President of OP "Ukrmetalurgprom" Oleksandr Kalenkov at the conference "Ukrainian export. Does the window open?” in Kyiv emphasized the importance of urgent negotiations with the European Union regarding the postponement of the cross-border carbon regulation 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?
From January 1, 2026, the CBAM mechanism will begin to operate in the European Union, according to which imported goods with high carbon emissions will be subject to additional tariffs. The rule aims to protect European producers who already pay contributions under the carbon trading system. CBAM will apply to products from various industries, including cement, iron, steel, aluminum, fertilizers and power.
Negative consequences for the Ukrainian economy
Kalenkov emphasized 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 urged European partners to consider delaying the implementation of CBAM for Ukrainian goods. In conditions where 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
As part of the transition period starting on August 1, 2024, companies supplying goods to the EU will be required to submit emissions data that 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 norms are exceeded, emission certificates must be purchased.
Losses from CBAM
The publication Politico previously reported that Ukraine may lose about 1.4 billion euros . However, these losses can be avoided by opening negotiations with the EU on granting benefits, as the CBAM mechanism provides for the possibility of tax deferrals in the event of force majeure, such as war.
Stanislav Zinchenko, the head of the Industrial Ecology and Sustainable Development Committee of the European Economic Area, 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.
