The presence of even small amount of carbon interstitial impurity affects properties of Fe and Fe-based ferritic alloys. From earlier experiments it follows that carbon exhibits considerably strong interaction with lattice defects and therefore influences their mobility, hence affecting the evolution of the microstructure under irradiation. This work is dedicated to understanding the interaction of carbon–vacancy complexes with glissile dislocation loops, which form in Fe, Fe-based alloys and ferritic steels under irradiation. We apply large scale atomistic simulations coupled with the so-called ‘metallic–covalent bonding’ interatomic model for the Fe–C system, known to be the most consistent interatomic model available today. With these techniques we have studied (i) the stability of vacancy–carbon clusters; (ii) the interaction of octahedral carbon with ½h1 1 1i loops; (iii) possibility of the dynamic drag of carbon by ½h1 1 1i loops and (iv) the interaction of ½h1 1 1i loops with the most stable vacancy–carbon clusters expected to occur under irradiation. Finally, we have shown that carbon–vacancy complexes act as strong traps for ½h1 1 1i loops.