12.08.2026
During Energy Club’s expert online discussion “CBAM and Electricity Trade between Ukraine and the EU: Risks, Practical Challenges and the Market Position”, Maksym Nemchynov, Vice President of Energy Club and Deputy Minister of Energy of Ukraine in 2020–2021, emphasized that CBAM is a difficult but inevitable issue for Ukraine in the context of European integration.
According to him, the topic of CBAM may seem somewhat paradoxical for Ukraine’s energy sector in wartime conditions. However, since Ukraine has chosen the path toward the European Union, it must take into account the rules, standards and legislation already in force in the EU.
“We want to be in Europe, we want to be a member of the EU, and therefore we have to comply with the rules, standards and legislation that already exist in the EU,” Maksym Nemchynov said.
He stressed that CBAM may have a significant impact on Ukraine’s electricity sector. Although Ukraine is currently effectively a net importer of electricity, the potential of the Ukrainian power system remains significant and depends on the course of the war, attacks on energy infrastructure and the pace of recovery.
Maksym Nemchynov noted that Ukraine has recently made some progress in communication with the European Commission. According to him, the discussion is gradually moving from the question of whether a special exemption for Ukraine is possible to a more practical set of solutions.
Among such solutions, he mentioned a special approach for a candidate country, accelerated verification of actual emissions, the launch of a national emissions trading system, changes to electricity rules, and negotiations on mitigating the consequences for industrial exports.
He also focused on the issue of a national emissions trading system. According to Maksym Nemchynov, the implementation of relevant legislation could help Ukraine form an internal CO₂ price and potentially reduce the impact of CBAM by taking into account the carbon price paid in Ukraine.
At the same time, he emphasized that Ukraine is unlikely to fully avoid CBAM. A more realistic path, in his view, could be a deferral or mitigation of its application, taking into account Ukraine’s status as a candidate country and the ongoing military conflict.
“Of course, we would like to cancel CBAM completely, but this is unrealistic. At the same time, there is an option to partially defer its application,” Maksym Nemchynov said.
He also drew attention to the specific application of CBAM to electricity. According to him, electricity is directly included in the CBAM sectors, but the rules for electricity are more complex than for material goods. A particular risk is that embedded emissions may be calculated using default values based on electricity generation from fossil fuels.
Such an approach may limit the value of decarbonized generation and overestimate the real carbon footprint of Ukrainian electricity.
In Maksym Nemchynov’s view, it is fundamentally important for Ukraine that electricity is assessed on the basis of actual values rather than average or default indicators. This is especially important given the significant role of nuclear, hydro and other low-carbon generation in Ukraine’s energy mix.
“We want actual values to be used. In the medium term, nuclear and low-carbon generation may become a real advantage for Ukraine if the EU recognizes actual data,” he noted.
Maksym Nemchynov also said that, in the short term, Ukraine’s main export risk is currently concentrated not in electricity, but in industrial goods covered by CBAM. At the same time, the energy sector has considerable potential, and therefore the rules for applying CBAM to electricity need to be addressed now.
Summing up, he noted that Ukraine should work in several directions at once: seek a deferral or mitigation of CBAM application, ensure the possibility of calculating actual emissions, develop a national emissions trading system, and create tools that will allow Ukrainian electricity to remain competitive on the European market.
Returning to the topic at the end of the discussion, Maksym Nemchynov emphasized that work on CBAM began back in 2020–2021, when many believed that there was still enough time before the full launch of the mechanism.
“Unfortunately, today we have not completed the homework that we should have done. Yes, there are objective reasons – the war, and our energy mix is changing faster than any legal norm can be written. But we still have to work on this,” Maksym Nemchynov said.
According to him, Ukraine can refer to force majeure and expect certain preferences or deferrals, but this does not remove the need to complete its internal work.
“We have to do what we must, and strive to make it work in a way that is beneficial for us,” Maksym Nemchynov concluded.
