The Ukrainian Steel Association Ukrmetallurgprom has welcomed the Ukrainian government’s decision to temporarily restrict exports of ferrous metal scrap, describing the move as decisive and economically justified.
The government has adopted Resolution No. 1795, introducing a zero export quota for scrap metal throughout 2026. According to the association, scrap exports from Ukraine have risen sharply in recent years, creating shortages in the domestic market, weakening raw material security for steelmakers and destabilizing operations across the metallurgical sector.
Export flows seen as bypassing duties
Ukrmetallurgprom stated that scrap exports to the European Union had effectively become a mechanism to circumvent Ukraine’s €180/mt export duty. Scrap shipped to EU countries was subsequently re-exported to destinations such as Turkey and India.
This practice, the association argued, resulted in significant fiscal losses for the state budget, reduced scrap availability for Ukrainian steel mills, and transferred strategic raw materials to the benefit of foreign competitors.
Value creation and tax revenues emphasized
Oleksandr Kalenkov, president of Ukrmetallurgprom, said the decision would help protect national economic interests and strengthen industrial resilience.
He stressed that retaining scrap within Ukraine enables domestic steel producers to generate higher value-added products, earn foreign currency through finished steel exports, and contribute meaningful tax revenues at all levels of government.
Industry estimates cited by the association indicate that processing one metric ton of scrap into steel in Ukraine generates around UAH 14,000-15,000 ($331-355) in taxes, while exporting scrap yields roughly UAH 100 ($2) per ton, often through informal channels. In this context, the temporary export restriction was described as critical for economic stability and sustaining domestic industrial capacity.
Scrap retention linked to decarbonisation and CBAM
Ukrmetallurgprom also highlighted the growing strategic importance of scrap as a feedstock for lower-emission steelmaking, particularly following the European Union’s launch of the Carbon Border Adjustment Mechanism on January 1, 2026.
With no CBAM exemption granted to Ukraine, increased domestic use of scrap is viewed as a key tool for reducing carbon intensity, maintaining export competitiveness, and aligning Ukrainian steel production with evolving EU climate requirements.
Industrial base strengthened under pressure
The association concluded that the scrap export restriction reinforces Ukraine’s metallurgical base at a time of heightened economic and geopolitical pressure, while simultaneously supporting industrial resilience, fiscal stability, and the transition toward lower-carbon steel production.
