Vientiane, Lao PDR, May 13, 2024 – The Ministry of Natural Resources and Environment of Lao PDR, the Global Green Growth Institute (GGGI) and the Government of Australia held a multi-stakeholder consultation on the Decree on Carbon Credits in Lao PDR. The event brought together representatives from development partners, non-governmental organizations, and private sector entities with interest in the benefits of carbon credits and markets to support Lao PDR set in the Nationally Determined Contributions and global climate ambitions.

The Government of Lao PDR has been working since October 2023 to prepare a Decree on Carbon Credits, following the Prime Minister’s instructions to regulate their management and trade in Lao PDR. GGGI provides technical assistance to the Government of Lao PDR under the Program for Open and Sustainable Carbon Markets, financed by the Government of Australia.

His Excellency Mr. Phouvong Luangxaysana, Deputy Minister of Natural Resources and the Environment, opened the workshop by saying that “the Decree on Carbon Credits is an important legislation and Lao PDR can gain benefits from participating in carbon trading through promoting investments that can achieve emission reduction or sequestration that can generate and sell carbon credits.” He further highlighted that “Lao PDR will be able to centralize and ensure the transparency and management of carbon trading system, which can be critical tools for the Government to manage the domestic and international carbon trading effectively in the future”.

Mr. Dan Heldon, Deputy Ambassador of Australia to Lao PDR, emphasized “the critical role played by this multi-stakeholder consultation to ensure the Decree is well aligned with international standards and allows for high-quality carbon trading that delivers real and verified emissions reductions.”

The Director General of Climate Change, Mr. Syamphone Sengchandala, presented the process for the formulation of the Decree on Carbon Credits, which was first prepared by MoNRE in March 2024 and was followed by internal consultations and discussions with three key sectors in all 18 provinces in April 2024. Inputs received led to the preparation of a second draft.

Mr. Bounlath Vorachit, Deputy Director General of the Cabinet Office, MoNRE, presented the content of the current draft, which contains a total of 47 articles in 12 chapters. The draft regulates types of carbon credit trading activity; the registration requirements and approval process; the benefit-sharing mechanisms; fees, and taxation mechanisms; as well as the rights, responsibilities, and obligations of project developers and Government agencies at central and local levels.

The consultation addressed issues around processes for the registration and management of carbon projects, the rights and responsibilities of project owners, and the alignment of the current Decree with the Paris Agreement.

Mr. Rowan Fraser, Country Representative for GGGI, noted that “once the decree is in place we hope that it can facilitate Lao PDR’s ability to participate in international carbon markets, including through bilateral cooperation with buyer countries, under the Paris Agreement.”

The inputs collected during the multi-stakeholder consultation will be used to further improve the draft Decree. MoNRE is planning to hold additional working sessions with members of the drafting committee and aims to finalize the Decree on Carbon Credits by June 2024.