13.08.2026
During Energy Club’s expert online discussion “CBAM and Electricity Trade between Ukraine and the EU: Risks, Practical Challenges and the Market Position”, Oleksii Lastovets, Head of Trading in Ukraine at Axpo Ukraine, presented the practical view of electricity traders on the impact of CBAM on exports from Ukraine to the European Union.
According to him, CBAM is not a new topic for companies working at the EU border. Market participants have been aware of the mechanism since 2024, as import and export operations have already been accompanied by preliminary reporting.
“CBAM is not something new. All traders working at the border with Europe have known about CBAM since 2024,” Oleksii Lastovets said.
At the same time, he emphasized that Ukraine has not yet received the expected deferral of CBAM application. In his view, without such a decision, full-scale exports of Ukrainian electricity to the EU will be extremely difficult from an economic point of view.
“Without a CBAM deferral for Ukraine, unfortunately, it will be very difficult to speak about electricity exports,” Oleksii Lastovets stressed.
He explained that CBAM effectively works as an additional duty or carbon burden for goods and electricity from third countries supplied to the European Union. For electricity, this means that for every megawatt-hour exported from Ukraine to the EU, the importer must take into account the cost of CBAM certificates.
Oleksii Lastovets gave an example in which the cost of emissions in the EU is above EUR 80 per tonne of CO₂, while a coefficient close to one is applied to Ukraine. According to him, this creates a significant additional burden on export operations.
“For every megawatt exported from Ukraine to the European Union, the cost of CBAM must effectively be taken into account. A fossil-fuel coefficient is applied to Ukraine, and this is a major problem,” he noted.
One of the key problems, according to Oleksii Lastovets, is that Ukraine has not yet managed to properly demonstrate its actual energy mix to European partners. In his view, this may lead to Ukrainian electricity being assessed with an inflated carbon coefficient, without proper consideration of the share of nuclear, hydro and renewable generation.
“We have not even managed to prove our energy mix in a way that would be taken into account,” Oleksii Lastovets said.
He also drew attention to the need to launch an emissions verification system. According to him, Ukraine must identify and agree with European partners who can verify generating facilities and what the verification procedure should look like.
Oleksii Lastovets emphasized that this is a complex and lengthy process that will require changes in legislation, approaches to verification, electricity purchasing mechanisms and cooperation with European counterparties.
He also focused on the issue of direct electricity purchases from producers. According to him, under the European logic of confirming the origin of electricity, a direct contract with a specific generating unit may be required. However, in practice, this creates difficulties for non-residents, who would need to purchase electricity directly from a Ukrainian producer, nominate it and export it to the EU.
“There is a very large work plan here, and many changes need to be made – in the emissions trading system, in verification and in electricity purchasing methodologies,” Oleksii Lastovets said.
Among the first necessary steps, he named a political decision on a CBAM deferral for Ukraine. In his view, this would allow Ukraine to preserve at least some ability to export electricity to the EU.
“The simplest solution now is to obtain a political deferral for Ukraine by all possible means. This would help export at least some electricity from Ukraine,” he stressed.
The second important step, according to Oleksii Lastovets, should be to demonstrate Ukraine’s real energy mix to European partners. This would make it possible to reduce the carbon coefficient applied to Ukraine and, accordingly, lower the financial burden on exports.
As a third area, he mentioned the agreement with European partners on verifiers and verification procedures, as well as the launch of Ukraine’s emissions trading system.
During the general discussion, Oleksii Lastovets also suggested separating the issues of CBAM and market coupling. In his view, these are two distinct regulatory tracks that require different approaches.
He emphasized that when implementing market coupling, Ukraine needs to carefully analyze the possible consequences for the domestic market, including prices, producers and consumers. It is particularly important to consider that Ukraine’s current position as a net importer differs from a scenario in which the country could act as a major net exporter of electricity.
“CBAM is CBAM, and market coupling is market coupling. These two tracks need to be separated, and we need to think very carefully about how to move forward,” Oleksii Lastovets said.
According to him, Ukraine must simultaneously protect its own market, support business and develop practical mechanisms that will allow Ukrainian producers and traders to work with the European market without a disproportionate financial burden.
