The National Association of Mining Industry of Ukraine (NADPU) and leading players in the mineral resource market are urging the Ukrainian government to urgently initiate negotiations with the European Union regarding the mitigation or postponement of the CBAM (Carbon Border Adjustment Mechanism). In a letter addressed to the head of the Verkhovna Rada Committee on Environmental Policy and Natural Resource Management, Oleg Bondarenko, it is emphasized that this mechanism could create additional barriers for Ukrainian enterprises and worsen the country’s economic situation.
This is reported by Business • Media
According to an analysis published by GMK Center, due to the implementation of CBAM, Ukraine could lose over $7.2 billion in GDP by 2030, including more than $1.3 billion in the metallurgy sector, which is the country’s main export sector and a significant taxpayer. The application of this mechanism could lead to a halt in the export of cement, fertilizers, pig iron, square billet, and rebar after 2030, significantly reducing the trade opportunities for Ukrainian producers.
The Importance of the European Market for the Ukrainian Economy
«The European market is vital for Ukrainian producers affected by the war. Exports help sustain production, employment, and the local economy, while the domestic market has significantly contracted,» the letter states.
According to experts, the implementation of the CBAM mechanism will exacerbate the negative consequences of the war, reduce export opportunities, and worsen the state of the country’s economy. At the same time, Ukraine may have the opportunity to support the ‘green’ transition through participation in global environmental initiatives; however, it currently needs to seek a postponement of the implementation of this mechanism in accordance with Article 30.7 of Regulation (EU) 2023/956 of the European Parliament and Council of the EU dated May 10, 2023.
NADPU and market participants emphasize the importance of active negotiations with EU authorities, particularly with the Ministry of Economy, Ministry of Environmental Protection, and Ministry of Foreign Affairs, to avoid serious economic losses and preserve Ukraine’s export potential in metallurgy and other strategic sectors.