The Ukrainian Association of Ferroalloy and Electrometallurgical Producers (UkrFA) has announced that it has formally appealed to the Ukrainian government, warning of a critical situation in the country’s electrometallurgy sector and calling for the pilot introduction of state support mechanisms. UkrFA reports that enterprises across the sector are facing severe operational challenges.
Strategic industry under growing pressure
UkrFA stressed that the ferroalloy and electrometallurgy industry is a strategically important part of Ukraine’s full-cycle industrial economy and plays a vital role in post-war infrastructure and industrial reconstruction.
However, the association said that extraordinarily high electricity costs are placing the sector at risk, particularly for companies operating in frontline regions, whose specific operating conditions are not sufficiently reflected in current state policy.
The association specified that the share of electricity costs in the cost of production of electrometallurgical enterprises was 34 percent in 2023, 38 percent in 2024, and almost 40 percent last year.
The situation worsened further following a decision by Ukraine’s energy regulator to introduce a price cap of UAH 15,000 per MWh. UkrFA warned that this measure creates a real risk of a complete shutdown of ferroalloy and electrometallurgical production in Ukraine.
Call for pilot state support measures
UkrFA proposed launching pilot state support mechanisms. Proposed measures include:
- access for energy-intensive enterprises to long-term special electricity supply contracts;
- compensation of electricity tariffs through tax instruments;
- preferential lending for renewable energy projects and energy storage systems;
- preferential natural gas tariffs for metallurgical enterprises using cogeneration;
- automatic VAT refunds for metallurgical producers;
- concessional financing for power generation modernization and energy-efficiency upgrades.
UkrFA emphasized that the implementation of these measures would secure the continuity of the sector and support Ukraine’s post-war recovery objectives.
