Your factory has a proposal for more efficient equipment. Your finance team wants a payback period. Your EU customer wants better emissions data. Then someone suggests buying local carbon credits instead. These are connected decisions, but they solve different problems. Treating them as interchangeable is how a promising investment becomes an expensive misunderstanding.
Alberto, our contact in Vietnam, brought a useful September 17 analysis by Vietnam Briefing to our attention. Its strongest lesson is not that Vietnam’s carbon market will automatically offset CBAM. It is that manufacturers should prepare emissions records, plan allowance shortfalls and assess investments under several carbon-price scenarios, while managing EU obligations separately.
One factory, three different financial questions
- 1.
What will domestic compliance cost?
A covered installation needs to compare its emissions with its Vietnamese allowance allocation. Free allowances, purchased allowances and eligible credits have different cash consequences. Establish which rules apply to your installation before treating an allowance surplus as income or a credit purchase as a saving.
- 2.
What will the EU customer pay?
CBAM certificates are the EU importer’s legal responsibility. Your commercial exposure comes through landed-cost comparisons, requests for supplier data and contract negotiations. Work product by product, using the applicable emissions method, free-allocation adjustment and certificate-price period.
- 3.
What will the improvement save inside the factory?
Lower fuel consumption, reduced scrap, less downtime and more stable production can support an investment even when carbon prices disappoint. Separate those operating savings from a possible change in the EU customer’s CBAM cost. Neither should be counted twice.
A local credit purchase is not an automatic EU deduction
The European Commission’s definitive-regime guidance states that an importer may deduct a carbon price already paid during production if it can be proved. That is not the same as holding free allowances, buying a voluntary offset or paying for a generic corporate carbon-neutrality claim. A purchase also does not change the physical emissions embedded in a product.
Vietnam Briefing explicitly makes this distinction, which is easy to lose in a short summary. Before including a deduction in an investment case, establish whether the payment is eligible under the applicable EU rules, relates to the goods concerned, is net of relevant rebates or compensation, and can be supported by the required evidence. If recognition remains uncertain, keep that benefit out of the base case.
Do not finance a real machine with an assumed regulatory discount.
Make the proposal survive three scenarios
A low, central and high carbon-cost scenario is more useful than one confident forecast. Vary EU certificate prices, domestic allowance costs and allocation assumptions independently. Then test energy tariffs, utilization, capital cost, maintenance and the time needed to obtain usable emissions evidence.
- Low-cost case: would energy, yield and reliability savings alone justify the investment?
- Central case: does the business still earn an acceptable return after financing, verification and implementation costs?
- High-cost case: would delaying the improvement expose your most important EU contracts to a cost you cannot absorb?
- Evidence failure case: what happens if the EU buyer cannot use your actual emissions data in time?
Do not use a single emissions figure for every purpose. A domestic installation inventory, a company-wide footprint and CBAM embedded emissions answer different questions. Electricity savings may improve the factory’s energy bill and footprint without reducing the current CBAM certificate calculation for steel or aluminum goods, for which the relevant definitive rules generally count direct emissions only.
Build the decision file before the purchase order
Take one priority product and one realistic equipment proposal. Finance owns the cash assumptions. Production owns fuel, materials, output and downtime records. Procurement owns supplier and energy-contract evidence. The commercial team checks what the EU buyer will accept and whether a lower landed cost benefits you, the buyer, or both.
The file should show the starting production route, expected physical improvement, measurement method, operating savings, possible CBAM effect and the person responsible for each assumption. Agree how the outcome will be checked after installation. A project that cannot be measured cannot credibly support a better emissions declaration.
Start with the investment that matters to your EU sales
This is not an argument to postpone decarbonization. It is an argument to fund the right improvement for the right reason. Good emissions records can support domestic compliance, customer negotiations and better investment decisions. They do not make those obligations identical.
What is driving your carbon investment decision?
Use the CBAM Readiness Assessment to identify the products, supplier records and evidence gaps that need attention. The automated results overview is free. A full report and expert review are separate paid services; independent verification is a separate role.
Start the CBAM Readiness AssessmentSources and editorial references
- Vietnam Briefing, Conor Chalmers, “Vietnam’s Carbon Market: Compliance Lessons from the EU ETS”, September 17, 2026. https://www.vietnam-briefing.com/news/vietnam-carbon-market-compliance-eu-ets-lessons.html/
- European Commission, “CBAM definitive regime”, current guidance consulted November 10, 2026, publication date not specified. https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/cbam-definitive-regime_en
- Regulation (EU) 2023/956, May 10, 2023, notably Article 9 and Annex II, as amended. https://eur-lex.europa.eu/eli/reg/2023/956/oj
- European Commission, sector guidance 5D (iron and steel) and 5E (aluminum), August 14, 2026. Available through the definitive-regime guidance page.
This is our own analysis, developed from sources shared by Alberto and checked against EU guidance. Third-party rights remain with their owners. No investment return or carbon-price deduction is promised; installation-specific legal and financial checks remain necessary.
Dr. Elvis Mujagić
Dr. Elvis Mujagić is Partner and Head of CBAM at wis.dom|bridge™. He helps manufacturers and importers connect emissions evidence, sourcing decisions and carbon-cost exposure.
