FEU emphasizes the need for negotiations with the EU on postponement of CBAM for Ukraine

The Federation of Employers of Ukraine (FEU) has emphasized the need to negotiate with the EU and ensure the use of the force majeure clause in the application of the CBA regulation to Ukrainian business. This was discussed at a meeting chaired by Prime Minister Denys Shmyhal on deregulation and removal of administrative obstacles.

The FEU voiced the СВАМ issue in the list of factors that impede the normal operation of domestic business and, in the opinion of the Federation members, need to be resolved as soon as possible at the state or interstate level.

It is worth noting that according to the FEU’s January study on the impact of CBAM on Ukraine’s economy, the introduction of the European carbon tax will lead to a decrease in Ukrainian exports of products subject to the mechanism by $1.8 billion in 2026. As the cost of carbon emissions in the European Union increases, the restrictive effect of the CBAM on domestic exports will reach $2.3 billion in 2030 and $2.4 billion – in 2034. Thus, immediately after the introduction of the carbon fee at the border, Ukrainian exports of CBAM products to the EU will decrease by 50.6%.

The federation also noted the need to continue tariff liberalization with the EU for Ukrainian goods after the expiration of the EU Regulation on Autonomous Trade Preferences (ATP).

Among the problematic issues that create obstacles for business, the FEU also mentioned the pressure of law enforcement agencies on business. The FEU called for an urgent return to the idea of repeating the moratorium on investigative actions, conducting an audit of proceedings and adopting amendments to the Criminal Procedure Code of Ukraine
developed by the business community.

In addition, the Federation pointed to insufficient business lending and difficult access to credit resources; restrictions on the timing of foreign exchange payments, which lead to problems for exporters and the import of technically complex equipment, issues related to bookings, etc.

The FEU submitted an official letter to the Prime Minister with the relevant proposals.

It is worth reminding that the introduction of the EU’s carbon border  adjustment mechanism may have irreversible consequences for the economy, exports and employment in Ukraine. Such a warning was expressed by Lyudmyla Tsyhanok, founder of ESG Liga, president of the Association of Environmental Professionals (PAEW) and CEO of the Office of Sustainable Solutions. Therefore, the government should immediately appeal to the European Union to postpone the CBAM for Ukrainian producers.

Earlier, the Ukrainian Cement Association Ukrcement, as well as the National Association of Mining Industry of Ukraine and leading subsoil use market participants, made similar calls to the government.