Ukraine must show the EU the losses of its own industry from CBAM – Mykhailovska

At the negotiations with the European Union regarding CBAM, Ukraine must show the losses of industry that will occur as a result of the application of this mechanism and determine the need for additional financing to bring enterprises into compliance with the new standards.

Svitlana Mykhaylovska, deputy director of the European Business Association, told about this at the round table «How CBAM will weaken the economy of Ukraine», held by the GMK Center.

«At our event, the EU Ambassador to Ukraine Katarina Maternova very honestly said that we are facing negotiations without actual negotiations. That is, there are certain conditions that Ukraine must accept. The only possibility for us to negotiate is, in particular, to prepare our negotiating team in the government and parliament, to gather such expertise and analytics that will clearly show the losses that Ukrainian industry can suffer and the funding that we need to adapt to the new standards,» said Svitlana Mykhaylovska.

At the same time, the processes of CBAM are actively discussed in other countries of the world that are not members of the EU.

«I really liked the statement of Joseph Stiglitz, an American economist, winner of the Nobel Prize in Economics, who said at a recent forum in Athens that today the WTO does not add weight to the fight for the environment, but rather contributes to trade wars. But we also understand that European politicians are trying to balance the competition with such mechanisms as SVAM,» the expert added.

As Deputy Minister of Economy Taras Kachka reported, in view of the war, Ukrainian business needs relaxation regarding the work of CBAM. In the summer, consultations on granting Ukraine an exemption from the CBAM have already begun. Negotiations on this with the European Union will be continued. It is not yet clear what such a decision will include, but it will certainly not be a complete non-application of CBAM for Ukraine.

According to the results of the GMK Center research, CBAM can be applied to 15-17% of Ukrainian exports to the EU. 93% of Ukrainian exports subject to CBAM regulation are represented by the metallurgical sector, in particular cast iron, steel semi-finished products, long and flat rolled products.