Navigating CBAM: Key Insights from Normec's Webinar with DBAV
Normec Verifavia, in collaboration with the Dutch Business Association Vietnam (DBAV), recently co-hosted a webinar Understanding CBAM- A Practical Guide for Vietnamese Manufacturing Exporters. The session focused on guiding iron and steel manufacturers in Vietnam through the complexities of CBAM compliance.
Key Takeaways from the Webinar
The session covered critical aspects of CBAM compliance, including:
✅ CBAM Overview & Regulatory Context – Understanding the framework and its objectives.
✅ Scope, Structure & Implementation – How CBAM is being rolled out across industries.
✅ Compliance & Penalties – The verification process, reporting requirements, and consequences of non-compliance.
✅ Omnibus Proposal – EU efforts to simplify CBAM reporting.
✅ Vietnam’s Positioning – How CBAM will impact Vietnamese industries.
What is CBAM?
The Carbon Border Adjustment Mechanism (CBAM) is a key environmental policy introduced by the European Union to address carbon leakage—the risk that companies relocate production to countries with weaker climate policies to avoid stricter emissions regulations. It serves as an extension of the EU Emissions Trading System (EU ETS), ensuring that imported goods are subject to the same carbon pricing as those produced within the EU.
CBAM applies to high-carbon-intensive imports, such as iron, steel, cement, aluminum, fertilizers, electricity, and hydrogen. Importers must calculate and report the embedded carbon emissions of these products and purchase CBAM certificates to cover the associated carbon cost. The price of these certificates is linked to the EU ETS carbon price, ensuring a level playing field between domestic and foreign producers.
For example, if a Dutch company imports steel from Vietnam, it must determine the total CO₂ emissions generated during production. Based on that data, the importer will need to report the emissions to EU authorities and buy CBAM certificates accordingly. If the exporting country already has a carbon pricing mechanism (like an emissions trading system), its carbon price may be deducted from the total CBAM obligation.
CBAM is currently in a transitional phase (2023-2025), requiring importers to report emissions without financial obligations. Starting in 2026 or 2027 depending on the recent Omnibus proposals, importers will have to purchase CBAM certificates and comply fully with the system.
Compliance Responsibilities: What Importers and Exporters Need to Do
For Dutch Importers:
Importers must provide verified emissions data and documentation to the CBAM registry every quarter:
- A monitoring procedure for CBAM goods based on their CN codes (Annex I of the CBAM Regulation).
- A CBAM declaration covering key documents such as:
- Proof of import (invoices, contracts, shipping documents).
- Import & customs declarations.
- Verified CO₂ data from suppliers.
- Exemption proof (e.g., for "returned goods").
For Vietnamese Exporters:
To support EU clients, Vietnamese manufacturers must provide every year:
- Monitoring Plan (or equivalent under a local ETS).
- Report on embedded emissions from production.
- CO₂ emissions allocation per imported product.
- Verification Statement (or equivalent in local ETS).
- Local carbon pricing information (e.g., Chinese ETS carbon allowance price paid on electricity).
Preparing for CBAM: What Vietnamese Exporters Need to Know
Vietnamese exporters must be prepared to calculate and report the emissions associated with their products to enable their EU clients to comply with CBAM regulations. This is not just about EU compliance—it also aligns with Vietnam’s own plans to implement an Emissions Trading System (ETS) by 2027.
Starting this year, Vietnamese facilities emitting over 3,000 tCO₂e/year must report their emissions. While this may initially seem burdensome, companies can leverage the same data and methodologies required for CBAM compliance to streamline reporting under Vietnam’s future carbon regulations.
Final Thoughts
As CBAM takes effect, businesses across the supply chain must proactively adapt to these new regulations. By preparing early, both EU importers and Vietnamese exporters can navigate compliance efficiently while positioning themselves for long-term success in a carbon-conscious global market.
Example of filled in CBAM templates
Declaration portal for importers