CBAM should not finish off Ukrainian industry – ULIE

The Ukrainian League of Industrialists and Entrepreneurs (ULIE) has supported the government’s intention to appeal to the EU to postpone the carbon border adjustment mechanism (CBAM) for Ukraine.

The country is currently preparing an appeal to the European Commission to start formalized negotiations on this issue. The intention of the Cabinet of Ministers to initiate a corresponding official appeal was announced by the Trade Representative of Ukraine Taras Kachka. The ULIE notes that this is a necessary decision.

“In the context of a full-scale war with the Russian aggressor and a shortage of resources, the introduction of additional carbon taxes is critical for the Ukrainian industry,” the organization said in a statement.

Currently, CBAM operates in a limited format, and the mechanism is expected to be fully deployed on January 1, 2026. It is a carbon tax on imported products from the steel, cement, chemical, and other industries. According to preliminary estimates, its introduction would cost Ukrainian producers more than €1 billion.

The ULIE has repeatedly appealed to government agencies, European partners and international organizations to take into account the exceptional conditions in which Ukrainian industry operates.

“Last year, we emphasized that the application of the CBAM without a transition period or exceptions for Ukraine is an economically disastrous decision. In March of this year, we again appealed to the government with arguments from business and experts. The UUIE consistently supports European integration, but approaches to carbon duties should be fair and realistic,” the business union said.

According to the ULIE, the domestic industry is currently operating in a full-scale war: enterprises are being destroyed by enemy shelling, face a lack of working capital, and are losing markets. In addition, they are forced to invest in energy autonomy to avoid blackouts. The introduction of an additional duty on CO2 emissions without taking these factors into account is a direct blow to the competitiveness of Ukrainian exports.

The ULIE emphasizes that CBAM should not become a new trade wall between Ukraine and the EU and calls on European partners to show solidarity.

“The EU should take into account that Ukraine is protecting not only itself, but also the security of Europe. Therefore, the support should be appropriate, including economic exemptions for the period of war and recovery from the consequences of Russian aggression,” emphasized Anatoliy Kinakh, President of the ULIE.

The ULIE, the Anti-Crisis Headquarters for Economic Resilience under Martial Law, together with industry associations, are preparing a targeted meeting on the actions agreed with the EU to implement the decarbonization policy.

As a reminder, the Federation of Employers of Ukraine emphasized the need to negotiate with the EU to postpone the CBAM for Ukraine.

Lyudmyla Tsyhanok, founder of ESG Liga, President of the Association of Environmental Professionals (PAEW) and CEO of the Office of Sustainable Solutions, expressed caution that the introduction of the EU’s cross-border carbon adjustment mechanism could have irreversible consequences for the economy, exports and employment in Ukraine. Therefore, the government should immediately appeal to the EU to postpone the CBAM for Ukrainian producers.

Earlier, Ukrcement, the association of cement producers of Ukraine, as well as the National Association of Mining Industry of Ukraine and leading participants in the subsoil use market, addressed the government with such appeals.