The European Parliament's official adoption of its negotiating position on expanding the Carbon Border Adjustment Mechanism (CBAM) is sending a powerful wave of impact through exporters worldwide. No longer limited to raw-material industries, the new rules will directly “knock on the door” of downstream manufacturing businesses in Vietnam.
- Key Changes in the Expanded CBAM Regulation
The European Parliament voted by an overwhelming majority of 464 votes in favour (50 against, 159 abstentions), officially paving the way for trilogue negotiations with the Council. The notable amendments include:
- Scope expanded to 457 product groups: The list of affected goods is 2.5 times larger than the original proposal. CBAM officially extends to downstream products containing steel and aluminium such as screws and bolts, metal wire, springs, household appliances, steel structures, pipes…
- Tighter anti-circumvention rules: The EU lowers the threshold for identifying “minor modifications” used to circumvent the rules. Where systematic violations are detected, the European Commission may apply very high Default Values for emissions by country of origin.
- A temporary Decarbonisation Fund (2027–2029): Instead of an “emergency safety valve”, the EU is setting up a fund to help EU domestic businesses accelerate their green transition.
- Additional exemptions: Exemptions apply to electricity from outside the EU where necessary to stabilise the grid.
- How Will the Expanded CBAM Affect Vietnamese Businesses?
This policy change in the EU market poses direct and urgent challenges for Vietnamese exporters:
- Broad pressure on mechanical engineering & supporting industries: Manufacturers of components, spare parts and household goods containing steel/aluminium that were previously outside CBAM must now comply.
- Higher costs without actual emissions data: If a business cannot calculate and provide transparent emissions data (Scope 1, Scope 2) per unit of product (PCF), the EU will apply high default emission values. This significantly increases carbon certificate costs and erodes price competitiveness.
- Risk of OEM/ODM supply chain disruption: EU importers will prioritise restructuring their supply chains, choosing to work with suppliers that already have green data infrastructure in place.
- A widening technology gap: Support from the Decarbonisation Fund (2027–2029) will help EU businesses accelerate their greening, creating higher standards barriers for suppliers from developing countries.
- VietESG – Helping Businesses Take the Lead in the Green Wave
To turn the CBAM challenge into a competitive opportunity, VietESG offers a comprehensive ecosystem of Technology, Strategic Advisory and Training solutions, helping businesses standardise data and optimise operations:
📱 CBAM Module Integrated on the Vietesg.com Platform (Technology Solution)
- Automated emissions calculation: Helps mechanical engineering and supporting-industry businesses automate the calculation of Scope 1 & Scope 2 emissions by product line (PCF).
- Standardised data management: A transparent storage system, ready to export reports to meet data verification requests from EU importers.
📊 Strategic Advisory & “CBAM Readiness” Assessment
- HS Code review: Detailed mapping of the company's product portfolio against the 457 new CBAM product groups to determine the level of risk.
- Developing a Decarbonization Roadmap: Advice on optimising energy efficiency, switching to renewable energy and reducing the carbon intensity of production.
- International-standard ESG reporting advisory: Guidance on preparing integrated GRI/IFRS reports, enhancing credibility with trade finance banks and international investors.
🎓 In-Depth Training & Capacity Building Programmes
- In-house training for factories: Transferring GHG inventory and carbon data management methods to production management, R&D and import-export teams.
👉 Is your business ready for the expanded CBAM list?
Contact VietESG today for expert advice on the most suitable assessment and green transition roadmap!
- 🌐 Website: vietesg.com
- ✉️ Email: quynhhoa@vietesg.com
- 📞 Hotline: 0977064965
