“photo ua.depositphotos.com The Ukrainian Union of Industrialists and Entrepreneurs (USPP) appealed to the government to intensify negotiations with the European Union and to agree on the postponement of the mechanism of cross-border…”, — write: www.unian.ua
photo ua.depositphotos.comThe Ukrainian Union of Industrialists and Entrepreneurs (USPP) appealed to the government to intensify negotiations with the European Union and to agree on the postponement of the cross-border carbon adjustment mechanism (CBAM) for Ukrainian exporters. The organization emphasizes: the full implementation of CBAM without a transitional regime during the war creates serious risks for the economic stability of the country, and losses will amount to at least 200 million euros by the end of the year.
The USPP notes that the additional fiscal burden from the EU in the amount of €86–100 per ton of emissions sharply worsens the competitiveness of Ukrainian producers. This is especially noticeable for the industry, which works in conditions of destroyed energy, logistics and loss of part of the production capacities, GMK-Center writes.
According to the estimates of specialized analytical centers, due to the action of CBAM, Ukraine may lose up to $5 billion in export revenues within five years. The risks are critical given the fact that about 80% of Ukrainian metal is exported specifically to the EU, and the mining and metallurgical complex forms up to 7% of GDP, 15% of exports and almost 30% of transport traffic. In addition to metallurgy, the mechanism applies to the cement, chemical industries, aluminum production, and the electric power industry.
The USPP emphasizes that in the conditions of a full-scale war, Ukrainian enterprises do not have the opportunity to quickly invest billions of euros in decarbonization. Therefore, the organization considers the postponement or special regime of application of CBAM for Ukraine one of the key tasks of economic diplomacy.
Among the priority steps, the USPP proposes to intensify political negotiations with the EU, seek a transitional or special CBAM regime, create a joint Ukraine-EU technical group to assess the real impact of the mechanism, involve European business associations and, in parallel, develop a state support package for exporters.
As you know, the new European Commission proposal to strengthen the CBAM mechanism still does not provide for an exception for Ukraine, despite the war. The European Commission stated that the impact of the SVAM on the Ukrainian economy will be “minimal”. But these estimates are detached from reality, says Stanislav Zinchenko, director of the GMK Center and chairman of the EBA Industrial Ecology Committee: Ukraine remains the largest exporter of CBAM products to the EU in terms of physical volumes. In general, CBAM products provide about 2% of Ukrainian GDP.
Earlier, Ukrainian business ambassador and economic expert Andriy Zablovskyi said that despite the formal refusal of the European Commission to postpone the introduction of the SVAM ecocommittee for Ukraine, we still have a full and legal right to such a postponement, so we should intensify negotiations with the European Commission in order to realize this right.
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