CBAM 2026: The Rules for Exporting to the EU Are Changing
For businesses selling into the European market, commercial discussions have traditionally centred on price, quality, material origin and delivery. From 2026, another question is becoming harder to ignore: How much carbon is embedded in this product?
What once appeared to be a matter for sustainability teams is now finding its way into supplier assessments, commercial negotiations and purchasing decisions. Driving this shift is the European Union’s Carbon Border Adjustment Mechanism, or CBAM.
What is CBAM, and why does it matter in 2026?
The EU introduced CBAM to address “carbon leakage” — the risk that carbon-intensive production moves to countries with less stringent climate policies, while the resulting goods continue to be sold in the European market. In practical terms, CBAM seeks to apply a comparable carbon cost to certain imported goods and products manufactured within the EU.
Following a transitional reporting period from October 2023 to the end of 2025, CBAM entered its definitive phase on 1 January 2026.
The mechanism currently covers selected goods across six carbon-intensive sectors:
Iron and steel
Aluminium
Cement
Fertilisers
Electricity
Hydrogen
EU importers that fall within the scope of CBAM must meet requirements relating to authorisation and emissions reporting. They must also purchase and surrender CBAM certificates to account for the emissions embedded in the goods they import.
What does CBAM mean for Vietnamese businesses?
Although the formal CBAM obligations sit primarily with EU importers, those importers cannot meet their obligations without information from manufacturers and suppliers. Vietnamese businesses may therefore be asked to provide detailed data on energy and fuel consumption, production processes, raw materials and the emissions embedded in their products.
For companies with mature data-management systems, these requests may be manageable. For many others, the necessary information is still scattered across departments, recorded in different formats or collected for purposes unrelated to carbon reporting. The challenge is not simply knowing how to calculate emissions. Businesses must first determine what information is required, where it is held, who is responsible for it and whether the figures can be supported if they are questioned or independently verified.
How can CBAM reach businesses that do not export directly to the EU?
CBAM can reach much further than the company named on an export contract.
A Vietnamese business may not sell directly to the EU but could supply raw materials, components or intermediate goods to another manufacturer that does. If that manufacturer needs to calculate the embedded emissions of its final product, it may request data from suppliers further down the value chain.
A company may therefore be affected by CBAM even when its own products are not exported directly to Europe. The relevant questions are where the business sits within the supply chain, how its products are ultimately used and what information its customers may soon be expected to provide.
Why is CBAM more than an ESG responsibility?
CBAM is often treated as an environmental, sustainability or ESG matter. In reality, preparing a credible response requires input from across the business. Production and technical teams hold data on materials, energy use and manufacturing processes. Procurement teams manage relationships with upstream suppliers. Finance teams understand costs, while sales and export teams are often the first to hear what customers need. Without clear ownership and coordination, a business can spend considerable time simply locating, reconciling and validating its data. The pressure increases when a customer requests the information at short notice.
A supplier that can provide clear, credible data promptly is easier for an importer to work with. Where a business can also demonstrate lower embedded emissions, this may strengthen its position when buyers compare potential suppliers.
How could CBAM change export negotiations?
Price, quality and delivery will remain central to supplier selection. CBAM, however, introduces another consideration: the ability to provide reliable emissions data. Where the required information is unavailable or difficult to verify, an EU importer may face additional uncertainty in meeting its own obligations. This could affect processing times, costs and, ultimately, purchasing decisions. As a result, questions about emissions may begin to appear much earlier in the commercial process — during supplier screening, requests for quotation, supply chain reviews and contract negotiations.
Carbon data is no longer relevant only to sustainability reporting. It is becoming part of the information businesses need to trade.
How should businesses begin preparing for CBAM?
Preparing for CBAM does not necessarily begin with a complex new system. A more practical starting point is to establish the company’s current position:
Are its products and commodity codes within the scope of CBAM?
Have customers or importers in the EU already requested emissions information?
What data is currently available on materials, electricity, fuel and production volumes?
Where is that information held, and which teams are responsible for it?
Which suppliers may need to contribute additional data?
Who will coordinate the company’s response when a CBAM-related request arrives?
These questions will not resolve every aspect of CBAM, but they will reveal where the main gaps lie and where further action may be needed.
What does a proportionate CBAM response look like?
CBAM does not mean that every business must immediately launch a large-scale carbon management programme. The right level of preparation will depend on the company’s products, export markets, place within the supply chain and the requirements of its customers. Some businesses may need a comprehensive process for calculating and verifying embedded emissions. Others may initially need to clarify their exposure, review the data they already hold and appoint someone to coordinate the work. For businesses connected to the EU market, however, this is the right time to begin that assessment. Building the necessary understanding and data gradually is far more manageable than attempting to assemble everything after an urgent customer request arrives.
Price and quality still matter. But as CBAM reshapes the conditions of trade with the EU, the ability to provide a credible answer on carbon may become a competitive advantage in its own right.
Follow Star Consulting for further insights into CBAM, emissions management and the changes shaping businesses across international supply chains.
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