Set to launch in 2026, CBAM will require companies to buy certificates covering the carbon content of their imported products from certain sectors, with the goal of enabling EU producers of similar products to compete more equally with producers from countries with less restrictive carbon constraints.
In its report, GMK Center said that the mechanism – and its impact on the gradual phaseout of free allowances under the EU ETS by 2034 – will create additional obstacles for Ukrainian companies exporting goods to the EU.
“If in the first year of full CBAM introduction, Ukraine will lose USD 202m of exports,” the report said, noting that losses could rise to USD 1.4bn in 2030.
It noted that export losses for Ukraine’s iron & steel industry could reach USD 1.3bn, as 93% of the country’s exports falling under CBAM regulation are products from these sectors.
Ukrainian exports falling under the CBAM regulation amounted to USD 3.6bn last year, according to the consultancy.
As a result, it argued that Ukraine may stop exports of cement, fertilisers, pig iron, billets and long steel products after 2030.
CBAM will initially apply to companies importing aluminium, cement, fertilisers, hydrogen, iron, steel and electricity into the EU.
Additional losses
GMK argued that gross domestic product (GDP) losses for Ukraine could be even greater as a result of CBAM, considering “intersectoral links” in the Ukrainian economy.
“In 2026 Ukraine could lose up to USD 790m of GDP due to CBAM. In 2030, GDP losses could be up to USD 4.9bn,” the report suggested.
Additionally, tax losses for Ukraine may reach USD 910m by the end of the decade, given that steel companies are the country’s biggest taxpayers, it said.
“CBAM may deteriorate state of Ukrainian economy. Such situation contradicts the strategic interests of the EU, which supports Ukraine,” GMK argued.
“Maintaining trade relations with the EU will allow Ukraine to integrate further into the European economy and will support [the] financial abilities of the state budget now.”
source: montel news
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