Carbon Border Adjustment Mechanism (CBAM) might affect one third of Ukraine’s exports to the European Union. This opinion was presented by Stanislav Zinchenko, GMK Center Director, at the international online conference “Climate policy: risks and implications for the economic and financial sectors”.
He reminded that in 2019, Ukraine’s revenues from exports to the EU totaled €21.1 billion. Importantly, the most carbon-intensive commodities that Ukraine exports include electricity and fertilizers, as well as mining & metals sector products, such as pig iron, steel semi-finished products, rolled products, pipes and tubes, metalware, other products made of ferrous metals, ores.
According to Mr Zinchenko, CBAM is going to increase the fiscal burden by 42% of the finished product price for electricity producers, by 18% for carbamide producers and by 15% for producers of pig iron and semi-finished products. That will adversely impact Ukraine’s exports to the EU.
“Ukraine is one of the first countries that joined the European Green Deal. Since Ukraine signed the Association Agreement with the EU, it assumed lots of commitments. They include introduction of the monitoring system and the allowances market in Ukraine. The government and the business are now holding open discussions on various platforms. Ukraine has already commenced the integration process,” says Stanislav Zinchenko.
Ukrainian businesses are concerned about the upcoming changes in the rules of trade with the EU. The leading business organizations have already responded to potential risks that CBAM is going to bring.
As reported earlier, the European Parliament supported the introduction of CBAM last week and adopted a resolution to that effect. That document is declarative and describes no specific CBA mechanism, nor sets any particular deadlines for its introduction. The European Commission is expected to present its official proposal on CBAM by the end of Q2 2021. CBAM is supposed to take effect in 2023 at the latest.
Carbon Border Adjustment is a tax that will be imposed on carbon-intensive products imported to the EU depending on the volumes of CO2 emitted in the process of their manufacture. CBA is part of the European Green Deal.
In April 2024, Ukraine increased imports of flat products by 32.7% compared to the previous…
Liberty Steel's Hungarian subsidiary, Liberty Dunaújváros, formerly known as Dunaferr, has signed a contract to…
Global exports of iron ore in January-March 2024 increased by 6% compared to the same…
The European Commission (EC) has launched an investigation into Chinese tinplate to determine whether imports…
In January-April 2024, Chinese steel companies reduced steel production by 3% compared to the same…
In April 2024, Ukrainian steel enterprises increased exports of long steel products by 7.6% compared…