UkrFA calls for pilot implementation of state support for the electric steel industry

The Ukrainian Association of Ferroalloy and Other Electrometallurgical Products Manufacturers (UkrFA) has appealed to the government and Prime Minister Yulia Svyrydenko regarding the critical situation in the electrometallurgical industry and the possibility of piloting state support mechanisms.

UkrFA notes critical problems at enterprises in the industry, in particular at one of them – a member of the association from the combat zone.

As noted, the ferroalloy and electrometallurgical industry is a strategic component of the full-cycle economy and an important link for post-war recovery tasks.

The situation in the industry is complicated by the constant increase in electricity tariffs (transmission, distribution, application of price caps), the lack of preferential lending for enterprises operating in the combat zone, and mechanisms for compensating investments in alternative energy projects.

The situation was further exacerbated by the NEURC resolution of January 16, 2026, which set a maximum price limit of UAH 15,000/MWh from January 17. This effectively threatens to bring the country’s ferroalloy and electrometallurgical enterprises to a complete standstill.

The association specified that the share of electricity costs in the cost of production of electrometallurgical enterprises was 34% in 2023, 38% in 2024, and almost 40% last year. With an average price of over UAH 1,800/MWh (excluding VAT and transmission and distribution tariffs), the production of basic products becomes unprofitable and loses its competitiveness.

The UkrFA also drew attention to the fact that European ferroalloy producers receive state subsidies and benefit from preferential support mechanisms for energy-intensive industries.

«Given Ukraine’s European integration course and future access to relevant EU programs, we consider it expedient to study the experience of European countries and consider the possibility of adapting certain state support mechanisms in Ukraine. We propose to consider the possibility of conducting an experiment with the introduction of such mechanisms on a pilot basis at the Nikopol Ferroalloy Plant JSC, which is currently operating in extremely difficult conditions,» the letter says.

Despite all the challenges, companies in the industry continue to fulfill their social and fiscal obligations.

The association considers it expedient to introduce a preferential lending program at the state level and/or develop mechanisms for compensating investments in renewable energy for companies in strategic industries operating in frontline regions.

UkrFA requests that the possibility of implementing a set of measures to preserve electrometallurgical enterprises be considered, in particular:

• ensuring access for energy-intensive enterprises to long-term special contracts for the supply of electricity;
• introducing mechanisms for compensating electricity tariffs through tax instruments;
• preferential lending for projects to build alternative energy sources (gas, solar, wind), as well as energy storage systems;
• setting a preferential tariff for natural gas for metallurgical enterprises that use cogeneration plants.

In addition, the association proposes to provide automatic VAT refunds to metallurgical enterprises, introduce preferential lending to enterprises that generate electricity for the modernization of equipment, the introduction of energy-efficient technologies, and the improvement of energy independence.

It is noted that the preservation and development of Ukraine’s ferroalloy industry is directly in line with the approaches set out in European initiatives on critical minerals. UkrFA is ready for constructive cooperation with state authorities in the process of developing and implementing relevant regulatory acts.

It should be recalled that due to constant Russian shelling of energy and gas production infrastructure, prices for electricity and gas for Ukrainian industrial consumers rose significantly in 2025. For both items, they were significantly higher than for industrial consumers in the EU.