The Federation of Metallurgists of Ukraine (FMU) firmly states, “The position of metallurgists is clear: we cannot open exports until tariff issues are addressed,” highlighting their concerns regarding the export of scrap metal.
FMU representatives elaborated on their stance, emphasizing the distinction between exporting raw materials and processing them domestically. According to industry estimates, processing one ton of scrap metal can yield around 15,000 UAH in taxes and approximately $1,200 in foreign exchange earnings, compared to about $250 to $350 earned from direct exports, which results in lower fiscal contributions.
Reports indicate that previously, substantial amounts of Ukrainian scrap metal were exported to the European Union under preferential terms, leading to inadequate fiscal benefits for the state, according to industry perspectives.
As a result, the FMU advocates for the implementation of export tariffs on all supply directions, regardless of the destination country. They assert that restoring such a mechanism is a prerequisite for reconsidering the current zero quota on scrap metal exports.
The demand from Ukraine’s metallurgical enterprises for scrap metal has decreased due to production halts and declines following Russian attacks. However, the FMU anticipates an increase in demand as operations resume.
Furthermore, the importance of scrap metal for the metallurgy sector may rise as the industry transitions to technologies that produce lower carbon emissions and adhere to the Carbon Border Adjustment Mechanism (CBAM). Utilizing secondary raw materials can help reduce the carbon footprint of production.
The FMU stressed that they are not against exports in general but insist on a different order of decision-making. “We are not against exports. We are emphasizing the sequence of decisions: first, the state must legislatively restore effective export tariffs applicable to all directions, and only afterward can the zero quota be reconsidered,” stated federation representatives.
