Date of publication: 15/01/2026
Category: International Policy & Legal Affairs
Prepared by: ESG Expert Team – Carbon Credit Viet Nam Joint Stock Company
01/01/2026 marks a historic milestone in international trade as the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) officially transitions from its transitional phase (data reporting) to full operation (financial obligations).
This change is not merely a matter of customs procedure but a cost shock for businesses exporting to the EU. With CBAM certificate prices pegged to the EU ETS market (currently around €85/tonne CO₂), Vietnam’s energy-intensive industries such as steel, cement, aluminium and fertilizers are facing unprecedented challenges to their price competitiveness.
1. CONTEXT: THE END OF THE “FREE TRIAL” PERIOD, THE START OF “PAYING REAL MONEY”
After a three-year run-up (2023–2025) during which requirements were limited to reporting emission volumes, the “green gate” into the European market has officially closed on high-emission goods.
According to the latest data from the European Commission (EC), in just the first week of the financial mechanism’s operation (01–07/01/2026), the EU customs system recorded more than 10,400 CBAM declarations automatically validated, corresponding to 1.66 million tonnes of goods. This figure reflects the intensive preparation by EU importers and the pressure bearing down on global supply chains.
How the new mechanism works:
- EU importers (Authorized CBAM Declarants) importing more than 50 tonnes of CBAM-listed goods per year are required to purchase “CBAM certificates”.
- The number of certificates to be purchased corresponds to the volume of greenhouse gas (GHG) emissions “embedded” in the imported products.
- The certificate price is calculated based on the weekly average price of allowances on the EU Emissions Trading System (EU ETS).
2. THE FINANCIAL BURDEN: A COST EQUATION FOR VIETNAMESE BUSINESSES
Pressure from European carbon prices
As of December 2025, the average price of EU Allowances (EUA) reached €84.95/tonne CO₂, up 25% year-on-year as the EU tightened its internal emissions cap.
This means that if one tonne of steel exported from Vietnam emits 2 tonnes of CO₂, and the business cannot prove it has paid a carbon price in Vietnam (Vietnam does not yet operate an official carbon market), the EU importer must pay an additional €170 (~VND 4.5 million) for each tonne of that steel. This cost will inevitably be negotiated back onto Vietnamese producers or erode the competitiveness of Vietnamese goods against rivals that have already greened their production.
The risk of “Default Values”
A major legal risk that many Vietnamese businesses have not fully anticipated is the lack of actual data.
- If a Vietnamese business cannot provide verified actual emissions data.
- The EU will apply default values. These are the average emission levels of the worst-performing 10% of plants in the exporting country, or the EU’s worst average level.
- According to calculations, these default levels are typically 10–30% higher than actual emissions, causing the carbon tax costs borne by businesses to surge unfairly.
3. SECTORAL IMPACTS AND RESPONSE STRATEGIES
Sectors most critically affected
In Vietnam, the 4 industry groups bearing the most direct and severe impact are:
- Iron and steel: A sector with high emission intensity and large export turnover to the EU.
- Cement: Although exports to the EU are not yet as large as steel, the CBAM barrier all but closes this market without green technology.
- Aluminium: Both direct emissions and indirect emissions from electricity consumption must be taken into account.
- Fertilizers: Especially nitrogen-based and compound fertilizer groups.
An action strategy for Vietnamese businesses
To maintain their position in the global supply chain, the ESG Expert Team recommends a 3-step roadmap for businesses:
Step 1: Establish an internationally standardized MRV system (Immediately)
- Abandon manual estimation. Businesses need a Measurement, Reporting and Verification (MRV) system in line with the ISO 14064 standard.
- Data must be ready to share with EU importers at any time. A lack of data means accepting the highest punitive tax rate.
Step 2: Optimize production processes (Short term)
- Conduct energy audits to cut waste.
- Switch to renewable energy sources (rooftop solar power, purchasing I-REC certificates) to reduce indirect emissions (Scope 2), which is particularly important for the aluminium industry and steel producers using electric furnaces.
Step 3: Restructure the value chain (Long term)
- Research and adopt breakthrough technologies such as green hydrogen in metallurgy, or CCUS (carbon capture, utilization and storage) in cement production.
- Proactively explore domestic carbon credit markets (with the pilot launching in August 2025) to establish a basis for tax deductions when exporting to the EU.
4. CONCLUSION AND RECOMMENDATIONS
CBAM is no longer a “future threat” but a “present cost”. The shift of capital flows and orders will happen very quickly in 2026. European buyers will prioritize low-carbon suppliers to reduce their own CBAM compliance costs.
Vietnamese businesses are standing at a crossroads: either accept losing market share to competitors that made the green transition earlier, or treat CBAM as a driving force to upgrade technology, reposition their brand as a “green manufacturer” and capture higher-end segments in this demanding market.
“Today’s compliance cost is the passport to tomorrow’s prosperity.”
About us: This report was prepared by the ESG Strategy & Policy Team of Carbon Credit Viet Nam Joint Stock Company. We provide comprehensive consulting solutions on Greenhouse Gas Inventories, Net Zero Roadmaps and CBAM Compliance for manufacturing businesses.
For detailed advice on the impact of CBAM on your company’s specific product portfolio, please contact our support department.
