On 14 April 2023, GreenCIC, the leading partner of the Consultant team, together with Perspectives Climate Group (Germany), Applied Economic Modeling and Data Analytics Company (Australia), and NHQuang&Associates have successfully organized the Consultation Workshop on the Results of the Impact Assessment of the EU’s Carbon Border Adjustment Mechanism and Implications for Viet Nam in collaboration with the Department of Climate Change (DCC), Energy Transition Partnership (ETP), and the United Nations Office for Project Services (UNOPS).
The workshop has attracted a large number of participants from industries, state agencies, academia, and news agencies in Vietnam who actively engaged and discussed during the event. A total of 182 individuals participated, with 74 attendees present onsite and 108 joining the workshop remotely. The substantial number of participants, both physically present and virtually connected, showcased the significance and widespread interest in understanding and addressing the implications of the EU's CBAM for Vietnam.
The main purpose of the workshop is to present the results of the impact assessment of the EU’s CBAM on the steel and iron, aluminum, fertilizer, and cement sectors in Viet Nam as well as on the wider impacts on the economy, energy transition, and achievement of NDC targets. The workshop also aims to discuss and receive comments and insights from relevant stakeholders on the implications and recommendations for Viet Nam to minimize the negative impacts and maximize the benefits of the EU’s CBAM for energy transition, climate change mitigation, and low-carbon development in Viet Nam.
CBAM is a new climate policy of the European Union (EU) which puts a price on the carbon emitted during the production of carbon-intensive goods that are entering the EU to prevent carbon leakage and encourage cleaner industrial production in non-EU countries. Vietnam is expected to be potentially affected by this new policy due to a growing trade flow with the EU in terms of carbon-intensive products.
Among CBAM-covered products, Vietnam’s iron and steel, and aluminum commodities are set to be affected the most, given their engagement with the EU market. During 2017-2021, the EU made up 12% of Vietnam’s total steel exports, or US$1.1 billion annually, followed by aluminum at $48 million, or 7%. Once adopted, Dr Chu Hoang Long from Applied Economic Modeling and Data Analytics Company estimated that the CBAM would cause a decline of US$100 million in export turnover from these sectors to the EU.
By presenting the impact assessment results of the EU's Carbon Border Adjustment Mechanism (CBAM) on key sectors in Vietnam, the workshop has provided participants with a deeper understanding of the potential implications of this policy on the country's economy, energy transition, and achievement of NDC targets. Furthermore, the workshop has raised awareness among participants about the urgency and importance of accelerating energy transition and climate change mitigation efforts in Vietnam. By highlighting the potential impact of the EU's CBAM on key sectors such as steel and iron, aluminum, fertilizers, and cement, participants were expected to gain a clearer understanding of the need for sustainable and low-carbon practices in these industries.
For the next steps, the Consultant team will continue to conduct an in-depth study analyzing the implications and providing recommendations on the roadmap and the design of the carbon tax system in Vietnam. The results of the study will be consulted with stakeholders by the end of August this year and compiled into the grand final report of the project.
Nguyen Viet Can
