Ukrainian exporters name the main problems with CBAM implementation in Ukraine and the EU shutterstock

Ukrainian exporters name the main problems with CBAM implementation in Ukraine and the EU

Anna Velyka

They called for more attention to be paid to the problem of decarbonization as part of the Green Deal strategy

On July 4, Ukrainian experts and representatives of exporting companies during a roundtable discussion on “The Impact of CBAM on Domestic Exporters” listed the main problems and challenges faced by domestic and European businesses in preparation for the entry into force of the EU's Cross-Border Carbon Adjustment Mechanism (CBAM) in 2026.

This was reported by Interfax-Ukraine.

Representatives of manufacturers and experts have identified a number of problems, including:

1. Lack of accreditation for Ukrainian verifiers

The director of the department of energy ecology and "green" economy of the Federation of Employers of Ukraine, Olga Kulyk, said that she communicated with representatives of enterprises and structures in Europe, which are already collecting information based on reports within the framework of CBAM. That is, currently European companies are already implementing the requirement to verify emissions reports. Unlike them, Ukrainian enterprises have problems in this direction. In particular, they are related to the fact that Ukrainian verifiers must be accredited by the European Commission.

"Verification based on data – time is running out quickly, and we cannot delay these problems. Therefore, the Ministry of Economy together with the Ministry of Ecology will conduct negotiations so that the verification is accredited in the EC. But the issue has not been resolved yet," Kulyk emphasized.

Stanislav Zinchenko, director of the information and analytical center GMK Center, agreed with her and added that currently there is a lack of emission verifiers in the EU, Ukraine and the world.

Oleksandr Kalenkov, the president of Ukrmetalurgprom, considers it necessary to create a competitive market of verifiers in Ukraine so that both local and European companies can work here.

 

2. Lack of a proven reporting procedure

Stanislav Zinchenko argued about this:

"Less than 10% of the 20,000 companies in Germany that were supposed to report on time did so. And in Ukraine, there are also problems with reports, with the methodology. A very raw procedure, a raw experiment, but it is starting to affect Ukrainian companies."

He said that due to force majeure – a full-scale invasion – Ukraine may not be subject to the requirement to submit verified reports from 2026. Instead, domestic entrepreneurs can submit only declarative reports for CBAM, without paying for certificates.

Lyudmila Kripka, executive director of the "Ukrcement" association, agreed with him:

"We have initiated such a procedure, we are not obliged to buy CBAM certificates under circumstances of force majeure. We offer and ask to work within CBAM on a declarative basis"

3. Lack of relevant documentation in Ukraine

Stanislav Zinchenko emphasized that Ukraine does not have a single document regarding CBAM. According to Olga Kulyk, European countries also have certain problems with the uniform regulation of a number of points, with further steps towards the implementation of the "green" initiative. She considers it necessary to create a working group, for the work of which Ukraine needs to receive an invitation.

4. Unpreparedness of Ukrainian companies by 2026

Experts have expressed fears that Ukrainian companies will not be ready to meet the requirements of CBAM by 2026, when it should become operational.

Oleksandr Kalenkov is convinced that the rules of the game for Ukrainian and European companies should be equalized – force majeure conditions should be applied to Ukrainian enterprises.

"It is necessary to take a comprehensive approach to this issue, to take into account the issue of modernization of companies. The Ministry of Environment and the Ministry of Economy are involved in this process, but it is important that there is one center that will manage this process, so that a unified position is communicated to European colleagues," said the head of Ukrmetallurgprom .

According to Stanislav Zinchenko, in the event that the strict requirements of CBAM come into force, Ukraine's losses, if calculated at 2023 prices, may amount to $600 million from the export of pig iron, $640 million from semi-finished products, and $200 million from rolling stock. In general, losses for industrial enterprises may reach a total of $1.5 billion. Other branches of industry are also experiencing losses.

Arzinger partner, head of the practice of energy and natural resources, environmental protection and sustainable development, Anzhelika Livytska said that mainly cement, steel, aluminum, and fertilizers will fall under CBAM. Reports will need to be submitted by May 31 each year, the first time by May 31, 2027 with a report for 2026. Non-reporting carries significant fines, from €10 to €50 for each tonne of emissions.

"The government needs to raise the issue of force majeure for Ukrainian enterprises," she is convinced.

5. Lack of interest of the authorities

Experts and business representatives are convinced that the Ukrainian government is not doing enough to help Ukrainian companies prepare for CBAM. In their opinion, he, as well as relevant ministries, should play a more active role in providing information and supporting Ukrainian companies in this matter.

"It is important for the government to join the process, to pay more attention to it," Oleksandr Kalenkov emphasized.

He noted that European companies receive certain subsidies for their development and modernization from this eco-initiative.

"We do not see the interest of either the government or the ministries, which should conduct constant negotiations. And the EU is surprised why Ukraine does not take an active part in this process. Unfortunately, some government employees believe that this is a business problem, not the Cabinet's." – stated Stanislav Zinchenko.

6. Protectionism

Separately, Stanislav Zinchenko emphasized that the European Union protects its markets by implementing the CBAM mechanism. In the future, similar mechanisms will be implemented in other countries, such as the United Kingdom, the United States, and Australia.

"This is a new wave of protectionism, it is "green" protectionism, and it will spread across the planet. It will lead to the reformation of flows, but it will also help reduce emissions," he said.

Earlier EcoPolitic talked about the serious barriers created for global trade by the introduction of CBAM.

We also wrote about measures to save the Ukrainian economy after the introduction of the cross-border carbon adjustment mechanism (SVAM) offered by domestic business.

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