Possible Implications of the European Carbon Border Adjustment Mechanism for Ukraine and Other EU Trading Partners

Abstract

This paper provides a quantitative assessment of the European Carbon Border Adjustment Mechanism (CBAM) implementation. We find limited impacts of the CBAM for most European Union (EU) trading partners. Ukraine is the most impacted country, with a per capita income change of-0.4% and reductions in domestic iron and steel production reaching 3.9%. Global exports of chemical products are impacted the most, with corresponding reductions exceeding 4% in some countries.