14.08.2026
During Energy Club’s expert online discussion “CBAM and Electricity Trade between Ukraine and the EU: Risks, Practical Challenges and the Market Position,” Oleksandr Grechko, Head of Regulatory Policy at Ukrhydroenergo, emphasized that the application of CBAM to Ukrainian electricity must take into account the real low-carbon profile of Ukraine’s generation mix.
According to him, CBAM is an instrument of climate policy that Ukraine will inevitably have to work with as part of its European integration path. At the same time, it is important to find a balance between decarbonization, integration into the European market and maintaining the competitiveness of Ukrainian electricity.
“Decarbonization – everyone supports it. European integration – everyone supports it. But at the same time, we need to preserve the possibility of market integration,” Oleksandr Grechko said.
He noted that the introduction of CBAM is already affecting electricity trade in the region. According to him, part of the electricity from the Balkans and other regional markets, including renewable and hydropower generation, has started to shift toward Ukraine, as sales on the EU market become less attractive due to the additional carbon burden.
Oleksandr Grechko stressed that this situation has both positive and negative implications for Ukraine. On the one hand, imports help the Ukrainian power system during periods of deficit. On the other hand, Ukraine’s own low-carbon generation may find itself in a non-competitive position on the EU market if inflated carbon coefficients are applied to it.
According to him, nuclear, hydro and renewable generation account for a significant share of Ukraine’s energy mix. Therefore, calculating CBAM on the basis of an approach oriented toward coal or gas does not reflect the real structure of electricity generation in Ukraine.
“The biggest contradiction is that our green and nuclear generation risks being taxed as coal-fired generation. This is a problem today,” Oleksandr Grechko emphasized.
He noted that regulation provides a number of requirements for confirming the low-carbon origin of electricity. These include a direct contract between the buyer in the EU and a specific power plant, confirmation of supply, an environmental criterion, as well as hourly synchronization of electricity production, purchase and transportation.
According to Oleksandr Grechko, Ukraine can potentially meet some of these requirements. However, the greatest challenge lies in the need for clear hourly confirmation of the entire supply chain and the availability of verifiers who could confirm the origin and characteristics of such electricity.
“To confirm this clean green electricity, we need to confirm, for a specific hour, a specific amount of electricity that was produced, purchased and transported. This is an entire chain. And it must be confirmed by the relevant verifiers, which do not exist today,” he explained.
Oleksandr Grechko also noted that Ukrhydroenergo already receives guarantees of origin for electricity, which confirm production from renewable sources. At the same time, the current CBAM approach does not provide for the automatic use of such guarantees as sufficient confirmation of the low-carbon profile of electricity.
“We are the first company in Ukraine to start receiving guarantees of origin. In fact, this already confirms that we produce electricity from a renewable source. If these guarantees of origin could be treated as confirmation of green electricity, this could help in trade under CBAM, but such a criterion does not currently exist,” Oleksandr Grechko said.
He also drew attention to the risks for market coupling. According to him, trading on the day-ahead and intraday markets involves mixed electricity, which makes it difficult to separate electricity from renewable sources in such a model. This creates additional challenges for the full coupling of the Ukrainian and EU markets.
At the same time, Oleksandr Grechko noted that there are possible ways to address this problem. One of them is to change the calculation methodology so that it takes into account the actual energy mix of a specific country rather than average or inflated indicators.
“If the actual energy mix of the country is taken into account, Ukraine’s CBAM payment indicator may decrease, since clean energy accounts for a significant share of our mix,” he noted.
During the general discussion, Oleksandr Grechko also supported the need for practical work with verifiers and the possibility of verifying Ukrainian electricity generation facilities. In his view, this is what would allow Ukraine to be more competitive on the European market if the actual origin of electricity is confirmed.
He also emphasized the importance of contractual mechanisms. In particular, future PPA contracts should provide for the possibility of adjusting terms in the event of changes to CBAM rules, calculation methodology or verification approaches.
“We need to work with verifiers, change the methodology and provide in PPA contracts for the possibility of such changes, so that no additional obstacles arise at our level,” Oleksandr Grechko concluded.
According to him, Ukraine’s low-carbon generation has the potential to be competitive on the EU market. However, this requires recognition of the actual energy mix, proper verification, clear contractual mechanisms and adaptation of CBAM rules to the specifics of the electricity sector.
