Ukrainian industry warns that CBAM could reduce exports by $5 billion over five years

The Ukrainian Union of Industrialists and Entrepreneurs (UUPP) has warned that applying the EU Carbon Border Adjustment Mechanism (CBAM) to Ukraine without a transitional regime could pose serious risks to the country's economic stability during wartime.

According to the association, any additional fiscal burden on Ukrainian exports may have systemic consequences in the current conditions of a full-scale war. The group noted that three years ago it warned that the launch of a new environmental tariff during the war would disproportionately affect the Ukrainian industry, and that these risks are now beginning to materialize.

Carbon costs and operational constraints place a heavy burden on producers

The USPP stated that CBAM is already affecting production, with additional carbon-related costs estimated at €86-100 per ton of emissions. These fees create unequal competitive conditions for Ukrainian producers who operate against the backdrop of damaged energy infrastructure, destroyed industrial assets, disrupted logistics and labor shortages.

The Association stressed that companies currently lack the financial and operational capacity to carry out rapid modernization or major investments in reducing emissions. Such transitions will require billions of dollars and several years of stable working conditions, while companies are currently focused on maintaining production, preserving jobs, and providing logistics.

Steel