Currently, the CBAM report meeting standards is not only a mandatory requirement from EU clients but also a decisive condition for the acceptance of Vietnamese export shipments in this market in the future.

CBAM will officially come into effect in 2026, posing a significant challenge for Vietnamese exporters, particularly in six key sectors: steel, aluminum, cement, chemicals, electricity, and hydrogen. 

Exploring the CBAM report

What is CBAM?

CBAM, or the Carbon Border Adjustment Mechanism, is a policy under the European Green Deal.

Essentially, CBAM will impose carbon taxes on goods imported into the EU based on the greenhouse gas emissions produced during manufacturing in the exporting country.

While the goal of CBAM is to prevent carbon leakage, this regulation also aims to encourage producers from third countries to control and reduce greenhouse gas emissions more effectively. 

What is CBAM?

Does CBAM affect Vietnamese enterprises?

Although Vietnam ranks as the 11th partner in goods imported into the EU, in the initial stage, CBAM will focus on goods with the highest risk of carbon leakage: cement, iron, steel, aluminum, fertilizers, hydrogen, and electricity, accounting for up to 94% of the EU’s industrial emissions.

Vietnamese enterprises may face substantial carbon taxes due to high emissions, elevated production energy costs, and low renewable energy usage.

 

How does CBAM impact Vietnamese companies?

- The steel sector could see a reduction of approximately 4% in export value (around 0.8% decrease)

- The aluminum industry may decrease by over 4% in export value (approximately 0.4% reduction).

How does CBAM impact Vietnamese enterprises?

According to the Technical Assistance Project on CBAM impact assessment, while the importers in Europe are responsible for reporting and bearing CBAM fees, they will also require Vietnamese enterprises to provide information on emissions and costs related to domestic carbon pricing. 

 

What solutions exist for Vietnamese enterprises?

CBAM is a significant policy that could considerably impact the business operations of Vietnamese companies exporting to the EU. Enterprises must proactively seek understanding, devise carbon reduction strategies, construct reports, and effectively monitor emissions in production to enhance their competitiveness in the international market. 

Solutions exist for Vietnamese enterprises

 

The extent of CBAM's future impact?

By 2025 (the transition phase of the mechanism), CBAM may expand to include more products and services, including “indirect emissions” (carbon emissions from using electricity to produce goods).

In 2026, importers of goods subject to CBAM regulations in the EU will be required to purchase CBAM certificates. 

The extent of CBAM's impact in the future

Three misconceptions about the Carbon Border Adjustment Mechanism (CBAM)

CBAM, or the Carbon Border Adjustment Mechanism, is a policy under the European Green Deal.

Essentially, CBAM will impose carbon taxes on goods imported into the EU based on the greenhouse gas emissions incurred during production in the exporting country. Therefore, a thorough and accurate understanding of CBAM is crucial for Vietnamese enterprises, especially those participating in the global supply chain.

So, are you holding any misconceptions regarding the CBAM mechanism?

Is CBAM a carbon tax?

• In reality, CBAM is a border adjustment mechanism designed to encourage nations to reduce emissions and promote green production.

Will CBAM apply to all Vietnamese export items to the EU?

• CBAM will be applicable only to certain specific goods imported from six main sectors: iron and steel, cement, aluminum, hydrogen, fertilizers, and electricity.

Does CBAM have a significant impact on the Vietnamese economy?

• Although Vietnam exports numerous goods to the EU, these are primarily telecommunications equipment, electronics, footwear, textiles, and furniture. Goods from sectors affected by CBAM are relatively limited, accounting for around 8% of total export value, primarily cement, iron, and steel. 

 

Consulting services - CBAM reporting by MinMax Green

MinMax Green is currently a specialized provider of comprehensive solutions for greenhouse gas (GHG) emissions management, CBAM, and environmental and social issues (ESG).

With a team of experienced experts, MinMax Green will accompany clients and European partners throughout the CBAM reporting process. Simultaneously, we collaborate with businesses to present effective solutions for measuring, quantifying, and mitigating carbon emissions within their operations. We are committed to supporting enterprises in their journey towards sustainable development in the present and future.

If your company is facing challenges regarding CBAM reporting, please contact us immediately for prompt advice and support.