Cheap Russian raw materials undermine EU's green steel transition – Ukraine's Metinvest
Ukrainian mining and metallurgical group Metinvest has called on the EU and Ukraine to impose a full ban on the import of Russian iron ore and semi-finished steel products, warning that low-cost Russian raw materials are jeopardizing the EU's green transition in the steel industry.
"Iron ore extraction and steelmaking are the second-largest contributors to Russia's GDP and state budget. This means Europe continues to fuel the Russian budget, which is used to expand its military capabilities," said Metinvest's compliance officer, Angelina Chachuna, at the "Business vs. Sanctions" conference in Kyiv.
Despite existing restrictions on Russian metal imports, EU countries purchased Russian steel products worth EUR 2.9 billion in 2023 and EUR 2.6 billion in 2024.
Over the past three years of full-scale war, EU countries have spent more than EUR 5 billion importing Russian steel slabs used for further processing. Belgium accounted for 42% of these volumes, followed by Italy, Denmark, the Czech Republic, and France. The main buyers were plants owned by major Russian metallurgical groups operating in these countries.
"Sanctions on Russian steel slabs are in place but include a transition period, so their purchase is still allowed. EU directives don't prohibit it – it's up to individual countries or companies," Chachuna explained.
She added that Russian slabs are on average EUR 80 cheaper than those from other suppliers, thanks to access to low-cost gas, electricity, and labor. While some EU countries have stopped buying Russian semi-finished steel in favor of more expensive alternatives from the EU, Türkiye, or China, others continue to import, creating unfair competition.
"This is harming European steelmakers and will have more severe consequences in the future," Chachuna said. The EU aims to transition to green steel production by 2030, which will require billions in investment. Companies that fail to modernize will face high surcharges, making their products uncompetitive – even within the EU.
"In such conditions, the availability of cheap Russian slabs undermines the motivation for eco-friendly production and threatens the EU's climate goals," she warned, calling for a complete ban on Russian iron ore and semi-finished steel imports.
"We all understand that current sanctions are not enough. The transition period must be shortened. Until a full ban is enacted, additional tariffs should be imposed on all Russian metal products. Imports of other metallurgical goods from the aggressor state must also be limited – this will significantly reduce funding for the war," Chachuna said.
She also noted that European companies' rhetoric about leaving the Russian market has changed over the course of the war.
"At first, European businesses declared their exit from Russia, then spent a year in the process. Now they are implementing whatever is not explicitly prohibited by EU directives. Ukrainian businesses, meanwhile, face pressure from American, European, and domestic sanctions that restrict their rights and prospects in the EU. Without government support and dialogue with EU institutions, these initiatives will remain theoretical," Chachuna concluded.