Effective Emissions Management in CBAM Sectors Opens Doors to the EU Market
At a UABIO webinar dedicated to the Carbon Border Adjustment Mechanism (CBAM), Andrii Kitura, Development Director of DiXi Group and Head of the Green Transition Office at the Ministry of Economy, Environment and Agriculture of Ukraine, presented an analysis of challenges and recommendations for Ukrainian businesses in the context of CBAM implementation.
In 2024, 13.4% of Ukraine's exports to the EU consisted of CBAM goods – primarily iron and steel, as well as cement and fertilizers. Despite the war, Ukraine remains the largest exporter of CBAM goods by physical volume, ranking 9th among iron and steel exporters to the EU and 3rd in cement exports.
"This demonstrates the strategic importance of Ukrainian business adaptation to CBAM requirements for maintaining competitiveness in the European market in terms of the number of declarants," noted Andrii Kitura.
The speaker provided detailed insights into the new CBAM simplification package – the Omnibus Simplification Package. The new de minimis threshold exemption will reduce the number of importers within scope from 200,000 to 18,000, while retaining 99.27% of emissions within scope. According to DG Taxud data, this will deliver cost savings of €1.1 billion for importers and €87.5 million for public authorities, resulting in a net benefit of €1.189 billion from the proposed new de minimis threshold.
By the end of 2025, the European Commission will present a Review Report evaluating the possibility of extending CBAM's scope to other EU ETS sectors (refineries/chemical plants, paper industry), indirect emissions (ferrous metallurgy, aluminum, hydrogen), and downstream products. Legislative proposals for CBAM expansion can be expected in 2026.
As an example of successful national adaptation strategy to CBAM and carbon pricing, Andrii Kitura presented Turkey's Industrial Decarbonization Investment Platform (TIDIP), which, with EBRD support, aims to attract $5 billion in investments by 2030 for decarbonizing the steel, aluminum, cement, and fertilizer sectors, leading to an annual emissions reduction of over 20 million tonnes of CO2-eq.
Ukraine could adopt the experience of other countries, particularly Turkey, and mobilize IFI resources for industrial decarbonization. The Green Transition Office has developed Marginal Abatement Cost Curves (MACC) for Ukraine's agricultural sector and cement industry, which demonstrate concrete decarbonization pathways with emissions reduction cost calculations.
Concluding his presentation, Andrii Kitura formulated four key recommendations for Ukrainian companies: quality greenhouse gas emissions monitoring (minimum scope 1 and scope 2), development of comprehensive decarbonization strategies for the next 10+ years, establishing long-term cooperation with international financial institutions, and proactive dialogue with the Government.
"It is essential to use shadow carbon pricing when evaluating investment projects, secure grant financing for conducting feasibility studies, and establish dialogue with the Government regarding the launch of sector-specific decarbonization support programs," concluded the Head of the Green Transition Office.
The webinar is part of the project "Technical Assistance for Export of CBAM Goods from Ukraine to the EU," implemented with support from the Ministry of Foreign Affairs of the Kingdom of the Netherlands. The event was organized by UABIO.
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