Adapting to the CBAM Mechanism: A Strategic Path for Manufacturing and Export Enterprises in Vietnam
Introduction to the Carbon Border Adjustment Mechanism (CBAM)
CBAM is the world’s first carbon border tax mechanism, introduced by the European Union (EU) to reduce global greenhouse gas (GHG) emissions. Its primary objective is to prevent "carbon leakage"—a phenomenon where companies relocate production to countries with less stringent emissions regulations, thereby increasing global emissions.
The initial phase of CBAM took effect on October 1, 2023, and is being piloted for high-emission sectors such as cement, fertilizers, iron and steel, aluminum, hydrogen, and electricity. The scope is expected to expand to additional sectors in the future.
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Requirements for EU Importers
- From October 1, 2023, to December 31, 2025, importers into the EU must submit quarterly reports disclosing the volume of imported goods and the associated GHG emissions—covering both direct and indirect emissions.
- Starting January 1, 2026, importers will be required to purchase CBAM certificates corresponding to the declared emissions. If carbon costs have already been paid in the country of origin, the tax may be adjusted to avoid double taxation.
Preparation for Export Enterprises
- Measure and report GHG emissions:
- Track the carbon footprint of products (especially iron, steel, and aluminum) and provide transparent data to EU importers.
- Set emission reduction targets:
- Identify emission hotspots and establish science-based targets aligned with the Science Based Targets initiative (SBTi).
- Implement emission reduction projects: Take concrete actions to reduce emissions across the entire supply chain.
Bureau Veritas Solutions
With over 190 years of global experience, Bureau Veritas offers comprehensive solutions to support Vietnamese enterprises in adapting to CBAM and enhancing their competitive edge:
- Guidance on developing product carbon footprint reports.
- Consulting on establishing GHG measurement and data management systems.
- Support in building carbon neutrality strategies and achieving Net-Zero targets.
- Verification, validation, and certification in accordance with international GHG management standards.