The European Union is set to implement a new steel import regulation starting July 1, which could significantly impact Ukrainian steel producers’ ability to export to the EU. Estimates suggest that Ukraine’s export losses could reach up to €1 billion annually, although there remains potential for negotiations to alleviate some of the pressure on the industry.
The EU Council has approved a regulation that reduces the overall European import quota for steel to 18.3 million tons per year. Suppliers exceeding this limit will face a hefty 50% tariff on their shipments.
Details regarding the specific conditions for Ukraine are still being finalized. According to Forbes, citing Financial Times, the European Commission proposed a duty-free quota of 713,000 tons annually for Ukraine. This figure is significantly lower than the 2.6 million tons that Ukrainian producers exported to the EU in 2025.
Stanislav Zinchenko, CEO of GMK Center, pointed out that the EU remains the primary export market for Ukrainian steel, accounting for 79% of total exports last year, with certain categories exceeding 90%. He warned that if the proposed quota of 713,000 tons is enforced, steel production in Ukraine could decline by approximately two-thirds, potentially leading to the shutdown of three of the six blast furnaces currently operational in the country.
Additionally, the implementation of the Carbon Border Adjustment Mechanism (CBAM), which is set to take full effect in 2026, poses another risk to the industry. Forbes notes that the new quotas combined with CBAM create a dual barrier for Ukrainian producers in the European market.
Alexander Kalenkov, president of the Ukrainian Metal Industry Association, emphasized that the repercussions could extend beyond the steel sector. He warned that the cumulative effect of these restrictions could cost Ukraine up to 3% of its GDP by 2030, with production cuts threatening jobs in related industries.
Negotiations between the EU and Ukraine are ongoing, with several rounds of consultations already completed under the World Trade Organization framework. The Ukrainian side is advocating for consideration of its unique status as an EU candidate country currently engaged in a full-scale war. Among the options being discussed are the complete exemption of Ukraine from the new restrictions, a temporary suspension of the tariff mechanism, or the establishment of special quotas for Ukrainian manufacturers.
However, European experts consulted by Forbes believe the most likely outcome will be a separate quota for Ukraine that exceeds the initially proposed 713,000 tons but remains below the actual export volumes to the EU in 2025.
Key players in the steel market, particularly from countries with strong steel production like France, Spain, and Belgium, accounted for 75% of the market supply last year. It is crucial for the Ukrainian government and businesses to maintain a bilateral dialogue with these nations to demonstrate that Ukrainian products do not pose a threat to their markets.
In a related development, ArcelorMittal Kryvyi Rih has indicated that the full implementation of CBAM and the new EU quota system could severely weaken the position of Ukrainian steel on the European market. The plant has already lost 300,000 tons in export orders to the EU in the first quarter of 2026, and under unfavorable conditions, total losses for Ukrainian steel producers could exceed $1 billion annually.
Analysts have noted that in 2024, the steel industry contributed 7.2% to Ukraine’s GDP, generating $6.4 billion in exports, which accounted for 15.4% of the total export volume, and approximately $1 billion in tax revenues. Despite the looming risks, the mining and metallurgical enterprises invested $650 million, representing 18.3% of all capital investments in the industry.
The EU's new steel import regulations, effective July 1, threaten to drastically reduce Ukrainian steel exports, potentially costing the industry up to €1 billion annually. Ongoing negotiations may yield some concessions, but the outlook remains challenging for Ukrainian producers.