Discussion at the Forbes Ukraine Exporters Summit
Ukrainian entrepreneurs gathered in Kyiv for the Forbes Ukraine Exporters Summit urged the government to formulate a clear position on the CBAM (Carbon Border Adjustment Mechanism) and its consequences for exports. During the discussion, issues were raised about the unequal competitive conditions for Ukrainian and European metallurgists arising from differences in state support and the impact of new carbon regulations.
Economic consequences for Ukraine
According to estimates from the Federation of Employers, CBAM could cause significant damage to the Ukrainian economy. It is predicted that by 2026, the country's GDP may decrease by 8.7 billion dollars, and by 2034 — by 11.3 billion. In comparison, European metallurgy has been undergoing a decarbonization process for almost two decades, actively funded by the state, while in Ukraine, similar support has been virtually absent. In this regard, Ukraine is conducting intensive negotiations with the European Union, seeking to maintain acceptable conditions for its exports.
- It is expected that the loss of tax revenue and social contributions will reach 2.8 billion dollars in 2026 and increase to 3.6 billion dollars by 2034.
'CBAM is essentially a tax that is barely related to ecology: it is a tool for protecting the European market and stimulating its own exports,' said Oleksandr Vodoviz. 'As a result, we are forced to reduce supplies, as we cannot compete on equal terms.'
He pointed out that while other countries protect their markets, Ukraine is losing foreign currency earnings, and he asked the government: 'What are our joint actions and calculations? Where is the plan?'. Taras Kachka added that 'European metallurgy has been developing for about 20 years at the expense of decarbonization with state support. Meanwhile, in Ukraine, the level of such support has been zero.' These statements highlight the urgent need for assistance to the Ukrainian business sector to maintain its competitiveness in the global market. This mechanism is a part of the European 'Green Deal' and directly affects Ukraine's key export sectors.
The current situation vividly shows the challenges Ukrainian businesses face on the international stage. The lack of state support amid fierce competition with European manufacturers threatens serious economic consequences. It is crucial for Ukrainian authorities to develop a strategic plan for adaptation to new realities, which would strengthen the country's position in the global metallurgical market.
In the face of growing pressure from new environmental regulations, such as CBAM, Ukrainian producers face serious challenges for their exports. At the same time, the European steel market is undergoing changes, which further complicates the situation for Ukrainian metallurgists. It is important to understand how these factors affect the competitiveness and prospects of the Ukrainian economy in the long term.