Many steel and cement exporters are buying voluntary carbon credits expecting the spend to be deducted from their CBAM liability in Europe. That expectation is legally wrong under Article 9 of the CBAM regulation: only a mandatory carbon price actually paid can be deducted, while voluntary credits sit entirely outside the mechanism. This article analyses the real deduction mechanism, the state of Vietnam’s carbon market and what companies should do instead of buying credits on a trend.
1. Applicable legal framework
Article 9 of Regulation (EU) 2023/956 lets a CBAM declarant claim a reduction in certificates to surrender corresponding to a carbon price effectively paid in the country of origin for the emissions embedded in the goods, provided that price is a carbon tax or a priced emissions trading mechanism and is not rebated in another form. Voluntary carbon credits bought on the market do not constitute a carbon price paid under this article. In Vietnam, Decree 06/2022/ND-CP maps a carbon market roadmap with a pilot credit exchange from 2025 toward official operation in the 2028 to 2029 window, but no broad mandatory carbon price exists at the time of writing.
2. What Article 9 deducts: a mandatory price paid, not voluntary credits
The Article 9 deduction targets money a producer was legally forced to pay at home because of the emissions of that very product, typically a carbon tax or compliance cost inside a mandatory ETS. The EU’s logic is to avoid pricing the same tonne of emissions twice, not to reward voluntary offsetting behaviour anywhere in the world.
Voluntary credits fail that logic: they are offset instruments bought from emission-reduction projects, not a mandatory price attached to the shipment’s own emissions, and the buyer has still paid no carbon price for the emissions inside its own product. However many voluntary credits a company holds, the CBAM certificates its EU customer must surrender for the shipment do not fall by a single unit under the current mechanism.
3. Where Vietnam’s carbon market stands on its roadmap
Decree 06/2022/ND-CP sketches a two-stage roadmap: preparation and a pilot domestic carbon credit exchange from 2025, moving toward official carbon market operation in the 2028 to 2029 window. At the present stage Vietnam applies no broad mandatory carbon price to CBAM-covered installations, so the practical conditions for an Article 9 deduction barely exist.
FDI companies should separate three concepts that sales pitches habitually blend: allocated emission allowances, carbon credits from reduction projects, and a mandatory carbon price actually payable. Only the third concept has a door into Article 9, and it appears only when Vietnam operates a compulsory pricing mechanism under which producers genuinely pay money per their own emissions.
4. What to do with today’s carbon budget instead
First priority is investing in measurement and real emission cuts at the installation, because lower embedded emissions reduce CBAM certificates directly regardless of any deduction mechanism. Second priority is tracking the domestic market design: if Vietnam builds a mandatory pricing mechanism in future, companies with clean emissions records and ready measurement systems will be first in line to evidence a price paid to the EU side.
Voluntary credits still hold value for group climate pledges and communications, but they must be accounted for honestly: a voluntary ESG expense, not a CBAM saving. Finance teams should require every credit purchase proposal to state which legal benefit is expected in the EU, and the truthful answer under current rules is that no deduction benefit exists.
5. Frequently asked questions
How is a carbon price paid in Vietnam deducted from the CBAM liability?
Article 9 of Regulation (EU) 2023/956 reduces certificates to surrender by a mandatory carbon price effectively paid at origin for the goods’ emissions, where that price is not rebated. Vietnam currently has no broad mandatory carbon price, so a practical deduction barely arises. Voluntary carbon credits are not deductible under this article at all.
What documents prove a carbon price was paid in Vietnam?
Where the deduction becomes usable, the EU declarant needs evidence of a carbon price paid that attaches to the goods’ emissions: the legal basis of the mandatory charge, payment records and the product allocation method, plus proof the amount was not rebated. At present, with no broad mandatory carbon price in Vietnam, there is nothing for such a file to document.
What is Vietnam’s carbon market like today and how do FDI firms take part?
Vietnam is in the preparation and pilot credit-exchange stage under the Decree 06/2022/ND-CP roadmap, heading toward official operation in the 2028 to 2029 window, with no broad mandatory ETS yet. FDI firms participate by preparing inventory data, watching pilot allowance allocation and feeding policy comments through associations, not by expecting deductions right now.
Without a domestic carbon price, how is the CBAM liability calculated?
The liability is calculated in full on the goods’ embedded emissions multiplied by the CBAM certificate price, with no Article 9 reduction. That makes real emission cuts at the installation and supplying actual data instead of default values the only two levers for lowering CBAM cost in Vietnam’s current phase.
This article has been quality-reviewed by the FLAW AI Legal Council