The European Parliament’s (EP) EU Carbon Border Adjustment Mechanism (CBAM) will "put a fair price on the carbon emitted during the production of carbon-intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries."

The bloc requires exporters to report their commodities' carbon footprints, on which a tax may be levied should carbon emissions during the production of said commodities exceed the EU's carbon regulations.

CBAM will hit major Vietnamese exporters and retailers first, especially those dealing with products with higher carbon footprints, giving smaller players some time to prepare, industry experts said.

Some Vietnamese businesses, who had been anticipating the new carbon tax, have already implemented measures to reduce their carbon emissions, according to a report by a Vietnamese media outlet.

Andrew Wyatt, deputy head of the International Union for Conservation of Nature (IUCN) in Vietnam, urged the government to establish policies to monitor and issue carbon certificates to Vietnamese exporters and producers by 2025.

The IUCN, the ministry of natural resources and environment and the ministry of agriculture and rural development have been working closely together in recent years to build policy frameworks related to the global carbon market, he added.

Fibre2Fashion News Desk (DS)