On March 24, at its session, the Government approved a Resolution "On the establishment of a working group to agree on an approach to the application of the carbon border adjustment mechanism in Ukraine for consultations with the European Commission." The document forms the composition and approves the provisions of the relevant working group.
A key element of the European Green Deal is the carbon border adjustment mechanism. The introduction of such a mechanism at the EU level will increase the cost of imports of products during the manufacturing of which CO2 emissions occur. This can have a significant impact on Ukraine's energy and industry.
"Ukraine is showing significant synergies with the climate goals of the European Green Deal and will continue to strive for the greatest ambitions in achieving climate neutrality and sustainable economic development together with the EU. In our opinion, the legal regime of the Association Agreement between Ukraine and the EU makes it impossible to apply the carbon adjustment mechanism to Ukrainian goods. With this in mind, the Government has adopted a resolution on the establishment of a working group that will cooperate with the European Commission on the application of the carbon border adjustment mechanism to Ukraine," commented Deputy Minister Taras Kachka.
Based on the results of the working group's activity, it is expected to develop a consolidated position of the Ukrainian side on the approach to the application of the carbon adjustment mechanism.
In particular, any carbon border adjustment mechanism must not undermine the efforts of States under the Paris Agreement and must comply with WTO requirements. Any application of such mechanisms in trade should be based on a global consensus within the WTO and take into account all aspects of production, transportation and trade in goods that may be subject to the application of such a mechanism.
The submission of the relevant legislative proposal by the European Commission to the European Parliament and the Council of the EU is expected before mid-2021.