Recycling scrap metal within Ukraine provides significantly larger tax revenues for the budget compared to its export. According to Serhiy Povazhnyuk, Deputy Director of the State Enterprise “Ukrpromzovnishekspertiza”, exporters of ferrous scrap metal pay an average of only 50 hryvnias in taxes for each ton of raw material exported abroad. Meanwhile, metallurgical plants pay over 7500 hryvnias in taxes for each ton, and together with contributions from related industries, this amount can reach up to 14,000 hryvnias.
This is reported by Finway
Impact on the Economy and Labor Market
The expert emphasized that scrap recycling has a significant multiplicative effect on the economy. It stimulates growth in related industries such as the production of iron ore raw materials, coke, and ferroalloys. All these materials require transportation within the country, creating additional demand for the transportation sector. In addition to financial contributions to the budget, metallurgical enterprises provide tens of thousands of official jobs both directly and in related companies.
“Recycling scrap has a multiplicative effect on the entire economy as it stimulates growth in related industries, such as the production of iron ore raw materials, coke, and ferroalloys. All of this needs to be transported within the country, meaning the transportation sector receives additional cargo. Besides monetary contributions to the budget, metallurgical plants provide tens of thousands of official jobs both within themselves and in related enterprises,” noted the expert.
Need for Raw Materials and Production Prospects
Serhiy Povazhnyuk also pointed out that domestic consumers of scrap, especially during wartime, should have priority in securing raw materials. If the plans of metallurgical plants to increase liquid steel production to 8.9 million tons by 2026 are realized, the volume of collected scrap may not be sufficient to fully meet the needs of the enterprises. According to estimates from the State Enterprise “Ukrzovnishekspertiza”, steel production in Ukraine is expected to reach about 7.6 million tons in 2025.