The European Union's Carbon Border Adjustment Mechanism (CBAM) is creating significant economic pressure on Ukraine's heavy industry. As the EU phases out free carbon allowances for domestic producers, importers of steel and cement must pay for embedded CO2 emissions to level the playing field. Ukrainian officials report a sharp decline in steel exports to the EU, with some product categories dropping by two thirds. While the EU suggests the impact is minor, Kyiv warns the levy could cost the country a significant portion of its GDP over the next decade.
