Aligning with Europe's Carbon Frontier: A Comparative Study of Indonesia and Vietnam
- STEAR Editorial Office
- Jun 12
- 1 min read
The Carbon Border Adjustment Mechanism (CBAM) entered its definitive phase at a moment of considerable uncertainty for the European Union (EU)’s trading partners. As a harsh but necessary piece of legislation for Climate Change mitigation, we must investigate its differential impacts on the rest of the world.
Indonesia and Vietnam, two rapidly developing emerging economies, now play a significant role in the global economy as export-oriented production hubs. Although their exposure to the policy is different, the logic remains the same: they must use this moment to renew their social commitments and build a dynamic and stable economy.
However, the paper identifies that beneath this political divergence is a shared operational bottleneck: fragmented monitoring, reporting and verification infrastructure; prohibitive fixed costs for third-party verification; and the acute risk of EU importers defaulting to conservative benchmark values in the absence of reliable emissions data.
Here, STEAR's Economic Policy Team aims to unpack these issues and provide a systematic evaluation of the CBAM.
Student Think Tank for Europe-Asia Relations
Editorial Office
2025-2026
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