Strategies for adapting Ukrainian industry to the CBAM mechanism and increasing competitiveness in the EU market

Abstract

The purpose of this study is to assess the economic impact of the Carbon Border Adjustment Mechanism (CBAM) on key sectors of Ukrainian industry and to substantiate strategic adaptation pathways aimed at strengthening their competitiveness in the European Union market. The research is based on the calculation of direct CBAM costs as a function of export volumes, specific CO₂ emissions, and projected CBAM certificate prices. A comparative analytical framework is applied to examine technological, financial, and market-related dimensions of decarbonisation across metallurgy, chemical production, cement manufacturing, aluminium production, and the energy sector. The results indicate that the highest CBAM-related financial pressure is concentrated in the metallurgical and aluminium industries due to their high carbon intensity and substantial export volumes. In contrast, the chemical and cement sectors face relatively lower direct costs. The study demonstrates that the adoption of low-carbon technologies (including direct reduced iron, renewable energy sources, and carbon capture, utilisation, and storage), the mobilisation of differentiated financing instruments (green bonds, decarbonisation funds, and public–private partnerships), and the implementation of market-oriented strategies (Product Environmental Footprint certification and the development of green industrial clusters) are critical for mitigating CBAM costs and enhancing long-term competitiveness. The paper contributes a comprehensive approach that integrates quantitative CBAM cost assessment with a structured systematisation of sector-specific adaptation strategies along technological, financial, and market dimensions, taking into account structural differences across industries. The findings may be used by policymakers and corporate decision-makers to design effective industrial and investment policies, prioritise decarbonisation measures, and support the deeper integration of Ukrainian industry into European value chains under tightening climate regulation.