The European Union may lift the “carbon tax” on Ukrainian steel: negotiations have begun
1 May 20:45
The European Union has begun negotiations with Ukraine regarding the possible exemption of Ukrainian steel from the Carbon Border Adjustment Mechanism (CBAM), a key EU climate protection measure.
Politico reports this, according to "Komersant Ukrainian".
CBAM imposes an additional duty on products manufactured with high carbon emissions. This significantly hinders the competitiveness of Ukrainian steel exporters in EU markets.
Metals remain one of Ukraine’s most important export sectors, generating nearly $4 billion in 2023, according to the World Bank.
Exemption from this duty could provide Ukraine with vital revenue to counter Russia, and Europe with cheaper access to steel, which is crucial for military reinforcement.
Yuriy Ryzhenkov, CEO of Metinvest, noted that Deputy Prime Minister for Euro-Atlantic Integration Taras Kachka had approached the company asking for analysis and ideas regarding the CBAM negotiations.
“Two ships heading to Odesa to pick up our cargo were attacked by drones at sea two days ago. In addition to CBAM, we are facing many other challenges,” Ryzhenkov said.
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CBAM is not the only problem plaguing the metallurgical industry
Ryzhenkov added that exports of Ukrainian metal products have fallen by more than half since the start of Russia’s full-scale invasion. The volume dropped to 2.2 million tons compared to nearly 5 million in 2021.
Members of the European Parliament have previously proposed granting Ukraine special status to avoid harsh CBAM penalties.
“We really need to carefully assess whether the conditions are too harsh for Ukraine,” said Dutch MEP Mohammed Chahim.
Proposals from Metinvest
Metinvest has proposed that the EU consider directing CBAM payments for Ukrainian steel into special accounts for the decarbonization of enterprises. This could help preserve the country’s vital export revenues.
As a reminder, in February, the CBAM led to the closure of ArcelorMittal Kryvyi Rih’s foundry and mechanical plant .
ArcelorMittal Kryvyi Rih is the largest producer of rolled steel in Ukraine. It specializes in the production of long products, including rebar and wire rod.
ArcelorMittal owns Ukraine’s largest mining and metallurgical complex, “ArcelorMittal Kryvyi Rih,” and a number of smaller companies, including PJSC “ArcelorMittal Beryslav.”
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