FEU calculates the size of the negative impact of CBAM on Ukraine

On January 17, the Federation of Employers of Ukraine hosted a presentation and discussion of the results of two studies conducted by CMD-Ukraine within the framework of the Climate Platform. In particular, the studies focused on the awareness of domestic business on the European Green Deal and the results of modeling the impact of the Carbon Border Adjustment Mechanism (CBAM) on the Ukrainian economy.

They also discussed the results of the first year of the CBAM mechanism for Ukrainian companies. According to CMD-Ukraine expert Yevhen Ivanov, the survey results showed the following main CBAM-related problems that Ukrainian companies have recently faced when exporting their products to the EU

• lack of open data -3 0%;
• difficulties with filling out reports – 26%;
• lack of knowledge and skills – 18%;
• high cost of consultant services – 15%;
• refusal of partners due to high emissions – 12%.

“The biggest challenges for us in implementing CBAM are uncertainty, unpredictability, and lack of data. Yes, we have already learned how to fill out CBAM reports, but the overall amount of uncertainty remains very high. In particular, we do not yet know the reference values of greenhouse gas emissions in the EU for our HS codes, which will be in force and how the EU will change them, what will be the dynamics of the cost of CBAM certificates, how the EU will expand the list of goods subject to CBAM, etc.”, added Sergiy Lavrynenko, CEO of Stalkanat, during the discussion.

The entry into force of the CBAM in 2026 will result in losses for the Ukrainian economy, which is traditionally export-oriented. According to CMD-Ukraine, as a result of the CBAM, Ukraine may lose 6.4% of GDP by 2030, exports may decline by 6.3%, including 9.8% to the EU, and the number of jobs may be reduced by more than 116 thousand positions.

The results of the research presented and the discussion of the first results of CBAM’s functioning will be sent to the relevant government agencies.

“During the year, our companies have gained some experience in implementing the CBAM provisions. We will summarize the problems we have heard and, based on the results of the event, prepare an appeal to the government with our vision of how these problems should be solved,” said Olga Kulyk, Director of the Department of Ecology, Energy and Green Economy of the Federation of Employers of Ukraine.

As GMK Center reported earlier, given the negative impact of the CBAM on the Ukrainian economy and the steel industry in particular, it is very important that Ukraine receives certain preferences to mitigate the effect of this mechanism. In particular, it could be a declarative approach to goods imported from Ukraine to the EU and subject to the CBAM for the period of martial law and several years for the period of reconstruction.

Moreover, from a legal point of view, the EU has all the necessary tools to provide Ukraine with conditions that mitigate the impact of the CBAM. In particular, according to Article 30 of the CBAM Regulation, in the event of an unforeseen event related to the CBAM that has devastating consequences, the European Commission may initiate changes and the introduction of temporary measures to overcome these exceptional circumstances. According to Ukrainian experts and businesses, Russia’s full-scale aggression against Ukraine fully meets the criteria of an unforeseen event.