Quota cuts plus CBAM tighten the squeeze on Ukrainian steel as exemption appeals mount

Ukraine's steel industry has put corporate specifics behind its warning that EU trade measures are compounding wartime losses. GMK Center reported on August 14, 2026, citing Reuters interviews with Metinvest chief operating officer Oleksandr Myronenko, that cuts to the EU's steel import quotas and the Carbon Border Adjustment Mechanism together are squeezing producers already absorbing Black Sea logistics losses, a 30 percent rise in rail freight tariffs from August 2026, and the Russian strike on the Zaporizhstal plant in which seven workers were killed and operations were suspended.

Industry associations Ukrmetallurgprom and the Federation of Employers of Ukraine have responded by formally urging the government in Kyiv to secure EU exemptions. The appeals arrive two weeks after Pascal Lamy's public call for a Ukraine carve-out, and they matter to three audiences: Ukrainian exporters absorbing the pressure, the EU importers who buy from them, and policy watchers tracking whether the autumn trilogues reopen a question Brussels has so far answered with no. The full exposure picture sits in the CBAM Ukraine country guide.

What Metinvest describes: five pressures arriving at once

Metinvest's account, given to Reuters and reported by GMK Center on August 14, is that the EU quota cuts and CBAM are landing on top of three wartime burdens: lost Black Sea logistics, higher rail tariffs, and the strike on Zaporizhstal. The five pressures and their reported figures are set out in the table below.

The quota side of the squeeze is the newest. The EU's suspension of import duties after Russia's full-scale invasion in 2022 was crucial to maintaining stable production at Zaporizhstal and other steelworks, Myronenko told Reuters, and the situation is now changing dramatically: instead of support from the EU, in his account, the industry is facing restrictions. The stakes are structural. Steel products account for 15 percent of Ukraine's total exports, and the EU is their main market, taking around four-fifths of that volume, per GMK Center.

CBAM works differently from the quota regime, and the distinction matters for how the squeeze compounds. The mechanism, in its definitive phase since January 1, 2026, places a certificate obligation on the EU importer, priced from the EU ETS, rather than a duty at the border. The commercial effect still reaches the Ukrainian producer through the buyer's total cost of Ukrainian material. Kyiv has pressed the European Commission for a delay to CBAM's implementation or an exemption from its provisions without success, per GMK Center analysis, and Myronenko described implementing Metinvest's 15-year, USD 8 billion modernisation plan as unrealistic in the context of the war.

Zaporizhstal weighs a pig-iron pivot that dodges quotas but not CBAM

Zaporizhstal may shift output toward pig iron, a semi-finished product the European quotas do not cover, and Myronenko says that pivot would mean operating at roughly 50 percent below capacity. Speaking to Reuters before the latest strike on the plant, Myronenko said that increasing pig iron production might be one way for the company to adapt to the new EU restrictions, per GMK Center.

The pivot solves only half the problem. Pig iron sits outside the steel import quotas but inside CBAM: CN code 7201 is listed in Annex I of Regulation (EU) 2023/956, so pig iron shipments carry embedded-emissions obligations for the EU importer just as finished steel does. A quota-driven shift down the value chain therefore trades tariff exposure for a larger share of revenue in a lower-margin product that remains carbon-priced. The strategic options by production route, and why semi-finished exporters cannot route around the mechanism, are set out in the guide for steel exporters to the EU.

Myronenko's pig-iron comments predate the strike reported by GMK Center, citing Reuters, in which seven workers were killed and the plant's operations were suspended. Direct Russian strikes on factories are forcing costly cycles of production stoppage and resumption, GMK Center reports, so the quota math is now being done at a plant that is not currently running.

The appeals to Kyiv and the numbers behind them

Ukrmetallurgprom and the Federation of Employers of Ukraine are formally urging the Ukrainian government to secure EU exemptions, with the sector, in GMK Center's summary, focused on survival rather than growth. The warnings behind the appeals are stark: ArcelorMittal Kryvyi Rih chief executive Mauro Longobardo has said that without exceptions or deferrals, Ukrainian producers' access to the EU market will be permanently blocked within five years, per GMK Center.

The asks reported so far cover two fronts:

• Exemptions for Ukraine from the EU trade measures, which Ukrmetallurgprom and the Federation of Employers of Ukraine are urging the government to secure, per GMK Center citing Reuters
• A delay to CBAM's implementation or an exemption from its provisions, the relief the Ukrainian government has so far failed to persuade the European Commission to grant, per GMK Center analysis

Export data gives the appeals their urgency. A GMK Center analysis reports that Ukrainian long-product exports fell about 42 percent year-on-year in the first half of 2026, and that ArcelorMittal Kryvyi Rih saw roughly 300,000 tonnes of cancelled orders, with the analysis putting CBAM costs at USD 60-90 per tonne. GMK Center research further projects total Ukrainian steel export losses of USD 1.75 billion and cumulative CBAM payments of EUR 1.2 billion over 2026-2030 if nothing changes. The USD 60-90 range describes the mechanism's trajectory rather than its current-year bill: with the 2026 CBAM factor at 2.5 percent and free allocation covering the remaining 97.5 percent, the certificate cost on a tonne of blast furnace steel is under €4 at the Q2 certificate price of €75.28/tCO₂e. The gap between those two numbers is the commercial story: buyers are contracting against the escalation path to 2034, not against this year's cost. The mirror image is visible on the EU side, where Salzgitter says CBAM is already lifting prices and cutting imports.

Where the exemption question stands before the autumn trilogues

The appeals land two weeks after Pascal Lamy's call for a Ukraine CBAM exemption tied to decarbonisation milestones, and against a record of institutional refusal. The record stands as follows:

• In December 2025, the Commission declined Ukraine's request for force-majeure relief from the definitive regime that began on January 1, 2026.
• The ENVI position adopted on July 6, 2026 offers least-developed countries simplified reporting, treatment examined in the guide to CBAM and developing countries, but contains no Ukraine exemption.
• Lamy's milestone-conditioned design remains a proposal without a sponsor in either co-legislator's text.

Trilogues on the CBAM review are expected after the European Parliament's September plenary fixes its negotiating mandate. Trilogues are where open items get settled, from the product list of the CBAM downstream expansion to the review's contested flexibilities, and a Ukraine provision could enter the package there even though neither position currently contains one. What has changed since July is the register of the demand: it now comes with corporate operating data, a casualty toll, and formal petitions from the two main industry bodies, not only a former trade commissioner's argument. Ukraine is also not the only exporter pressing for accommodation before the same deadline, as Korean steel faces USD 4 billion in CBAM exposure and a narrow window to escape it.

For importers and exporters, nothing changes today. Ukrainian steel and pig iron remain fully covered, certificate obligations accrue against 2026 imports, and the first declaration falls due on September 30, 2027. This site will report whether the autumn texts pick up what Kyiv is now being asked to demand.