News

1. What is a carbon tax?

Carbon tax is a special type of environmental tax, levied on the amount of carbon dioxide (CO2) generated by production and consumption activities. When burned, carbon atoms in fossil materials such as coal, oil, gas, etc. are converted into CO2 gas - One of the factors causing global warming and affecting climate change. behind globally. Accordingly, the fundamental basis of imposing a carbon tax is to impose an additional cost for each ton of CO2 emitted into the atmosphere.

2. The role of carbon tax in reducing greenhouse gas emissions

The specific role of carbon tax is based on the following purposes:

An emissions pricing tool

Carbon taxes help countries around the world price emissions, preventing excessive energy exploitation, use and consumption. Thanks to that, many countries and international organizations have realized the importance of limiting the amount of greenhouse gases emitted into the environment.

An effective economic tool, contributing to generating revenue for the national budget

Carbon taxes generate significant budget resources for the country. Revenue contributes to the state budget, used to encourage green growth.

Promote the development of industries using renewable energy

A carbon tax on fossil fuel use increases energy costs. In the long term, entities are forced to innovate fuel use methods, move towards using alternative technologies and reduce dependence on fossil fuel sources. Countries are urged to transition to cleaner energy sources such as biomass fuel.

Achieve sustainable growth goals and prevent global warming

While a carbon tax may initially create financial pressure on fossil fuel industries, it also creates incentives for businesses to promote innovation to create economic breakthroughs. Transitioning to clean energy sources creates a sustainable economy. Ultimately, it reduces the amount of CO2 released into the environment, reduces climate change, and protects the living environment.

3. Carbon tax policy in some countries around the world

As of June 2021, according to the World Bank, 35 countries have applied carbon taxes, including the UK, France, Norway, Sweden, Finland, Japan, India, Singapore and several others. . The first country to implement a carbon tax was Finland in 1990. As of April 2021, the carbon tax rate in this country is up to 73.02 USD/ton of CO2.

Countries belonging to the European Union such as Denmark, France, Ireland, Portugal, Switzerland, and England also impose taxes. Sweden has the highest tax at $129.89 per ton of carbon emissions. Norway is 87.61 USD/ton CO2 and the lowest in Poland is 0.08 USD/ton CO2. Tax resources from EU governments are allocated to improve insurance for people or energy efficiency development programs.

Regionally, Asia-Pacific is currently leading the race to reduce global carbon emissions. Japan applies taxes to all fuels, except agriculture, forestry, air transport, railways, and maritime sectors with a tax rate of only 3 USD/ton of CO2.

4. Carbon tax policy in Vietnam

Vietnam is actively researching the carbon tax collection systems of countries around the world, recommending a number of contents that need to be focused on when developing a carbon tax suitable to the country's current conditions.

Solution for building a carbon tax collection system

According to experts, for carbon tax to play its full role when implemented in Vietnam, it is necessary to pay attention to the following contents:

• The carbon tax base must be designed appropriately.
• Regulating the first stage of bringing fossil fuels into the market.
• Carbon tax rates must ensure there is a balance between a carbon price high enough to reduce fossil fuel use and facilitate investment in low-carbon options. At the same time, limit major impacts on economic development.
• Carbon tax incentives minimize the regressive impact of taxes on vulnerable groups when carbon taxes are applied.
  It is necessary to add regulations on separating carbon tax and clearly stating that the purpose of using carbon tax money is for the field of environmental protection.
• Integrating the carbon tax into the environmental protection tax is considered a feasible option being considered.

Enterprises are proactive with the most suitable plan

Businesses are entering a sprint period to produce, reduce carbon emissions or carry out carbon credit exchange transactions. Even encountering barriers in export markets.

Therefore, businesses need to soon have green transformation solutions to cope with taxation. Green transformation in production should focus on reducing emissions during fuel consumption at the production stage.

Convert from fossil fuels to biomass 

The method of converting from fossil raw materials to biomass such as rice husks, firewood, industrial waste... is a current market trend suitable to conditions in Vietnam. However, this is a long road, requiring huge financial resources as well as business initiative, especially when carbon emission reduction regulations are still new.

Thuan Hai is implementing a long-term green transformation through the use of biomass raw materials to solve clean energy problems, optimize costs, and improve production efficiency. More specifically, with more than 10 factories supplying biomass materials, Thuan Hai has provided environmentally friendly raw materials with prices suitable for domestic and foreign markets.

5. Conclusion

Thus, carbon tax is an effective economic tool in promoting reduction of greenhouse gas emissions, preventing global warming and climate change globally. However, the application of carbon tax into practice needs to be effectively coordinated between the state and organizations and businesses.

Businesses need to have specific plans for appropriate steps to convert energy sources to adapt to the market, carbon tax requirements, as well as facilitate the green transformation orientation to contribute to promoting sustainable growth. and long term.