plants can cut CO₂ output while maintaining reliable baseload power. This approach offers a pragmatic bridge for Vietnam, which still relies on coal for roughly half its electricity, and provides Japanese firms with a pipeline of verified carbon credits for domestic compliance markets.

Erex’s strategy hinges on securing roughly half of each plant’s emissions—about 45,000 t from Na Duong and 47,000 t from Cao Ngan—once commercial operations commence in FY2027‑28. The company’s trial runs, which achieved up to 30% biomass substitution, demonstrate technical feasibility and set a template for scaling to larger facilities such as the 670 MW Cam Pha plant. If successful, the expanded portfolio of six Vinacomin sites, totaling 1,585 MW, could generate upwards of 300,000 t of CO₂e credits annually, reshaping the economics of Vietnam’s coal fleet.

Beyond the immediate financial upside, the initiative aligns with Vietnam’s aggressive net‑zero roadmap and its 10% yearly electricity demand growth. By integrating locally sourced biomass, the projects reduce import dependence and create new supply chains for wood residues. For Japanese investors, the credits offer a dual benefit: meeting domestic carbon‑pricing obligations and diversifying exposure to emerging Southeast Asian clean‑energy markets. The Erex‑Vinacomin partnership thus exemplifies how cross‑border carbon‑credit schemes can drive decarbonisation while delivering tangible business value.