The European Union's Carbon Border Adjustment Mechanism (CBAM) is significantly impacting European cement importers and non-EU exporters, with Ukraine facing severe vulnerabilities. This exposure stems from a combination of wartime infrastructure damage, a strong reliance on carbon-intensive exports, and incomplete monitoring, reporting, and verification (MRV) frameworks.
Recently published analysis from Lviv University reveals that the primary challenge for Ukrainian exporters lies in the administrative and verification duties of emissions accounting rather than direct carbon payments. A failure to provide verified emissions data forces the use of default values, which increases the compliance burden. Consequently, careful attention must be given to how climate governance, reporting duties, wartime disruptions, and institutional capacity interact.
Cement exports from Ukraine to the EU reached a high of 1.64Mt in 2025, of which 0.820Mt were to Poland and 0.658Mt to Romania. In addition, Ukraine exported 0.147Mt clinker to Slovakia.
Lyudmila Kripka, Executive Director of the Ukrcement Association, stated that the conditions facing the domestic cement industry at the start of CBAM's second stage this year resemble an "embargo" rather than a barrier. Ukraine was assigned default CO2 emission values of 1518kg/t of clinker, which is nearly twice the actual levels produced even by the wet manufacturing method.
Kripka highlighted that there is currently no accredited verifier in the EU for CBAM purposes, making exports functionally impossible. She noted that this situation has already reduced cement production, lowered government budget revenues, cut foreign exchange earnings, and worsened the imbalance in the nation's trade deficit.
Historical context
The onset of the full-scale Russian invasion in 2022 drastically altered Ukraine’s exposure to the CBAM. Prior to the war, Ukrainian exports of covered goods to the EU were substantially higher in both absolute value and production capacity. Military destruction of industrial assets, territorial occupation, electricity supply interruptions, and logistical disruptions triggered a severe contraction in export volumes after 2022. The total value of Ukraine’s CBAM-covered exports to the EU dropped from roughly US$7.2bn in 2021 to US$3.7bn in 2022, and fell further to US$2.8bn in 2023.
Despite a moderate recovery during 2024–25, export volumes continue to lag far behind pre-war figures. Concurrently, the strategic value of the EU market for Ukrainian exporters intensified, with the EU's share of total Ukrainian CBAM-covered exports climbing from approximately 41 per cent in 2021 to around 68 per cent in 2025. This structural shift demonstrates that even with diminished industrial output, Ukraine’s reliance on EU market access—and its subsequent need to comply with EU climate-related trade rules—has grown substantially.
The Ukrainian economy maintains a deep dependence on carbon-intensive industrial sectors, particularly metallurgy and associated export industries. Consequently, domestic exporters must navigate increasingly complex European climate standards while operating under wartime economic volatility. Implementing functional monitoring, reporting, and verification frameworks demands stable institutional structures, qualified verification entities, dependable emissions accounting systems, and significant financial capital.
Risks of incomplete monitoring
Even though the formal requirement to buy CBAM certificates rests on EU importers, the economic weight shifts directly onto external producers through price corrections, contractual conditions, and strict reporting duties. The Lviv University data reveals that the immediate compliance strain for Ukrainian businesses stems from these administrative and verification mandates rather than future carbon payments.
"Currently, the EC recognises that the default value is incorrect, they also see a problem with the certification of verifiers, which applies not only to Ukraine, but also to EU countries. [We] are promised to correct these points within a month," Kripka noted.
Wartime disruptions make these compliance standards exceptionally difficult to meet due to widespread infrastructural and institutional deficits. Consequently, MRV systems act as more than just technical tools for environmental oversight; they serve as mechanisms of indirect regulatory and economic leverage over non-EU exporters.
Conflict conditions severely amplify these operational hurdles for Ukrainian companies. Destroyed industrial plants, erratic power grids, transport bottlenecks, limited local verification experts, and scarce investment capital hinder the deployment of reliable emissions tracking systems that match EU methodologies. Because of this, the primary barrier to keeping EU market access remains the complex administrative and institutional framework rather than direct carbon pricing.
