The European Commission is ready to postpone the carbon tax for Ukraine if there is an official request
The European Commission is ready to postpone the full implementation of the EU Border Carbon Adjustment Mechanism (CBAM) for Ukraine until February 1, 2027. This was reported by and, the German edition of Tagesspiegel.
An official decision has not yet been made, as Ukraine must submit a request, which has not yet been done.
The CBAM envisages that producers from outside the EU will pay for carbon dioxide emissions to level the playing field with European companies already operating under a carbon tax.
But Ukraine does not have a system for monitoring emissions in products, so high standard rates will be applied, making Ukrainian products less competitive.
Postponing the CAA could give Ukraine time to adapt, especially in a time of war when infrastructure is destroyed, the power grid is more than 70% out of commission, and businesses have limited access to resources.
The biggest losses from the CBA are expected for the Ukrainian metallurgy, which accounted for 15% of merchandise exports in 2024.
According to estimates, the introduction of the DCFTA could reduce exports to the EU by 40%, which equates to a loss of $1.6 billion.
Thus, without a temporary exemption from the CBA and access to European decarbonization funds, tens of thousands of Ukrainian workers may lose their jobs.
In addition to metallurgy, cement and fertilizer producers will also suffer. In the absence of free EU certificates, Ukrainian cement plants may stop exporting to Europe altogether.
In 2024, Ukraine exported 19,000 tons of cement to Germany and fertilizers worth more than €28 million, including to Central Europe.
The Ukrainian League of Industrialists and Entrepreneurs called on the EU to introduce a special status or a transitional model of the DCFTA for Ukraine, given the martial law.
At the same time, Ukraine's trade representative Taras Kachka confirmed in early June that the Cabinet of Ministers was preparing a request for a delay to the EU Commission. It is not yet known when the document will be submitted to the European Commission .
- The European Union continues to implement the Carbon Border Adjustment Mechanism (CBAM).
- In February, the European Commission proposed to exempt the vast majority of companies from paying the CBAM, as they are responsible for only 1% of emissions under this initiative.
