Cement companies need support regarding electricity transmission tariffs

Rising electricity prices negatively affect all energy-intensive export-oriented industries, including cement manufacturers. What does the cement industry propose to solve this problem?

GMK Center presents the main points of the speech by Lyudmila Kripka, Executive Director of the Ukrcement Association, at the round table “Ukraine’s electricity market: challenges for industry and the iron and steel complex.”

The state of the cement industry in Ukraine

The cement industry is not operating at full capacity – only 60-70% of our capacity is currently being utilized. This indicator has remained at this level for the past three years due to low demand and many problems, as in all other large industrial enterprises: with electricity, personnel, etc.

The opportunity to export is now an opportunity for us to survive. First, it supports domestic production and generates foreign exchange earnings, which allows us to pay taxes to the budget and support both the state economy and our military.

The problem of raising electricity price caps

Raising electricity price caps by 67% will have significant negative consequences for industry, especially in the context of full-scale war and destroyed energy and infrastructure. Such a sharp increase in prices is not justified, since the actual prices of the day-ahead market during the evening peak do not reach the price caps.

According to our calculations, in May-June 2025, the weighted average prices were 5.3-8.9 thousand UAH per MWh at the current rate of 9 thousand UAH. Accordingly, the thesis about price restrictions is not confirmed, and any unjustified price increase poses a threat to the survival of industry.

In conditions of high consumption in the evening hours and limited competition, raising price caps creates risks of manipulation by generators. In addition, price increases will not lead to an increase in electricity imports due to technical and regulatory factors.

Furthermore, in the European Union, companies receive compensation for high energy costs; in particular, the cement industry receives compensation for reducing CO₂ emissions. In Ukraine, there is no state support in this regard.

Proposals for state support

We propose developing state support instruments for energy-intensive export-oriented industries as temporary anti-crisis measures.

• Preferential tariff setting mechanism. In order to support the decarbonization of industry, the development of cement production using electricity from renewable energy sources in Ukraine, and the unification of approaches to energy-intensive sectors, we propose developing a mechanism for preferential tariff setting for the transmission of electricity to industrial enterprises, following the example of electrometallurgical enterprises.
• Technical and economic criteria. Introduction of criteria according to which enterprises could claim to be equated with priority industries. This will allow the funds saved from the reduction in the electricity transmission tariff to be directed towards investments in renewable energy sources and cogeneration plants. It will also help reduce the load on the power system, increase the energy efficiency of enterprises, and achieve national decarbonization goals. Under such conditions, we will become competitive with European enterprises.