Energy Club Addresses the Prime Minister of Ukraine Regarding CBAM Risks for the Energy Sector

08.04.2025

Energy Club, a leading association of energy companies in Ukraine, has sent an official letter to the Prime Minister of Ukraine, Denys Shmyhal, expressing deep concern about the potential negative consequences of the implementation of the Carbon Border Adjustment Mechanism (CBAM) by the European Union for the Ukrainian economy and energy sector.

The letter emphasizes that CBAM, essentially acting as a carbon barrier for imports of goods to the EU, creates significant challenges for Ukrainian producers and exporters, especially in the electricity sector. This may threaten their competitiveness in the European market and lead to substantial financial losses.

These issues were actively discussed during the online meeting of Energy Freedom by Energy Club on March 28, 2025, where key experts and business representatives concluded that there is an urgent need for action to protect national interests.

Among the key challenges noted in the letter:

• High share of carbon-intensive goods exports from Ukraine and significant dependence of the energy sector on fossil fuels.
• Objective obstacles to rapid adaptation to CBAM requirements, caused by destruction of energy infrastructure due to military actions and the need for significant investments for modernization.

Given these circumstances, Energy Club urges the Government to take immediate measures:

• Initiate negotiations with the European Commission at the highest level to obtain a temporary deferral for Ukraine from the application of CBAM, taking into account the special circumstances of war and the country’s efforts towards decarbonization.
• Intensify work on adapting national legislation to EU requirements in energy and environmental fields, particularly regarding the implementation of an emissions trading system, while minimizing the negative impact on the competitiveness of domestic producers.

Energy Club is convinced that timely response to CBAM challenges is critically important for the sustainable development of Ukrainian energy and its successful integration into the European energy space.

The appeal was prepared by a working group of representatives from Energy Club member companies.