Challenges in verifying emissions for reporting under the CBAM
The uncertainty surrounding procedures related to the accreditation of professionals outside the EU poses significant financial risks for exporters and requires urgent decisions at the level of the Ukrainian government and the European Commission
One of the biggest challenges domestic producers face when submitting CBAM reports is the lack of accredited verifiers in Ukraine. This was stated by Yaroslavna Blonska, Acting Marketing Director of the Ferrexpo Group, during the roundtable discussion “The Impact of CBAM on Ukraine’s economy and the steel sector in 2026–2030,” organized by the GMK Center. For Ferrexpo, the number one issue today is metrics and verifiers.
Additional financial burden due to default metrics for Ukraine
Based on historical data, approximately 80% of Ferrexpo’s exports consist of products subject to CBAM—namely, pellets. The company is investing in decarbonization and monitoring emissions reductions. An additional financial burden on exports based on verified data is not expected until after 2030, but for the group’s companies, the recognition or application of default benchmarks for the products they manufacture is currently a major concern.
If the company’s current buyers use the default level for iron ore pellets, this will result in an additional financial burden of over $3 per ton of pellets, which the buyer will pay in 2027. In other words, Ferrexpo will lock in these prices and ship the product in 2026, but the actual financial burden will occur in 2027. This is a very significant amount, given the volume of production. If the company is able to use verified actual data, this additional burden will be zero.
By 2030, Ferrexpo will achieve the following result: no CBAM payments for its customers. This is the result of the company’s long-term investment in various projects aimed at decarbonizing production.
Tight deadlines
According to the European Commission’s current procedure, the list of accredited verifiers is compiled and approved by September 30 of the current year. There is a risk that companies and enterprises from third countries may not complete this verification process in a timely manner.
European market participants recommend applying for registration in several countries because there are currently very long queues and the procedure takes a long time. Manufacturers should also note that not all verifiers have the full range of steel products on their list.
Currently, there are no verifiers operating within the EU ETS specifically from Ukraine. At present, there are unwritten rules under which those already operating under the EU ETS can obtain accreditation by September 30, which creates an even greater risk for Ukrainian applicants. Ferrexpo is in communication with potential candidates—future accredited agents. At present, the mechanism for their involvement has not been defined, and there is no clear procedure for recognizing their verification results.
What steps are industrialists expecting from the government
Ukraine must establish a platform, possibly under the Ministry of Economy, Environment, and Agriculture. This could be a department dedicated exclusively to the CBAM.
Clear requirements and an accreditation procedure for Ukrainian verifiers must be established. Domestic businesses are keen to have companies available by September 30 with which they can collaborate on verification. It is crucial to know when, to whom, and how Ukrainian candidates should submit applications, as well as the deadlines set for them.
The company’s mission is to produce goods, invest in decarbonization, and export them under existing long-term contracts to the best steel producers in Europe. However, Ferrexpo currently depends on the actions of the future verifier.
At the national level, our company requests assistance in expediting the accreditation procedures for national verification bodies in accordance with EU requirements.
The following options are proposed to address the challenges related to verification:
- introduce a temporary mechanism in the event of delays in international verification;
- agree on a procedure for using data that has already been verified by Ukrainian authorities;
- provide for temporary recognition or a simplified admission procedure for Ukrainian verifiers at the EU level.
If, by September 30, there is no feedback or information from the Ukrainian candidates, there is a very high risk that representatives from Ukraine will not be included in the list under the general procedure. According to information from international businesses and Ferrexpo’s clients, priority may be given to companies already operating under the EU ETS, meaning that the conditions for Ukrainian verifiers and large companies will already be unequal.
