From 1 January 2026, the EU Carbon Border Adjustment Mechanism (CBAM) entered its definitive phase with financial obligations phasing in: goods in the covered groups (cement, iron and steel, aluminium, fertilisers, electricity, hydrogen) imported into the EU must pay a cost based on the emissions embedded in the product. For a factory in Vietnam exporting to the EU, emissions are no longer a domestic environmental-reporting matter — they are a border cost on every consignment. The factory’s location decides a large part of that cost. This article sets out IP-assessment criteria through the CBAM lens, separating two easily-confused concepts: an “eco-industrial park” under Vietnamese certification, and a “CBAM-ready site” under EU data needs.
1. What Vietnamese eco-IP certification actually verifies
The eco-industrial park concept and its certification criteria are set by Decree No. 35/2022/ND-CP: Article 37 sets criteria for both the infrastructure investor and in-park enterprises — compliance with investment, enterprise, construction, land, environmental and labour law for the 03 years before certification registration; in-park enterprises performing at least one industrial-symbiosis activity and applying appropriate ISO management systems; at least 25% of park area reserved for greenery, transport, technical zones and shared social infrastructure; and housing and services solutions for workers. A newly-registered eco-model park must commit to meeting these criteria within 08 years of establishment (Article 38). In diligence, do not stop at the “eco” label in the brochure: require the certification decision/document, the list of symbiosis links actually operating (who sells steam/scrap to whom), and the park’s annual environmental reports — documents the factory owner can verify independently with the IP management board.
2. What data CBAM needs at factory level — and how location affects it
CBAM is computed on the emissions embedded in goods as declared by the producer: direct emissions from the production process and — for some goods groups — indirect emissions from consumed electricity, calculated on the emission factor of the grid where production occurs unless a dedicated source is proven. The practical consequences for site choice: first, the grid emission factor is an unfavourable default — a factory reduces indirect emissions mainly by buying evidenced renewable electricity (see section 3) or using in-park symbiotic energy (steam from a neighbouring plant instead of its own boiler). Second, the factory must build its own product-level measurement–reporting–verification (MRV) from the design stage: metering points for gas, steam and electricity per workshop; a park with good metering infrastructure and shared data cuts the factory’s MRV cost significantly. Third, the CBAM trajectory tightens: the EU ETS free-allocation benchmark factor declines year by year across 2026–2034, so the factory’s emissions intensity becomes a growing financial variable — site criteria must assess the trajectory, not just the current state.
3. Renewable electricity: DPPA and its practical limits per park
The direct power purchase agreement (DPPA) mechanism under Decree No. 57/2025/ND-CP (as amended by Decree No. 243/2026/ND-CP) lets large electricity consumers — per the Ministry of Industry and Trade’s rules, customers averaging at least 200,000 kWh/month — buy renewable power directly from generators via a private line or via the national grid (connection at 22 kV or above for the grid model). When choosing a park under CBAM pressure, the pivotal questions are: does this park allow and support factory DPPA participation, is the park’s retail electricity unit inside the mechanism, can rooftop solar be installed on the factory roof (structurally and under the direct-sale mechanism), and does the park operate any in-park renewable project. Evidence caveat: renewable power only helps a CBAM file when volumes and origin are recorded by an EU-recognised methodology — a DPPA must come with real-time output data mechanisms and energy-origin certification, not merely a “green power” promise in the land lease.
4. A site diligence checklist for EU-facing factories
Combine the layers into a checklist when comparing parks: (1) eco-certification status and evidence of operating symbiosis; (2) wastewater and waste — EU-facing factories face supply-chain audits (CSRD and EU customers’ supply-chain diligence rules), so the park’s central wastewater plant should have good public online discharge data and no major sanction history; (3) symbiotic heat and steam replacing on-site fossil fuels; (4) data infrastructure — a central energy/environmental data system able to export data for the factory’s MRV; (5) expansion trajectory — ability to add solar and expand the plant without worsening emission factors; (6) infrastructure-investor commitments written into the land lease: the factory’s DPPA rights, rooftop solar rights, access to shared-infrastructure data, and notice when the park changes its central energy source. A genuinely “eco” park should answer all six groups with documents, not just a certificate label.
Frequently asked questions
Does locating in an eco-IP exempt or reduce CBAM obligations?
No. CBAM has no location-based exemption; the obligation is computed on the actual embedded emissions of each producer’s goods. An eco-IP only helps the factory cut real emissions (renewable power, energy symbiosis) and cut proof costs — the benefit lies in lower emissions data and a better MRV file, not in the park’s label.
Our product group is not yet in the first CBAM scope — should we still choose a site by these criteria?
Consider the trajectory: the EU has announced directions to extend CBAM to downstream goods and add product groups in later reviews; in parallel, EU customers’ emissions-reporting demands under CSRD apply independently of CBAM. A factory has a 30–50 year life, so choosing a site for future emissions-reduction capability is always safer than relocating or retrofitting heavily mid-life.
How is the actual CBAM amount computed for the site-choice financial model?
The CBAM obligation equals embedded emissions multiplied by the CBAM certificate price (anchored to EU ETS auction prices), minus the share rebated by the adjustment factor during the 2026–2034 phase-in and minus any carbon price paid in the country of production under an EU-recognised mechanism. When comparing sites, the financial model should run each site option’s emissions scenario against a forecast EU ETS price curve — the indirect-emissions gap from electricity is currently the largest differentiating variable between Vietnamese IPs.
Does rooftop solar on a leased factory inside an IP count toward the renewable-energy file?
Yes, if the system is recorded as owned/operated by the factory or bought through a valid mechanism (including DPPA and direct-sale rooftop solar under the current mechanism), with metered output data. A frequent snag is that the roof belongs to the IP infrastructure investor who subleases it — settle installation rights, output ownership and data rights right in the land-lease document.
This article has been quality-reviewed by the FLAW AI Legal Council
