The EU Implements the Carbon Border Adjustment Mechanism (CBAM): How It Will Affect Ukrainian Exports

As of January 1, the cross-border Carbon Border Adjustment Mechanism (CBAM) officially came into effect in the European Union, which entails a charge for the carbon footprint of imported goods. From now on, importers to the EU must purchase special certificates corresponding to the volume of CO₂ emissions during the production of the goods supplied to the European market.

This is reported by AgroReview

What is CBAM and Why Is It Important for Exporters

CBAM (Carbon Border Adjustment Mechanism), known in translation as СВАМ, is a new European import tariff mechanism for goods whose production is associated with significant CO₂ emissions. Such goods include, in particular, steel, cement, and electricity. The introduction of CBAM is part of the “European Green Deal” and aims to accelerate the transition of EU industries to cleaner technologies. The main idea is to level the playing field: European manufacturers incur costs to meet environmental standards, while imports from countries with less stringent requirements remain cheaper. To eliminate this inequality, the CBAM mechanism was developed by the European Commission in 2019–2020 and approved in 2022.

Consequences for Ukraine: Economic Risks and Losses

In July 2025, Ukraine submitted a request to the European Commission for a postponement of the CBAM implementation for Ukrainian exporters and provided all necessary documents. However, as of the beginning of the year, no decision had been made in Brussels. Consequently, starting January 1, Ukrainian companies exporting goods to the EU are required to pay the carbon tariff.

“According to the Federation of Employers of Ukraine, in 2023, Ukrainian exports of goods to the EU affected by CBAM amounted to $3.6 billion — this is 9.9% of all exports from Ukraine.”

In particular, in 2023, the share of exports to the EU was 78.3% for electricity, 80.7% for aluminum, 82.5% for ferrous metals and metal products, 86.5% for cement and cement clinkers, and 90% for fertilizers.

According to analytical forecasts, in the first year of the tariff’s implementation, Ukraine’s GDP may decrease by 4.8%, and the volume of goods exported to the EU may decline by 7.8%. Tax revenues to the budget could decrease by $2.8 billion per year, and due to reduced business activity, the country risks losing up to 73,100 jobs. If the situation does not change, by 2030–2035, total employment losses could reach 120,000 workers, and budget revenues could fall by $3.6 billion.

In addition to direct economic risks, businesses also note potential indirect threats. In particular, the closure of the European market to importers from third countries may force them to seek new markets, one of which could be Ukraine.