15:29 08.06.2021

EU to take special approach in applying CBAM to Ukraine – trade representative

3 min read
EU to take special approach in applying CBAM to Ukraine – trade representative

The European Union will take a special approach when applying the carbon border adjustment mechanism (CBAM) to Ukraine, Deputy Economy Minister, Trade Representative of Ukraine Taras Kachka has said.

"The main result of the negotiations [of the Ukrainian delegation] with the European Commission is that a special approach will be applied to Ukraine. It is not yet clear how it will look if based on the CBAM documents, which appeared at the disposal of the media," Kachka said in a comment to the Green Deal portal at the Ukraine 30. Ecology forum.

He said that the EU's position on CBAM in relation to Ukraine depends on the readiness of the emission trading scheme (ETS) within the country.

"This scheme is being prepared, it will be launched in 2025-2026. The sooner we come to it, the better," he said.

At the same time, Kachka said that Ukraine has undertaken obligations to introduce ETS and the country is already levying a carbon tax (UAH 10 per tonne of CO2). This, he said, puts Ukraine in the hierarchy of countries with greater equivalence in the context of carbon regulation, in contrast to its closest neighbors, where there is neither a carbon tax nor a desire to create an ETS.

Deputy Minister of Ecology and Natural Resources of Ukraine Iryna Stavchuk said in a comment to Green Deal on the sidelines of the forum that before the launch of the ETS, it takes several years to test the Monitoring, Reporting and Verification (MRV), which was launched early 2021.

"To plan the ETS, one first need to receive reports from enterprises for several years to understand how much CO2 emissions each of them generates. It is necessary to proceed from something when forming emission permits for enterprises under the ETS," the Deputy Minister said.

According to her, in the first quarter of 2022, enterprises will start filing emission reports.

In addition, Stavchuk said that the primary factor in Ukraine's adaptation to CBAM is carbon pricing. After setting the price for emissions, it is necessary to make a decision on the mechanism for paying this price.

"For example, if we talk about the carbon tax, then first it needs to be raised when at the political level everyone is ready to pay for emissions, and only then switch to regulating more complex elements. In any case, the ETS will not help us in any way in the fight against CBAM if there is a zero price for emissions," Stavchuk said.

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