In November, Ukraine took its first practical steps to restrict scrap exports by setting a zero quota from January 1, 2026. The export of this strategic raw material from our country has already reached such proportions that it poses a threat to the security of steel enterprises and, accordingly, carries a risk to Ukraine’s economic security.
Oleksandr Kalenkov, President of Ukrmetprom, spoke to GMK Center about the background to this initiative and its implications for the industry.
The problem of scrap exports from Ukraine has long been a threat to our country’s economic security. In addition, it is a factor that jeopardizes the operation of mining and steel enterprises, as it exacerbates the shortage of scrap within Ukraine. At the beginning of this year, steelmakers appealed to the government to restrict the outflow of strategic raw materials from the country in one way or another.
I would like to remind you that, according to the results of 2024, Ukrainian scrap exports increased by 60%. In absolute terms, approximately 300,000 tons of raw materials were exported abroad, which could have been processed domestically into 1.5 million tons of steel products. Accordingly, this volume of finished rolled products could have been exported and an additional UAH 2 billion could have been earned.
However, this did not happen: the state received neither export proceeds nor taxes to budgets at all levels. Not even customs duties on these 300,000 tons of exported scrap were paid to the state budget. In 2025, the situation only worsened: already in January-September, scrap exports exceeded those recorded for the whole of 2024, amounting to 312,000 tons (an increase of +54%). Therefore, against the backdrop of such extremely unfavorable trends that threaten the country’s economy, the government took the first steps towards adopting a state and decisive decision to temporarily restrict the export of scrap.
No. Both the duty and the zero quota are elements of a common infrastructure that will make it possible to keep strategic raw materials, i.e., scrap, within the country. Another element should be sanctions against the Moldovan Metallurgical Plant, since the supply of Ukrainian scrap to the pro-Russian enclave is tantamount to financing terrorism and Russian military aggression against Ukraine.
The export duty of €180/ton is very important, as it currently prevents scrap from being exported directly from Ukraine to countries such as Turkey. However, it does not apply to a number of countries with which Ukraine has free trade agreements, primarily the European Union. This is actively exploited by unscrupulous exporters who transport scrap in transit through European countries.
It has long been no secret that Ukrainian scrap is delivered to the western border, and then to European ports, in particular Gdansk, Klaipeda, or Varna, from where the raw materials are mainly sent to Turkey and India, i.e., to countries that directly or indirectly purchase energy resources from Russia, thereby supporting the aggressor country in the war against Ukraine.
In this context, it is worth recalling that in October, the European Commission adopted the Steel Action Plan, according to which a new, tougher protectionist instrument, the so-called safeguard+, will be introduced from next summer. Import quotas for steel supplies to the EU will be halved, and duties applied when quotas are exceeded will increase to 50%.
In addition, the Steel Action Plan is considering the option of restricting scrap exports. The Eurofer steel association proposes to introduce export duties. Incidentally, the European Commission has recently begun preparing restrictive measures that will be imposed on aluminum scrap exports.
From the point of view of sensus communis, European steelmakers receive a minimal amount of Ukrainian scrap, with the lion’s share transiting through ports to Turkey and India. In other words, Ukraine and the European Union are together “feeding” their competitors in the steel industry with their own hands. That is why Eurofer considered the possibility of initiating the introduction of a certain fee for the re-export of Ukrainian scrap from the territory of the bloc. However, the Brussels bureaucracy works slowly, and Ukrainian steelmakers need effective measures to stabilize the market in the context of military operations “yesterday.”
– By “scrap exporters,” do you mean those companies that do not publish their financial statements? Those “one-day” companies that are very often recognized by tax authorities as risky enterprises? Those LLCs that have no equipment or employees for production activities?
In this context, it should be recalled that the relevant law “On Scrap” establishes the priority of supplying Ukrainian steel enterprises with raw materials, which is achieved by restricting exports. Moreover, this year, for the first time, the balance of demand and consumption of scrap on the domestic market was not approved, and this happened precisely because of the scrap dealers, who blocked the provision of data on their part in every possible way.
According to estimates by Ukrmetprom, there is a scrap shortage on the market, which amounted to 180,000 tons over nine months. Domestic enterprises are producing less than they could due to a lack of raw materials, replacing them with cast iron, which increases the cost of production. Keeping scrap within the country will make it possible to increase production, reduce costs, and increase tax revenues.
It is obvious that the state’s economic policy should be aimed at stimulating the export of processed products, not raw materials. The export of raw materials is the most primitive economic model, typical of the world’s poorest countries. That is why efforts should focus on keeping scrap in Ukraine — the main raw material without which steel production is impossible — rather than on exporting it.
Setting a zero quota for 2026 is economically justified: steel made from recycled scrap and exported brings in 8–10 times more revenue to the budget than raw scrap exported in transit through the EU. According to our estimates, the loss of foreign exchange earnings under this scheme amounted to $0.5–1.1 billion over nine months.
In addition, the social factor should also be taken into account. The vast majority of steel plants are located in frontline regions, and some even in areas of active combat operations. They provide tens of thousands of jobs in these areas, and one job in steel production creates 4–5 jobs in related industries. So, to sum up, taking into account steelmakers, related workers, and their families, we are talking about providing jobs and income to approximately 1 million Ukrainians in frontline regions.
The approval process usually takes 1–1.5 months. Everyone is interested in the document coming into force on January 1, 2026, as it concerns more than just scrap. Therefore, the resolution must be adopted within the specified time frame.
– Export restrictions will increase the supply of this strategic raw material to domestic steel enterprises. In the short term, this will help steel companies maintain operational stability, increase production, stabilize solvency, and tax revenues. In the long term, it will ensure the competitiveness of the industry during the stage of European integration.
In addition, scrap is directly related to issues of ecology, the circular economy, and the reduction of CO₂ emissions, which is in line with Ukraine’s strategic priorities and EU policy.
The resolution is updated annually, and decisions are made for each product regarding the continuation of measures and quota volumes. At the end of 2026, production volumes, prices, and domestic demand will be analyzed, after which a decision can be made for 2027.
In the long term, strategic issues need to be considered, including the competitiveness of enterprises, the environment, CO₂ emissions reduction, and other aspects. Ukraine will move in this direction together with the European Union, which, as mentioned above, has planned to restrict scrap exports, and Ukraine’s policy on this issue will be consistent.
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