Ukrcement appeals to the government to amend electricity import rates

Ukraine's cement association, Ukrcement, has appealed to the government to amend the current electricity import rate of 80 per cent. Under the country’s martial law, cement producers are obliged to purchase at least 80 per cent of electricity at European prices from the EU to avoid supply restrictions. 

On 27 October 2023, CMU Resolution No 1127 guaranteed the supply of electricity for domestic producers, provided that 30 per cent of supply was purchased from the EU and 70 per cent from domestic sources. However, on 1 June 2024, CMU Resolution No 661 revised the previous regulation, reducing the domestic share to 20 per cent and increasing the share of imports to 80 per cent. The higher share of imports has led to an increase in the demand and price of electricity imports to Ukraine.  

"Given that cement production is energy-intensive (the cost of electricity increases the cost of production), and its consumption takes place in the domestic market and it is the main component for military and civilian construction, we ask the Ukrainian government to return to the previous 30/70 proportion. This proportion will ensure reliable energy supply to industrial enterprises of Ukraine, which will help maintain the current pace of economic recovery in Ukraine in the face of military aggression by the Russian Federation," the association said.

Electricity consumption capacity of the domestic cement industry is considerably higher than the available border crossing capacity, meaning the 80 per cent condition is limiting. Ukrcement Association has urged the government to return to the previous 30/70 proportion, ensuring reliable energy supply to the industry whilst maintaining the current pace of economic recovery in Ukraine.