![](\"https:\/\/eba.com.ua\/wp-content\/uploads\/2020\/03\/Olga_Boiko.png\")
\n\n\t\t\t\t\t\t\tOlga Boiko<\/span>\n\t\t\t\n\t\t\t\t\t\t\tEBA Industrial Ecology, and Sustainable Development Committee Coordinator<\/span>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\tThe EBA business community supports Europe\u2032s climate aspirations to become the first carbon-neutral continent, expressed in the European climate ambitions to become the first carbon-neutral continent according to the European Green Deal. Thus, Ukraine was one of the first countries to join that roadmap of actions. A few months ago, Ukraine adopted the Second Nationally determined contribution under the Paris Agreement, to reduce its greenhouse gas emissions by 65 percent by 2030 from the 1990 levels. Therefore, our targets are more ambitious than the previous ones and even than the current commitment of the EU and other developed countries, despite we don\u2019t have such a financial mechanism to make it real at the moment. I am convinced that the CBAM, as one of the tools offered by the EU to encourage importers to reduce CO2 emissions, should not be used as an instrument to increase inequality between countries, but motivate the partners to explore additional ways to cooperate in decarbonization projects.\n\t\t\t<\/blockquote>\n\t\t\t\t\n\t<\/div>\n\nThe EU now has an understanding of the targets and next steps towards climate neutrality. Meanwhile, the urge of combating climate change and the economic realities of European and Eastern Partnership countries, in particular, the Associated Trio (Ukraine, Georgia, and Moldova) differ significantly. In this context, the Carbon Border Adjustment Mechanism (CBAM), which is a part of the Fit for 55 Package to be launched in 2023, is the subject of much debate. With the CBAM, the European Union wants to align the “rules of the game” for domestic and European producers and encourage other countries to reduce greenhouse gas emissions more decisively.<\/span><\/p>\n
At the same time, the EU identifies Ukraine as one of the countries most affected by the CBAM implementation. Thus, the \u0421\u0412\u0410\u041c will initially apply to 4 sectors: steel, cement, basic organic fertilizers, and electricity (with the possibility of further expansion to other sectors). The average price of the CBAM Certificate that importers will need to purchase will be calculated weekly, based on average GHG allowance prices in the framework of the European market of emission allowances (EU ETS). The additional burden on imports from Ukraine will amount to hundreds of millions of euros annually according to the EBA estimates based on the average carbon price per ton, as well as the share of imports to the EU. At the initial stage of implementation, the CBAM will impose a burden of \u20ac 2.1 million on the cement industry, \u20ac 48.5 million on the chemical industry, and \u20ac 628.3 million annually on metallurgy.<\/span><\/p>\n
At the same time, the EU plans to cooperate and conclude agreements with non-EU major trading partners, given their pricing mechanism for CO2 emissions. Such agreements may provide for a more lenient environment for the implementation of the CBAM, provided that these countries are highly efficient and demonstrate a desire to decarbonize economic sectors. For example, the CBAM may not be not applicable to exports of electricity from Ukraine if the following requirements are met: integration of the Integrated Power System of Ukraine to the pan-European power system ENTSO-E, coupling of electricity markets; enhancement of the regulatory framework that creates opportunities for increasing the renewable energy share in the energy system; rejection of electricity imports from third countries that have no appropriate decarbonization targets; introduction of an emissions trading scheme for electricity in Ukraine at a price equivalent to that of the EU ETS must be completed by 1 January 2030, etc.<\/span><\/p>\n