Down 60%: Ukraine has calculated and assessed the impact of new European quotas on Ukrainian steel imports into the EU
9 July 19:38
ANALYSIS FROM 
Ukrainian steelmakers will still have to significantly revise their export plans regarding steel product shipments to the EU. New European steel import quotas will force them to do so. "Komersant Ukrainian" investigated the extent to which European officials have complicated the work of Ukrainian companies and whether there is still a possibility of improving the terms of steel trade with the EU.
There was no European miracle. Hopes for preferential treatment from the EU did not materialize. The steel import quotas set for Ukraine by the European Union are at odds with the political statements and promises made by official Brussels. This is effectively acknowledged by MEP Karin Karlsbro, a leading spokesperson on this issue, who found sufficient grounds to state that the published conditions for Ukrainian steel imports into the EU confirmed her worst fears.
“This decision will have enormous consequences for Ukraine’s steel industry and the country’s economy, which will ultimately affect Ukraine’s stability and its ability to finance its struggle for survival,” said Karin Karlsbro, as quoted by Politico.
The MEP announced her intention to discuss the quota issue with European Commissioner for Trade Maroš Šefčovič. But this does little to ease the burden on Ukrainian steelmakers, as they are already forced to adjust their export plans to comply with the new terms of trade with the EU.
Calculation Details
The total annual quota for Ukraine’s steel product imports into the EU has been set at 1.050 million metric tons. Some believe that this modest figure resulted from the quota calculation methodology used by the EU. When determining the quotas, the EU focused on the period from 2022 to 2024—precisely the years when Ukrainian exports to Europe declined significantly for well-known reasons. But this is not the only reason to speak of unfairness when assessing the quotas granted to Ukraine. Andriy Glushchenko, an analyst at the GMK Center, explains.
“While the European Union reduced the total volume of quotas by 46%, the quotas for Ukraine—compared to last year’s imports—envisage a 60% reduction in shipments to the EU. Furthermore, the historical principle of quota allocation among countries raises questions, as it was based on each country’s share of imports into the EU for the period from 2022 to 2024. And those are precisely the years when the war was raging in Ukraine and, objectively speaking, supplies from Ukraine declined. It would have been fair if the impact of the war had been taken into account when allocating quotas,” the expert believes.
But the European Commission did not take the war into account. The same was true when the Carbon Border Adjustment Mechanism (CBAM) was recently extended to Ukraine. At that time, despite the ongoing full-scale war, Ukraine was also denied any exemptions or a transition period. And the quota decision, which took effect on July 1, provides sufficient grounds to speak this time not so much of preferences as of discrimination.
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Strange Preferences
Ukraine received individual quotas across nine product categories, and when all nine categories are combined, the total volume of quotas allocated to Ukraine is 60% lower than the actual shipment volumes for 2025 in the respective categories. In fact, there were reductions in every category except one. Andriy Glushchenko, an analyst at the GMK Center, points this out.
“We analyzed the distribution of quotas among the four main categories of exports from Ukraine, which account for 82% of shipments to the EU. The most significant quota reduction will affect hot-rolled coil. This is the largest category of exports from Ukraine, and our country is set to lose approximately 825,000 metric tons of exports to the EU. This represents a 63% reduction compared to actual shipments last year. For the other three categories—cold-rolled coils, rebar, and wire rod—Ukraine was allocated a share slightly larger than its historical average. But this “slightly larger” share amounts to an additional 68,000 metric tons of the annual quota. And that is almost nothing compared to the fact that, under the new EU quotas for those same four main export categories, Ukraine will lose 1.3 million metric tons of exports per year,” the expert notes.
Quota Competition
EU steel import quotas consist of two parts. One part was distributed among all countries that are members of the World Trade Organization. The other part was allocated to countries that are signatories to free trade agreements with the European Union. Ukraine received its share from both sources. It is precisely Ukraine’s membership in the group of countries that have free trade agreements with the EU that promises both Ukraine and several other countries preferential access to so-called residual quotas. This has already led some to speculate that the final volumes of duty-free exports for Ukraine could turn out to be higher. But it’s not that simple, since countries that have received additional quotas under free trade agreements with the EU can utilize these residual quotas on a first-come, first-served basis. Andriy Glushchenko, an analyst at the GMK Center, explains.
“If a country exhausts the quota allocated to it, then shipments are automatically counted toward this residual quota. This quota is filled on a first-come, first-served basis. In other words, the country that is the first to exceed its quota will then supply goods within the limits of this residual quota. In practice, this means that countries with more competitive supply conditions—particularly in terms of price— such as Turkey, India, Indonesia, or Vietnam, may fill their quotas within the first couple of days of the quarter and immediately begin supplying products within the remaining quotas. “In fact, Ukraine shouldn’t count on being able to supply anything within this remaining quota,” the expert believes.
After July 1, competition for quotas emerged not only at the European level but also within Ukraine itself. This is now a competition on an individual basis—among Ukrainian companies. Andriy Glushchenko explains.
“The quota is allocated on a quarterly basis, and the company that is the first to supply its products will, in effect, be the first to fill this quota. In other words, the quota is granted to the country, and there is no mechanism for distributing it among specific companies. In fact, Ukrainian companies will fill this quota, allocated to Ukraine, on a competitive basis,” the expert notes.
It’s logical to assume that the quotas won’t be enough for everyone. But there’s still a chance to change the situation and adjust the quota levels—and not just because the adopted regulation is valid only until the end of 2026. The European Union itself may find grounds and a need to revise the quotas upward. According to Andriy Glushchenko, a sharp reduction in quotas could lead to rising prices for steel products in Europe, and the European Commission will have to respond to this, since European institutions strive to take into account not only the position of local steel producers but also that of other companies that consume steel. And this, in addition to potentially creating the conditions for an increase in quotas, leaves Ukraine with a chance to continue the dialogue and secure more favorable terms for steel imports into Europe.
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