New EU restrictions on steel imports, set to take effect on July 1 of this year, could destroy Ukraine’s mining and metallurgical complex (MMC) and deal a significant blow to the budget of a country defending itself against Russia, Metinvest Group CEO Yuriy Ryzhenkov said in an interview with The Guardian.
According to him, the EU’s new quota system could “kill Ukraine’s steel industry.”
He noted that the EU introduced protectionist measures due to a prolonged global steel surplus caused by China. The EU has halved the quotas for steel that can enter the bloc tariff-free and doubled the tariff to a prohibitive 50% on all imports exceeding the limit allocated to each country. This EU decision has caused concern among trading partners trying to secure a sufficiently large share of the quota for their own steel industries, particularly in the UK, where the industry has warned of an “existential threat” if it does not receive sufficient access to its largest export market.
For Ukraine, the economic threat from its military ally is exacerbated by the war, which has cut off some of its previous alternative markets and pushed the country’s steel companies toward closer integration with Europe. They have also faced additional costs due to constant attacks on infrastructure since the start of full-scale war in February 2022.
“In our view, this is an unfair approach. Ukraine does not pose a significant threat to the EU steel industry—supplies are small. At the same time, destroying one of the country’s functioning industries does not seem reasonable; we see no leniency toward Ukraine,” the CEO stated.
Furthermore, the quotas will also hinder military efforts by depriving the government of tax revenues equivalent to hundreds of millions of pounds. Metinvest is one of the largest taxpayers in the country’s private sector. Furthermore, the quotas will be imposed on duties as part of the implementation of the CBAM (Carbon Border Adjustment Mechanism).
Ryzhenkov noted that due to the war, Metinvest was unable to invest billions of euros in the construction of “green” electric arc furnaces at the Zaporizhstal and Kametstal plants, although the company had planned to do so even before the full-scale Russian invasion.
Metinvest is a vertically integrated group of mining and metallurgical enterprises. Its facilities are located in Ukraine—in the Donetsk, Luhansk, Zaporizhzhia, and Dnipropetrovsk regions—as well as in European Union countries, the United Kingdom, and the United States. The holding’s main shareholders are the SCM Group (71.24%) and Smart Holding (23.76%). Metinvest Holding LLC is the management company of the Metinvest Group.
Metinvest, an international vertically integrated mining and metallurgical group of companies, will act as the general partner of the international forum “Decarbonization of the Steel Industry: a Challenge for Ukraine,” which will be held in Kyiv on July 14, 2021.
According to the company’s press release, an event on the topic that has been discussed by the entire international community in recent years will be held in Ukraine for the first time.
As noted, for many years of operation, Metinvest has been striving to reduce the negative impact of production on the environment. Over the past 10 years, the group has allocated more than $ 3.4 billion for environmental initiatives and is committed to further reducing its carbon footprint to combat climate change.
Meanwhile, achieving carbon neutrality will be a big challenge for Ukrainian companies, as it involves a complete change in production processes and supply chains. In addition, the necessary technologies that will make the country’s economy carbon-free are only at the research stage. To develop a detailed roadmap for the transition to a “green” industry requires interaction between manufacturers, engineering companies, consumers, suppliers and the government.
Yuriy Ryzhenkov, the director general of Metinvest, stressed that the industry is facing a serious task that will affect the life of the entire country.
“Decarbonization can completely change both production and technologies. The sooner business and the state develop a unified approach to achieving carbon neutrality, the easier this process will be for the Ukrainian economy,” the top manager stated.
The forum is organized by GMK Center, an information-analytical and consulting company working in the field of metallurgy and industry. At the forum it is planned to discuss issues related to decarbonization of steel production, existing and promising technologies, plans of companies to reduce CO2 emissions and interaction with the state in this direction. The event will be attended by the representatives of mining and metallurgical companies, international engineering, consulting and R&D companies, as well as government officials, business associations and industry experts.
