The European Carbon Adjustment Mechanism (CBAM) could result in Ukraine losing $1.39 billion in exports in 2026-2027. The metallurgical sector is most at risk, and the share of exports to the EU, according to analysts, could fall to 41%.
CBAM: a new challenge for the Ukrainian economy
The European carbon import adjustment mechanism (CBAM) is already posing serious risks to Ukrainian exports. According to the Institute for Economic Research and Policy Consulting, the CBAM could cost Ukraine $1.39 billion in exports in 2026-2027.
The metallurgical sector will bear the brunt of the impact. Experts estimate that the losses in this sector alone could reach $1.24 billion. As the EU remains the main market for Ukrainian steel products, the new eco-duties will be a serious challenge for the country's entire industry.
Exports to the EU are under threat
The European Union is Ukraine's key trading partner: it accounts for 68% of exports of goods subject to the CBAM. The introduction of the eco-duty could lead to a reduction in supplies to the EU by up to 41%, according to the Institute for Economic Research and Policy Consulting.
This decline in exports will have not only financial but also structural consequences for the economy. The decline in trade with the EU will affect employment, foreign exchange earnings, and tax revenues in Ukraine.
Negotiations with the EU: the situation remains uncertain
Ukraine is currently negotiating with the European Union on a possible postponement or mitigation of the CBAM implementation for Ukrainian producers. However, the outcome of these negotiations is still unknown, and the risks for the industry are growing.
The absence of clear agreements means that Ukrainian companies should start preparing for the new trade conditions now. Without a postponement, the CBAM could become a serious barrier for Ukrainian goods to enter the European market.
Why it matters
The introduction of CBAM has a systemic effect on the entire Ukrainian economy. The loss of a major market and serious financial losses could complicate the country's recovery and hamper industrial development.
For Ukrainian producers, this means the need to modernise production, reduce their carbon footprint and look for alternative markets. The government needs to strengthen its dialogue with the EU and seek compromise solutions.
The situation with CBAM will be crucial for the future prospects of Ukrainian exports and competitiveness in the global market.
