The EU will affect Vietnam's steel and aluminum exports

The EU Carbon Border Adjustment Mechanism (CBAM) will take effect in 2024 and will have an impact on the production and trade of Vietnamese manufacturing enterprises, especially high carbon emitting industries such as steel, aluminum, and cement.

According to the report, CBAM aims to create a level playing field for European companies by imposing carbon border taxes on products imported from countries that have not adopted equivalent carbon pricing measures. EU members are expected to start piloting CBAM in October, which is first applicable to imported goods from high carbon leakage risk and high carbon emission industries such as steel, cement, fertilizers, aluminum, electricity, and hydrogen. These industries together account for 94% of the EU's total industrial emissions.

According to expert predictions, steel will be the industry most affected by CBAM in Vietnam, followed by the aluminum industry. Affected by CBAM, it is expected that Vietnam's steel production will decrease by 0.8% and its export value will decrease by 2.3% by 2030; Aluminum production will decrease by 0.4% and export value will decrease by 4.3%.