EVFTA gives Vietnamese steel and cement exporters near-zero EU tariffs. CBAM doesn't care. It's a separate, parallel mechanism — and if your mills ship iron, steel, cement or aluminium into the EU, the carbon cost applies on top of whatever tariff relief the trade agreement gives you. Here's exactly what changed in 2026 and what to do before your EU buyer asks.
Why EVFTA doesn't protect you from CBAM
The EU-Vietnam Free Trade Agreement, in force since August 2020, phases out tariffs on the overwhelming majority of EU-Vietnam trade, including most steel and cement lines. That has made the EU an increasingly attractive market for Vietnamese producers over the past several years.
CBAM is not a tariff, and EVFTA does not mention it. CBAM is a carbon-cost mechanism that sits alongside normal customs duties, charging importers for the embedded emissions in specific carbon-intensive goods — steel, aluminium, cement, fertilisers, hydrogen and electricity — no matter which country they come from or what trade agreement covers them. A Vietnamese steel coil entering the EU at 0% EVFTA duty still carries a CBAM obligation if it's above the exemption threshold. Several exporters we've spoken with initially assumed the free-trade agreement covered this — it doesn't, and that gap is exactly where unplanned costs show up in 2027.
What's covered, and how the 50-tonne exemption works
CBAM's definitive period began on 1 January 2026. The covered sectors are iron & steel, aluminium, cement, fertilisers, hydrogen and electricity. Under the 2025 CBAM Omnibus simplification, importers bringing 50 tonnes or less of CBAM-covered goods into the EU per calendar year (cumulative across all covered goods, not per shipment) are fully exempt — except for hydrogen and electricity, which don't benefit from the exemption.
Can you use Vietnam's own emissions data?
Vietnam already requires large emitting facilities — including steel and cement plants — to report greenhouse gas inventories under Decree 06/2022/ND-CP, part of the country's own path toward a domestic carbon market. That data is a genuinely useful starting point: it means many Vietnamese producers already track fuel, electricity and process emissions at a facility level.
It is not, however, a drop-in substitute for CBAM reporting. The EU's methodology (installation-level embedded emissions per tonne of product, following the CBAM implementing regulation) has specific boundary rules, emission factors and verification requirements that domestic GHG inventories weren't built for. In practice, this means reformatting and independently verifying existing data rather than starting from zero — which is faster and cheaper than building a monitoring system from scratch, but still requires a deliberate translation step.
What CBAM could cost a Vietnamese exporter
A CBAM certificate's price tracks the weekly average auction price of EU ETS allowances, in euros per tonne of CO₂ — recently trading broadly in the €70–€90 per tonne CO₂ range (illustrative; always check the current ETS price). The table below is a planning illustration, not a quote — your actual liability depends on verified embedded emissions per product line.
| Product line | Illustrative annual EU volume | Typical embedded emissions | Illustrative CBAM cost/yr |
|---|---|---|---|
| Hot-rolled steel coil | 3,000 t | ~1.9 t CO₂ / t steel | ≈ €456,000 |
| Portland/blended cement | 8,000 t | ~0.85 t CO₂ / t | ≈ €544,000 |
| Primary aluminium products | 400 t | ~8.0 t CO₂ / t (world avg) | ≈ €256,000 |
The single biggest lever on that number: verified actual emissions almost always beat the EU's conservative default values. Producers using cleaner electricity (Vietnam's grid mix is shifting toward renewables) or more efficient kilns typically have a real cost advantage over the default-value estimate — but only if it's documented and verifiable. Our free open-source CBAM calculator and default-value templates let you model both scenarios before committing to a methodology.
Your 2026 compliance timeline
- Now — confirm scope. Total your trailing-12-month EU-bound tonnage of steel, cement or aluminium. Above 50 t/year, cumulative? You're in scope.
- Q4 2026 — reconcile existing GHG data. If you already report under Decree 06/2022/ND-CP, map that data against CBAM's installation-level embedded-emissions methodology rather than starting a parallel exercise.
- Q4 2026 — independent verification. Have actual emissions verified so your EU importer isn't forced to fall back on the EU's higher default values.
- Q4 2026 — importer handover pack. Your EU importer (the CBAM declarant) files on your data — deliver it in the format they need, not just what's easiest for you to produce.
- Feb 2027 — declaration & certificates. The first annual declaration covers 2026 imports; certificate purchases open 1 February 2027.
Not sure where to start with Scope 1/2/3 fundamentals before layering CBAM on top? See our guide to calculating Scope 3 emissions as a manufacturer.
Get your Vietnamese mill's CBAM data EU-importer-ready
We convert Decree 06 and default-value data into verified actual emissions, build the importer handover pack, and set up quarterly monitoring — backed by €2.3M PI insurance and a TÜV-certified ISO 14001 auditor.
📅 Book a Free 30-Minute CBAM Strategy CallFrequently asked questions
Does EVFTA exempt Vietnamese exporters from CBAM?
No. EVFTA eliminates tariffs; CBAM is a separate carbon mechanism that applies to covered goods regardless of trade-agreement tariff status.
Are Vietnamese steel and cement exporters in CBAM scope?
Yes — iron & steel, aluminium, cement, fertilisers, hydrogen and electricity are covered sectors regardless of origin country. Shipments above the 50-tonne annual threshold carry obligations from the 2026 definitive period.
Can Vietnamese exporters use domestic emissions data for CBAM?
Decree 06/2022/ND-CP GHG inventory data is a useful starting point but isn't automatically CBAM-equivalent — it typically needs reformatting and independent verification against the EU methodology.
What is the CBAM 50-tonne exemption and does it help small Vietnamese exporters?
Importers bringing 50 tonnes or less of covered goods per year (cumulative, excluding hydrogen/electricity) are exempt. Most established commercial exporters will exceed this.
When do certificate payments actually start?
Purchases were postponed from January 2026 to 1 February 2027, covering 2026 imports retroactively — but verified data needs to be ready well before then.
Sources & further reading
- European Commission — Carbon Border Adjustment Mechanism (official): taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en
- European Commission — EU-Vietnam Free Trade Agreement (EVFTA): policy.trade.ec.europa.eu
- Our pillar guide: CBAM 2026 Definitive Period — 50-Tonne Threshold, Costs & Deadlines
This article is general guidance, not legal or tax advice. CBAM rules, Vietnamese GHG reporting requirements and the EU ETS price change frequently — verify current figures against official sources before making decisions.