CBAM – A New Doorway or a New Barrier for Vietnamese Goods Entering the European Market?

In recent years, the green transition is no longer just a directional slogan but has become the new rule of global trade. For the European Union (EU), the commitment to carbon neutrality is not only implemented within the bloc but is also extended across external supply chains through the deployment of CBAM – the Carbon Border Adjustment Mechanism.

CBAM marks an important turning point: for the first time, carbon emissions become part of the cost structure of exported goods. This is particularly significant for developing countries, including Vietnam, where many industries still depend on fossil energy and outdated technologies.

In essence, CBAM requires imported goods entering the EU to bear a carbon cost equivalent to that of goods produced in Europe. The mechanism aims to prevent “carbon leakage,” protect the EU’s internal decarbonization efforts, and encourage trading partners to participate in the green transition. In other words, the EU no longer accepts “low-priced” products that are created at a high environmental cost.

In its initial phase, CBAM focuses on emission-intensive sectors such as steel, aluminum, cement, fertilizers, electricity, and hydrogen. For Vietnam, steel and aluminum are the two most directly affected sectors, especially as exports to the EU remain an important channel for many businesses.

From 2023 to the end of 2025, CBAM is in a transitional phase. During this period, companies are not yet required to pay for carbon emissions but must fully declare emissions data associated with each export shipment. This serves as the EU’s first “filter.” Businesses without proper data, or those unable to verify emission sources, will be assigned the highest default emission values — meaning a significant disadvantage when moving into the next phase.

From January 1, 2026, CBAM will begin to create real financial impacts. EU importers will then have to purchase CBAM certificates corresponding to the emissions embedded in imported goods. The higher the emissions, the higher the cost; the higher the cost, the lower the competitiveness of the goods. In an increasingly demanding EU market, this gap may determine whether a company retains or loses its customers.

CBAM therefore presents Vietnamese businesses with a clear choice. Without preparation, companies risk being excluded from the EU supply chain or can only continue exporting with increasingly thinner profit margins. Conversely, if they adapt proactively, CBAM opens a new opportunity: the chance to upgrade production standards, enhance transparency, and integrate more deeply into the global green supply chain.

Preparing for CBAM does not necessarily require massive upfront investments. The first crucial step is correctly identifying risks, understanding whether products fall under CBAM scope, and beginning to build a systematic emissions data system. Increasing information transparency, standardizing processes for measuring – reporting – and verifying emissions, gradually improving energy efficiency, and increasing the share of clean recycled materials are all practical and feasible steps.

It should also be recognized that the upgrading of the EU–Vietnam partnership does not mean CBAM will be relaxed or exempted. CBAM is a globally applied mechanism. However, a strategic partnership facilitates policy dialogue, technical support, and experience sharing, helping Vietnamese businesses adapt more quickly and reduce transition shocks.

For the metal recycling sector, CBAM could even become a strategic lever. If well organized, Vietnam could position itself as a supplier of low-carbon recycled metals, meeting the rising demand of the European market. In this case, recycling is not only an environmental solution but also a competitive advantage.

CBAM is not a barrier erected to shut the EU market. It is a conditional invitation: those willing to be transparent, ready to change, and prepared to move with the green trend will continue to stay and grow. Businesses that adapt too slowly will be left behind — not because the EU is strict, but because the rules of the game have changed.

In this context, the question is no longer whether CBAM will have an impact, but whether Vietnamese businesses will step through the CBAM door in a passive or proactive stance. Preparations made today will determine a company’s position in the European market for many years to come.

Source: Collected from the internet