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Ukrainian Business and Trade Association

UBTA

The UBTA is an independent platform of the Ukrainian export-oriented companies and sectoral business associations, representing a consolidated position and interests of its members at the EU institutions, EU Member States governments and their diplomatic representations at the EU, as well as selected European business associations and individual companies with trading ties and interest in Ukraine.

Lobbying Activity

Meeting with Chris Uregian (Cabinet of Vice-President Margaritis Schinas), Natasha Bertaud (Cabinet of Vice-President Margaritis Schinas)

18 May 2022 · Ukrainian reconstruction

Meeting with Michael Hager (Cabinet of Executive Vice-President Valdis Dombrovskis)

30 Mar 2022 · Current trade issues EU-Ukraine

Meeting with Virginijus Sinkevičius (Commissioner) and

22 Mar 2022 · To discuss the state of play in trade relations with Ukraine and assistance to Ukraine to evaluate environmental damages of the war in Ukraine and(with participation of the Ambassador of Ukraine Mr Chentsov)

Response to Carbon Border Adjustment Mechanism

18 Nov 2021

The Ukrainian Business and Trade Association (UBTA) is a Ukrainian non-profit association, accredited in the EU Transparency Register, with a mandate to engage with the EU institutions on behalf of the Ukrainian export-oriented business community. Our member companies and partner sectoral associations represent 40% of the Ukrainian steelmaking, 30% of cement production and 26% of the national energy generation, which are the sectors most likely to be affected by the future CBAM in the EU-Ukraine trade. The UBTA and its members appreciate a constructive approach in the European Commission’s draft of CBAM Regulation towards associated partner countries (countries which signed up to Association Agreements with the EU). While we understand that CBAM may be seen as an instrument to encourage accelerated decarbonization in the EU’s partner countries, we are concerned that it would impose significant negative impact on Ukraine’s export revenues. Specifically, if the price of CBAM certificate for the import of the Ukrainian products (calculated at the weekly average ETS allowance price) would remain at least at the level of 55 EUR per ton of CO2, the total additional fiscal burden applicable to the Ukrainian steel exports to the EU would amount to at least 380 million EUR per year, and the country’s GDP (2019 prices) would decline by 700 million EUR or 0,5%. In the cement sector, additional fiscal burden would amount to above 2 million EUR per year, for the fertilizers industry – up to 50 million EUR p.a. Considering the fact that the EU remains a key destination for the Ukrainian exports (37% of exports of goods and services, 41,5% of exports of goods in pre-COVID year of 2019) and that exports constitute a sizeable share of the Ukrainian economy (41,2% of GDP of Ukraine in 2019) , potential effects of CBAM as a de-facto trade restricting measure may have profound adverse consequences for Ukraine’s economic growth as an export-oriented economy generally, as well as on the ability of key Ukrainian export-oriented industries to finance their green transition. Specifically, by some estimates, CBAM could affect 4,9 billion or 29% of overall Ukrainian exports. The potential adverse impact of CBAM design on Ukrainian trade and economy seems even more disproportionate when one compares with Ukraine’s actual contribution to the global emissions reduction effort, as well as the country’s commitment to do more under the Paris Climate Agreement. As per 2019, Ukraine’s cumulative share in global GHG emissions constituted 0,68%. As of 2019, GHG emissions in Ukraine decreased by 62.4% comparing with 1990 (including the sector «Land use, land-use change and forestry» (hereinafter - LULUCF) and by 64.8% from the level of 1990 (excluding the sector LULUCF). Ukraine’s second NDC commits the country to reducing GHG emissions of 65% by 2030, compared to 1990 (including LULUCF), reaching carbon neutrality until 2060. A prospect of Ukraine’s exemption from application of CBAM, subject to clearly defined and realistic preconditions to ensure effective, consistent and sustained reduction of emissions in line with European Green Deal objectives, would be a major political stabilizing signal of the draft CBAM regulation and a strong stimulus to develop domestic carbon taxation/pricing mechanisms in alignment with the EU rules. Subsequently, these preconditions should be integrated in the EU-Ukraine Association Agreement as a part of a preferential trade arrangement in line with provisions of Article XXIV GATT and be included in the Agreement’s legislative approximation agenda. A more detailed position of the UBTA members can be found in the memorandum which is attached to this submission.
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