Ukraine is counting on a differentiated approach in the application by the European Union of the Carbon Border Adjustment Mechanism (CBAM) - a special regulation of imports of certain goods, the production of which is associated with significant greenhouse gas emissions.

Deputy Prime Minister for European and Euro-Atlantic Integration of Ukraine Olha Stefanishyna told during a discussion organized by the Politico Europe.

"The process of introduction by the European Union of CBAM cannot be considered as an exclusively internal process in the EU, as the European Union is one of the largest global markets. This process will have a significant impact on the economies of other countries. We expect that the decision to apply the mechanism to a particular country will be made on an individual basis," said Olha Stefanishyna.

The Deputy Prime Minister stressed that decisions such as CBAM should be taken within the framework of existing commitments on the Free Trade Area, as well as taking into account the measures introduced by a country at the national level to reduce greenhouse gas emissions.

"Since the beginning of Russia's aggression and the signing of the Association Agreement, the EU has become Ukraine's largest trading partner. It is estimated that CBAM will cover sectors that account for about 20% of our trade with the EU. Measures that restrict our bilateral trade will be considered as barriers to trade incompatible with the provisions of the Association Agreement. This issue is rather sensitive. Such decisions cannot be made quickly and it is crucial that today we are considering a certain transition period for CBAM," said Olha Stefanishyna.

The official stressed that Ukraine has never been a source of carbon leakage for the EU. "There is no evidence that EU companies subject to CBAM regulation are relocating their production to Ukraine. Ukraine is not a country of "carbon leakage", said Olha Stefanishyna, recalling that Ukraine has introduced a tax on carbon emissions and has already implemented a mechanism for monitoring, reporting and verification of greenhouse gas emissions.

For his part, Gerassimos Thomas, Director General for Taxation and Customs Union of the European Commission, said that the European Commission's legal proposal on CBAM allows for the conclusion of bilateral agreements with countries that have a mechanism for pricing greenhouse gases.