Trade unions have warned that the European Carbon Border Adjustment Mechanism (CBAM) could have a severe negative impact on Ukraine’s economy, according to a statement by the Trade Union of Metallurgists and Miners of Ukraine (PMGU). The union said the introduction of CBAM on a general basis would pose major challenges for Ukraine, which continues to operate under martial law amid active military action, disrupted supply chains, and labor shortages.

The PMGU said Ukrainian industry lacks the resources to absorb CBAM-related costs, particularly the iron and steel sector, where about 40% of capacity has been destroyed by the war. The National Mining Association of Ukraine forecast that losses to the national economy could exceed US$200 million in the first year of full CBAM implementation, while the Federation of Steelmakers warned of a sharp decline in the domestic steel industry.

The statement cited ArcelorMittal Kryvyi Rih’s planned shutdown of a rolling mill in the second quarter as an early consequence. The union called for softer implementation measures, including transitional periods and financial support for Ukrainian producers.