CBAM is gradually reshaping the rules for agricultural exporters to the EU

The European Union’s Carbon Border Adjustment Mechanism (CBAM) is becoming an increasingly important factor in competitiveness on the European market. Although grains, oilseeds and vegetable oils are not yet directly covered by the mechanism, European companies are placing growing emphasis not only on product prices but also on their carbon footprint.

CBAM was introduced to ensure that imported products face carbon costs comparable to those paid by EU manufacturers under the EU Emissions Trading System (EU ETS). If products manufactured outside the EU have high greenhouse gas emissions, importers may be required to pay the difference between the carbon price already paid in the country of origin and the EU carbon price.

At present, CBAM applies to steel, cement, aluminum, fertilizers, electricity and hydrogen. However, its indirect impact is already being felt across the agricultural sector. The mechanism is contributing to higher fertilizer prices, increasing the cost of steel used in agricultural machinery and grain storage facilities, gradually raising transport and logistics costs, while giving biofuels an additional competitive advantage over fossil fuels.

European processors are also paying increasing attention to the carbon performance of the entire supply chain. When purchasing Ukrainian rapeseed, for example, they assess not only the commodity price, freight and insurance costs, but also the CO₂ emissions generated during production. As a result, many European companies already require suppliers to provide information on product carbon footprint, production carbon footprint, as well as direct and indirect greenhouse gas emissions (Scope 1, Scope 2 and, in some cases, Scope 3).

Analysts note that rising CBAM costs generally reflect higher EU carbon allowance prices, increased import-related carbon payments and reduced competitiveness of products with a high carbon footprint. This is encouraging manufacturers to invest more in energy efficiency, emissions reduction and transparent environmental reporting.

For Ukrainian exporters, this means that competitiveness in the EU market will increasingly depend not only on FOB prices, exchange rates or logistics costs. Carbon efficiency, the adoption of modern production technologies and the ability to verify the environmental performance of products will become equally important factors in meeting the requirements of European buyers.