Ukrainian Business Urges EU Talks to Avert $5 Billion Export Loss

Appeal to the Government

According to Главком: The Ukrainian Union of Industrialists and Entrepreneurs (UСPP) has called on the government to urgently intensify negotiations with the European Union. The goal is to secure a delay in the implementation of the Carbon Border Adjustment Mechanism (CBAM) for Ukrainian exporters. This appeal is driven by significant risks to Ukraine's war-torn economy. Without a transitional arrangement, the full implementation of CBAM could lead to losses of at least 200 million euros by the end of this year.

Impact and Risks

The CBAM would impose an additional EU fiscal charge of 86–100 euros per tonne of emissions. Forecasts indicate that if the mechanism is implemented, Ukraine could lose up to $5 billion in export revenue over the next five years. This is a critical threat, as approximately 80% of Ukrainian metal is exported to the EU, and the mining and metallurgical sector accounts for up to 7% of GDP, 15% of exports, and nearly 30% of freight traffic.

The following industries fall under the CBAM mechanism:

• Metallurgy
• Cement industry
• Chemical industry
• Aluminum production
• Electric power industry

CBAM-covered goods account for about 2% of Ukraine's GDP. A new proposal from the European Commission to strengthen CBAM does not include an exemption for Ukraine. According to Stanislav Zinchenko, Director of GMK Center and Head of the EBA Industrial Ecology Committee,

“Ukraine remains the largest exporter of CBAM-covered goods to the EU by physical volume.”

The USPP proposes several immediate steps:

• Activating high-level political negotiations with the EU
• Demanding a transitional or special CBAM regime for Ukraine
• Establishing a joint Ukraine-EU technical group to assess the mechanism's impact
• Engaging European business associations for support
• Developing a state support package for affected exporters

These measures are considered vital for maintaining the stability of the Ukrainian economy under CBAM.

The introduction of CBAM could severely complicate the situation for Ukrainian exporters already struggling due to the war. The EU is Ukraine's largest trading partner, making these negotiations crucial for the nation's economic resilience. Accelerating talks with the EU and finding compromise solutions are now critical to preserving export revenues and supporting key industrial sectors. Given the Ukrainian economy's heavy reliance on exports, particularly to the EU, the outcome of these negotiations will have long-term consequences for its stability.