The Verkhovna Rada has decided to extend the export duty on scrap metal

This bill No. 5175 as a basis and as a whole on Tuesday, April 27, was supported by 291 MPs with the minimum required 226. The customs duty in the amount of 58 euros /ton will be valid for the export of steel scrap for another 5 years, until September 2026 …

One of the authors of the bill, Deputy Chairman of the Verkhovna Rada Committee on Economic Development Dmitry Kisilevsky, commenting on the parliament’s decision on his Facebook page, noted the critical importance of steel scrap for the operation of the Ukrainian mining and metallurgical complex, which gives about 10% of GDP, 35% of merchandise exports and 200 thousand workers places.

“Only the export of products with high added value will allow us to become a strong and rich country. In this case, 1 ton of exported scrap gives Ukraine a little less than 2 thousand UAH (this is the payment of a duty of 58 euros). Whereas 1 ton of scrap of the same scrap processed into finished steel products at Ukrainian steel plants brings about UAH 8,000 in taxes. That is, it is 4 times more profitable for the state to process scrap into metal and then into finished products than to export raw materials, ”D. Kisilevsky stressed.

He added that the value of scrap as a raw material for metallurgy increases the EU’s green course: the use of scrap in electric arc furnaces reduces CO2 emissions by up to 10 times compared to classical technologies of steel production in converters and open-hearth furnaces.

“And since Ukraine undertakes obligations to reduce CO2 emissions, it is necessary to take care of the resources for this. As other countries are already doing. By the way, the European Metallurgical Association Eurofer generally demands to ban the export of scrap metal from the EU, taking into account the green course of the EU, ”said the People’s Deputy.

D. Kisilevsky stressed that the bill does not contradict Ukraine’s international obligations – it is a temporary measure that is not discriminatory. “It complies with the WTO law on security exceptions: we have a war, Crimea is annexed, a chronic trade deficit. International partners are aware of this. Therefore, during the period of the duty since 2016, no claims have been made against Ukraine, ”summed up the deputy head of the Verkhovna Rada Committee on Economic Development.

Let us remind you that 17 MPs are the authors of the bill. The parliamentarians noted that thanks to the increased duty, domestic consumers received sustainable access to raw materials. If in 2015 the physical volumes of export of scrap metal procured in Ukraine amounted to 39.1% of its domestic consumption, then in 2017 this share decreased to 15.1%, in 2019 – to 1.4%, and according to the preliminary results of January -November 2020 was only 1.27%.

The deficit of scrap in the Ukrainian market decreased from 0.85 million tons in 2015 to 0.6 million tons in 2016 and 0.3 million tons in 2017, and since 2018 Ukrainian metallurgists have not reported a deficit with the provision of scrap procured in Ukraine …

The preservation of the export duty at the level of 58 euros /ton, according to the authors of the project, will ensure: the preservation of 21.5 thousand jobs and the creation of 3.5 thousand new jobs;
additional GDP growth of 0.03% due to the growth of metallurgy and related industries;
avoiding a shortage of scrap metal in the domestic market; reduction of energy consumption and CO2 emissions; attracting additional investment in the metalworking industry of Ukraine, in particular, the technological re-equipment of fixed assets of metallurgical enterprises, which is of particular relevance in the context of the European Green Deal.

The Verkhovna Rada in September 2016 supported the introduction of a duty on the export of scrap in order to stabilize the work of the Ukrainian mining and metallurgical complex. In accordance with the law then adopted, the duty ends in September 2021.

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