President of Ukrmetallurgprom Oleksandr Kalenkov, at the conference “Ukrainian Export. Is the Window Opening?” in Kyiv, stressed the importance of urgent negotiations with the European Union on the postponement of the Carbon Cross-Border Adjustment Mechanism (CBAM) for Ukraine. He noted that the war is a force majeure circumstance that has devastating consequences for the country’s economy and industry.
What is CBAM?
The European Union will introduce a CBAM mechanism, under which imported carbon-intensive goods will be subject to additional tariffs from 1 January 2026. The rule aims to protect European producers who already pay contributions under the carbon trading scheme. The CBAM will apply to products from a range of sectors, including cement, iron, steel, aluminium, fertilisers and electricity.
Negative consequences for the Ukrainian economy
Kalenkov stressed that from January 1, 2026, Ukraine will be obliged to pay funds under the CBAM. Given that the war has caused significant damage to the economy, he called on European partners to consider the possibility of postponing the introduction of the CBAM for Ukrainian goods. In conditions when Ukraine exports most of its products to Europe, the introduction of this mechanism will be a serious blow to the economy, covering not only metallurgy, but also other industries related to electricity consumption.
Transition period and CBAM requirements
During a transition period starting on 1 August 2024, companies supplying goods to the EU will be required to submit emissions data, which includes not only their own emissions but also emissions related to the production of raw materials. From 2026, these data will need to be confirmed by independent verifiers and, if the standards are exceeded, to purchase emission certificates.
CBAM losses
Politico previously reported that Ukraine could lose about 1.4 billion euros . However, these losses can be avoided if negotiations with the EU begin on granting benefits, since the CBAM mechanism provides for the possibility of deferring tax payments in the event of force majeure circumstances, such as war.
Stanislav Zinchenko, Chairman of the Committee on Industrial Ecology and Sustainable Development of the EVA, also noted that the introduction of CBAM will lead to changes in trade flows and an increase in the financial burden on imports, which currently means only losses for Ukraine.
