Assessing Sectoral Vulnerability of Vietnam’s Exports to the EU CBAM: Business Perspectives in a Volatile Global Economy

Linh Khanh Pham and Huong Thanh Vu ()
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Linh Khanh Pham: Vietnam National University, University of Economics and Business
Huong Thanh Vu: Vietnam National University, University of Economics and Business

A chapter in Entrepreneurship and Human-Centric Business Strategies for Social and Economic Resilience, 2026, pp 1543-1561 from Springer

Abstract: Abstract The Carbon Border Adjustment Mechanism (CBAM) has been introduced by the European Union (EU) as part of its Green Deal strategy to achieve carbon neutrality by 2050. Although its primary objective is to reduce carbon leakage, CBAM may act as a trade barrier for enterprises in developing countries such as Vietnam. This study analyzes the impact of CBAM on Vietnam’s exports to the EU, focusing on four sectors currently within the scope of CBAM: steel, aluminum, cement, and fertilizers. The paper employs the CBAM Exposure Index to measure the vulnerability at both the country and sectoral levels, in which differences in carbon cost intensity determine competitiveness in the EU market. The results indicate that Vietnam’s short-term exposure to CBAM is relatively low, as CBAM-covered products account for less than 5% of total exports to the EU. However, the fertilizer sector is particularly vulnerable due to its high carbon cost per dollar of output, while the steel sector faces the greatest potential loss given its high export value. In contrast, the cement and aluminum sectors are less vulnerable, though risks could increase if CBAM is expanded to include indirect emissions. Additionally, while the immediate impact may be limited, CBAM will impose significant medium and long-term challenges. The paper concludes that Vietnamese businesses, particularly in high-emission sectors, must proactively assess emissions, strengthen monitoring and reporting systems, and adopt cleaner production technologies. Moreover, investing in green supply chains will be crucial to maintaining competitiveness and long-term access to the EU market under stricter environmental trade measures.

Keywords: CBAM; Vietnam; EU; Exports (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-981-95-6415-6_96

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DOI: 10.1007/978-981-95-6415-6_96

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