Ukraine may become one of the beneficiaries of the green transition

Georg Zachmann , Scientific Lead, Green Deal Ukra ї na , told Interfax-Ukraine about the assessment of the impact of the CBAM implementation on the structure of the Ukrainian economy.

Text: Oksana Gryshyna

The main vector of Ukraine's development is European integration. This is both an opportunity and a challenge, as our producers have to look for niches and competitive advantages in the EU market in the face of a critical shortage of resources and growing risk factors. Can the CBAM (Carbon Border Adjustment Mechanism) be considered a risk factor for Ukraine's economy?

In the short term, CBAM is a kind of limited challenge in several sectors. I expect that Ukraine will be able to adapt, but we may see some trade deviation from the EU. For example, Ukraine currently exports certain steel products to the EU, and if these become uncompetitive in the EU because of the CBAM, Ukraine may redirect exports these products to Turkey or other markets. In general, we expect only some reshuffling of global trade in these carbon-intensive products, which from the perspective of integration with the EU may not be very useful for Ukraine, as it will mean that Ukraine will export them to other countries rather than to the EU. But the impact will be, as I said, very limited, for a few sectors.

A much bigger challenge may come in the long run, when CBAM becomes more comprehensive and complex. And we already see these trends, the European Commission has already proposed its first ideas to expand the scope of CBAM to additional sectors.  In this case, it may become a bigger problem for Ukraine, as more and more sectors will be covered.

When we want Ukraine's integration into the EU, we also want Ukraine to be more