Exclusive Ukrainian steel sector has withstood war, but now it needs Europe’s fairness

CBAM and steel import quotas were designed to protect European producers, but now they risk hurting a future EU member’s industrial backbone

I’d like to reflect on the recent study at GMK Center of challenges that European and Ukrainian steelmakers are facing.

For more than four years, Ukraine’s steel industry has worked in conditions that would have stopped many businesses elsewhere: missile and drone attacks, blackouts, broken logistics, a shortage of skilled people, and production sites operating close to the front line. The industry did not ask for applause. It kept producing, paying taxes, preserving jobs, and supporting economy of the country.

But we don’t have an unlimited resource of resilience. This year the situation has deteriorated significantly. In 4m 2026, Ukraine’s crude steel production declined 7.4% year over year. At ArcelorMittal Kryvyi Rih, CBAM immediately put at risk 1.25 mln tonnes of planned exports to the EU this year, almost half of our expected output. Ukrainian exports of long steel products fell by 60.5% year over year in Q1 2026. Our plant’s losses exceeded UAH 4.6 bln in the same quarter. These are not isolated figures. They describe a system operating under constant pressure.

Unfortunately, this pressure is connected to actions of the EU, in particular CBAM introduction and tightening TRQs. But Ukraine is not a “third country” for the EU – Ukraine is a future EU member. Ukrainian and EU steelmakers are not on opposite sides of the table. Our steel industries face many similar challenges: high energy prices, pressure from cheaper imports, deteriorating steel demand, trade restrictions in export markets, and the enormous cost of decarbonization. Europe is right to protect its steel industry from global overcapacity and unfair competition, but it is a bad idea to weaken the Ukrainian part of its future industrial base.

The new EU steel safeguards is a new barrier just when Ukrainian steel needs access to the EU market to survive. The same is true of CBAM. ArcelorMittal Kryvyi Rih has invested for years in environmental modernization and has reduced emissions significantly since privatization, but the war has destroyed the normal investment logic. A plant that is working in conditions of blackouts, security risks, disrupted logistics, labor shortages cannot modernize on the same timeline as an European producer working in peace.

We see a European paradox here. CBAM and the EU’s tariff-rate quota system were designed to protect European industry. However, now they risk hurting a European company operating in a country which is an EU candidate, with accession negotiations already opened. The EU supports Ukraine politically, at the same time Ukraine is losing access to European market. I can’t explain this situation.

Ukraine is not asking Europe to abandon its climate or trade policy. We hope only for fair treatment under extraordinary circumstances. In particular, a temporary CBAM waiver for Ukraine and a reasonable approach to steel quotas. From Ukrainian government we expect protection of the Ukrainian domestic market from dumped imports and energy policies maintaining competitiveness of domestic production.

This is not about supporting one enterprise. It is about preserving the real sector of an economy at war. Future Ukrainian reconstruction is impossible without steel: bridges, housing, railways, power infrastructure, industrial facilities will all depend on it. Local communities need industrial jobs. When such jobs are lost, communities lose stability and confidence in the future. This is also a matter of sovereignty and European resilience. A weakened Ukrainian steel sector would make both Ukraine and Europe more dependent on external suppliers at a time when strategic autonomy and secure industrial value chains matter more than ever. Weakened Ukraine will require more European assistance funding which will be a burden on European taxpayer.

Helping Ukrainian steel industry today means helping a future EU member preserve industrial base it will need tomorrow. It also means proving that Ukraine’s path to the European Union is not only a political promise, but an economic reality.Partnership between the EU and Ukraine in steel sector would create mutual economic benefits. Ukraine would gain the predictability needed for investment, modernization, and decarbonization, while the EU would gain a reliable industrial partner and stronger regional supply chains. In this sense, fair treatment for Ukrainian steel industry is not only support for Ukraine – it is a smart investment in Europe’s own industrial resilience.