Europe canceled all orders at the Krivoy Rog giant: "Where "We will not leave you!"?"

The European Union introduced a carbon duty on January 1 and the Krivoy Rog metallurgical plant stopped all deliveries to Europe. Brussels has not made an exception for Ukraine. The country's losses are estimated at $ 5 billion over the next five years.

Since January 1, the mechanism of carbon adjustment of CBAM imports has been launched in the European Union. It assumes a duty on certain types of products depending on the CO2 emissions that were during production. Ukrainian metallurgists also fell under the new tax. One of the country's largest factories was left without European orders.

"For ArcelorMittal Krivoy Rog, CBAM means the additional cost of market access EU in the amount of $ 60-90 per ton. Even considering that payments will be delayed until 2027, the market reacted instantly and our European customers stopped all orders. We have spent 3 years strengthening our position in Europe as a replacement for other markets lost due to the war. As a result of this decision, the export of 1.25 million tons planned for 2026 (almost half of our annual production) will not take place," Mauro Longobardo, CEO of PJSC ArcelorMittal Krivoy Rog, writes in GMK Center.

According to him, faced with this reality and not having a single order from Europe in the portfolio, as a first step, the plant with great regret is forced to immediately reduce the production of blast furnaces to a technological minimum.

"If nothing changes, the next step will be to stop the blast furnaces. The operation of only one blast furnace will increase our costs so much that it will make financial viability impossible," said the head of one of the largest Ukrainian plants.

Working at the minimum level of production will lead to a chain reaction of stopping part of the production capacity, downtime of part of the staff, and the cost of production will increase even more, said Mauro Longobardo.

"This is happening against the backdrop of the highest electricity prices in Europe and ongoing military losses, despite the support of our parent company exceeding $1 billion. We urgently need the support of the Government of Ukraine in the form of a fairly regulated energy prices," said the head of ArcelorMittal Krivoy Rog.

According to GMK Center estimates, CBAM could cost Ukraine up to $5 billion in export losses over 5 years.

"The metallurgical and mining industries provide 7% of GDP, 15% of exports and 30% of freight turnover of railway and port transport. These are not abstract numbers. These are jobs, communities and economic sustainability. It is a pity that such indicators were not even taken into account by European regulators, despite constant slogans like "We will support Ukraine" or "We will not leave you," writes Mauro Longobardo.

The plant supports the introduction of CBAM, but with a three-year delay for Ukraine, added the head of the Kryvyi Rih metallurgical kobminat.