The Ukrainian metallurgy industry is facing serious challenges due to the implementation of the EU’s Carbon Border Adjustment Mechanism (CBAM), which has already significantly impacted the volume of steel exports to European countries. Representatives of key companies report that European clients are canceling orders for Ukrainian steel en masse, threatening one of the leading sources of foreign currency revenue for the state.
This is reported by Finway
CBAM: New Rules for Steel Exporters
Since the beginning of the year, the carbon adjustment system for imports has come into effect, under which all suppliers of steel and other industrial goods to the EU must pay an additional fee based on their carbon emissions. This innovation has become a serious obstacle for Ukrainian producers, who are already suffering from the consequences of the war and limited production capacities.
Ukrainian metallurgical companies are actively calling for a temporary exemption from CBAM, emphasizing that they have already lost a significant portion of stable buyers in Europe due to the tax. According to estimates by the World Bank, in 2023, the export of metallurgical products from Ukraine reached nearly 4 billion dollars, with the EU remaining the main market — Poland alone accounted for a third of all metallurgical supplies from Ukraine.
Lost Orders and Production Cuts
One of the largest Ukrainian steel producers, ArcelorMittal Kryvyi Rih, has already felt the effects of the new European rules. According to CEO Mauro Longobardo, CBAM has effectively and instantly deprived the company of access to the European market:
“As soon as clients learned about the additional duty (the CBAM payment – ed.) ranging from 60 to 90 dollars per ton, they canceled all orders for the first quarter of 2026 — about 300,000 tons,” said Longobardo.
As a result, the company had to suspend operations at one of its plants and cut at least 3,400 jobs. There are currently no new markets for such a quantity of steel.
Similar difficulties are noted by Metinvest, the largest mining and metallurgical company in Ukraine. The company emphasizes that the European market is essential for Ukrainian producers, who operate under stricter conditions than their competitors. At Metinvest, they believe that although CBAM officially has environmental goals, in practice, it also protects European producers from external competition. Company representatives suggest directing potential CBAM payments for Ukrainian steel to special accounts that would allow for production modernization while simultaneously increasing demand for European technologies.
European metallurgical companies, on the contrary, support CBAM, as they believe it levels the playing field for foreign producers with local ones, since the latter are required to adhere to stricter environmental standards.
In 2025, Ukraine remained one of the leaders in steel exports to the EU alongside India and China. At the same time, the CBAM system, along with the European emissions trading system, encourages producers to switch to environmentally friendly technologies and sell products within the EU, where their own carbon pricing rules apply.