CBAM and Ukraine: Impact on Ukraine’s Electricity Sector and the Role of Emissions Trading and Carbon Pricing
On April 25, 2024, an expert discussion that brought together key stakeholders was held on the potential impact of the Carbon Border Adjustment Mechanism (CBAM) on the Ukrainian electricity sector.
Ukraine faces a number of stringent criteria for exempting electricity exports to the EU from taxation, so on April 25, 2024, an expert discussion was held on the potential impact of the Carbon Border Adjustment Mechanism (CBAM) on the Ukrainian electricity sector. The event brought together key stakeholders, including representatives of the Ministry of Environmental Protection and Natural Resources of Ukraine, the Ministry of Energy of Ukraine, the EU Delegation to Ukraine, the Energy Community Secretariat, the expert community, and representatives of donor projects.
The participants of the meeting discussed the potential impact of the Carbon Border Adjustment Mechanism (CBAM) on the Ukrainian electricity sector, as well as practical steps to exempt exported electricity from taxation and methods to facilitate Ukraine’s adaptation to this mechanism. Another important focus of the discussion was the creation of an ambitious emissions trading system (ETS) and carbon tax reform in the process of obtaining tax exemption for electricity exports to the EU under the CBAM mechanism. These mechanisms will help encourage exporters of carbon-intensive goods to switch to greener production methods.
The Ministry of Environmental Protection and Natural Resources of Ukraine is working closely with the EU and stakeholders to develop mechanisms to mitigate the impact of CBAM. Today’s expert discussion is the beginning of a cross-sectoral dialog. It will help to develop valuable recommendations for the Ukrainian authorities that will contribute to the effective implementation of reforms.
Next week, MEPR will start discussions on the ETS, and a discussion on decarbonization is planned to be held during the summer, so today’s event laid the foundation for a sustainable climate dialogue involving all stakeholders.
The expert discussion “CBAM and Ukraine: Impact on Ukraine’s Electricity Sector and the Role of Emissions Trading and Carbon Pricing” was jointly organized by the Ministry of Environmental Protection and Natural Resources of Ukraine, the Ministry of Energy of Ukraine, the Low Carbon Ukraine project and the Ukrainian Climate Office within the framework of the Capacity for Climate Action (C4CA) Project.
The “Capacity for Climate Action” (C4CA) project / Ukrainian Climate Office is implemented by GIZ , commissioned by the German Federal Ministry for Economic Affairs and Climate Action (BMWK) under the International Climate Initiative (IKI) and co-financed by the European Union.