Recent research from GMK Center, the Ukrainian consulting company, highlighted concerns that the European Union's Carbon Border Adjustment Mechanism (CBAM) could significantly impact Ukraine's economy, particularly its iron and steel industry. According to the study, 93% of Ukrainian exports falling under CBAM regulations come from this sector, with pig iron and long steel products facing the most severe losses.

Ukraine's steel production, largely based on the blast furnace (BF) method, has a high carbon intensity, making its products less competitive compared to European electric arc furnace (EAF) products. As a result, Ukraine may lose its billet and long product exports to the EU.

Additionally, the CBAM could result in higher costs for pig iron sales, potentially replacing them with imported hot briquetted iron (HBI) from the Middle East and North Africa. The growing administrative burden of providing detailed carbon data could also increase costs for small and medium-sized exporters.