The SVA makes exports to the EU more difficult and creates financial risks; the government must take action – Ferrexpo
9 April 13:58
Ukraine lacks accredited verifiers to prepare reports under the CBAM mechanism, which has been in effect for us without exceptions since the beginning of the year. This situation poses financial risks for exporters and requires urgent solutions at the government and EU levels.
This was reported by "Komersant Ukrainian", citing comments made by Ferrexpo representative Yaroslavna Blonska to GMK Center.
According to her, one of the key problems is the inability to verify actual emissions, which forces Ukrainian companies to use so-called default indicators—which are set at a high level by default. This could lead to an additional financial burden for companies.
“Based on data from previous periods, about 80% of Ferrexpo’s exports consist of products subject to the CBAM—namely, pellets. The company is investing in decarbonization and monitoring emissions reductions. According to verified data, an additional financial burden on exports can only be expected after 2030, but for the group’s companies, the recognition or application of default benchmarks for the products they manufacture remains a major issue,” Blonska explains.
According to Blonska, another issue remains the tight accreditation deadlines: the European Commission is compiling a list of verifiers by September 30. Ukrainian candidates may not have time to complete the procedures, and, according to business estimates, priority will be given to companies already operating within the EU ETS system.
Blonska also drew attention to the lack of a clear procedure for recognizing verifiers from Ukraine and mechanisms for engaging them.
“Currently, there are no verifiers operating within the EU ETS specifically from Ukraine. At present, there are unwritten rules under which those already operating under the EU ETS can obtain accreditation by September 30, meaning this creates an even greater risk for Ukrainian candidates. Ferrexpo is in communication with potential candidates—future accredited agents. The mechanism for their involvement has not yet been defined, and there is no clear procedure for recognizing their verification results.”
This complicates companies’ preparation for reporting and creates additional uncertainty for exports. At the same time, EU verifiers are in no hurry to come to Ukraine—given the security situation, Ferrexpo explains
What steps do industrialists expect from the government
The company believes that Ukraine must create a platform, possibly under the Ministry of Economy, Environment, and Agriculture. This could be a department dedicated solely to CBAM.
“We need clear requirements and an accreditation procedure for Ukrainian verifiers. Domestic businesses are interested in having companies available by September 30 with whom they can collaborate on verification. It is extremely important to know when, to whom, and how Ukrainian candidates should submit applications, as well as the deadlines set for them.”
The company’s mission is to produce goods, invest in decarbonization, and export them under existing long-term contracts to Europe’s leading steel producers. However, Ferrexpo currently depends on the actions of the future verifier, the company explains
“At the national level, our company is requesting assistance in expediting the accreditation procedures for national verification bodies in accordance with EU requirements.”
Among the possible solutions to the verification challenges, the following are proposed:
- introduce a temporary mechanism in the event of a delay in international verification;
- agree on the use of data that has already been verified by Ukrainian authorities;
- provide for temporary recognition or a simplified admission procedure for Ukrainian verifiers at the EU level.
“If, by September 30, there is no feedback or information from the Ukrainian candidates, there is a very high risk that representatives from Ukraine will not be included in the list under the general procedure. According to information from international businesses and Ferrexpo’s clients, priority may be given to companies already operating under the EU ETS, meaning that the conditions for Ukrainian verifiers and large companies will already be unequal.”
What is known about CBAM for Ukraine
The Carbon Border Adjustment Mechanism (CBAM) provides for the introduction in 2026 of a carbon duty on imports into the EU of certain types of products, including steel, cement, fertilizers, electricity, aluminum, and hydrogen.
Previously, the European Commission did not provide for any exceptions for Ukraine under the CBAM, noting that the mechanism’s impact on the Ukrainian economy would be minimal.
However, according to estimates by the Federation of Employers of Ukraine, the application of the CBAM to Ukrainian exports could lead to a reduction in GDP of $8.7 billion in 2026 and up to $11.3 billion in 2034.
