Implementation of European standards in Ukraine’s steel industry: Interpipe’s perspective

Ukraine’s accession to the European Union opens up new opportunities for domestic businesses, whilst at the same time presenting them with significant challenges. The implementation of European standards in the steel industry requires a measured approach, time and dialogue with the authorities. During her speech at the forum ‘Regional dialogues with business on European integration: The steel sector’, Natalia Sydoruk, GR Director, spoke about how the industrial company Interpipe is preparing for this process and what it expects from the state.

Key areas of implementation

Ukrainian companies have long been closely monitoring developments in the EU regulatory framework. Many of them, including Interpipe, have assets in the EU and simply cannot operate effectively without this monitoring. Full cooperation with government bodies, particularly regarding the implementation of EU standards, must become a key element of their work.

Interpipe supports the view of the Director General of the Government Office for Coordination of European and Euro-Atlantic Integration that three key sections of the general programme for the implementation of EU standards into Ukrainian legislation can currently be identified, which are important for the activities of Ukraine’s steel industry.

1. The environment and climate change

Interpipe is fully aware of the scale of the work involved in implementing the European environmental requirements it faces. At the event, we heard that one of the key elements of the negotiations will be the definition of transition periods for the introduction of various standards. Therefore, our request to the government bodies is simple — to ensure that transition periods are in place and of sufficient duration to allow the company to gradually adapt to the changes. After all, the conditions under which Ukrainian enterprises operate differ significantly from those in which European companies have developed.

2. Entrepreneurship and critical raw materials

This section specifically mentions the EU regulation on critical raw materials. Within the European Union, the term ‘critical raw materials’ encompasses not only rare-earth metals or any other specific products. Any material that is essential to the functioning of a particular industry is classified as a critical raw material.

Interpipe’s production process also involves a raw material component — ferrous scrap, which is extremely important for the production of steel and, subsequently, high value-added products. Therefore, the implementation of the European regulation on critical raw materials will be a matter of close attention for our company.

3. Competition policy

The authorities in Brussels have already identified a specific set of measures for the Ukrainian government to implement, under which the latter undertakes to draw up and establish certain rules for domestic enterprises. However, it is clear that the EU will not propose that Ukraine implement measures that promote business development.

The European Steel action plan

The European Steel Action Plan deserves special attention. Although this document is not a regulatory act, it examines in detail several areas of fundamental importance to the development of the European steel industry.

Regulatory acts are already being drafted and adopted in these areas. For example, in May, a new regulation on the regime for trade in steel and imports into the EU (replacing the old safeguard) was adopted; its adoption took place in accordance with this strategic Steel Action Plan.

A significant part of the support for the EU steel industry is implemented through State Aid. This is precisely why the implementation of the relevant EU regulations into Ukrainian legislation is so important for the purpose of establishing a business support system in line with EU standards — after all, regardless of their size, both large and small companies find themselves in extremely difficult circumstances at certain times.

In reality, however, Ukraine needs a similar strategic plan not just for the development, but also for the support of the steel industry.

The situation in combat zones

I would like to draw particular attention to the situation in regions that have been officially designated as active combat zones. One of Interpipe’s plants is located in the city of Nikopol, just a few kilometres from the front line. The situation there is extremely difficult.

If the state aims to preserve and sustain production in such regions and cities, it is necessary to establish a system of support for the industry based on principles similar to those in Europe.

General stance and readiness for cooperation

There are a great many European regulations to be implemented. Interpipe understands their necessity and is ready to play an active part in this work.

At the same time, the company insists on the need to closely monitor those aspects that can genuinely contribute to the development of the Ukrainian steel industry, rather than merely replicating regulatory frameworks designed for the realities of the European Union.