13 June 2024

A Green Steel pathway would turbocharge Ukraine’s post-war recovery, new study shows

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As the international community gathered this week to discuss Ukraine’s post-war recovery, University of Oxford research co-authored by Smith School MSc alumna Anastasiia Zagoruichyk says Green Steel should be on the agenda.

Rebuilding Ukraine’s ravaged steel sector - once hostilities cease - presents a golden opportunity to harness the striking economic benefits of low emissions steel production, according to researchers at the University of Oxford. In a new peer-reviewed report published today in the Journal of Cleaner Production, they demonstrate that rebuilding Ukraine’s steel sector to have near zero emissions would generate $164 billion worth of additional value compared to a pathway based on traditional coal-based steelmaking.

Furthermore, a robust green steel sector in Ukraine would have ripple effects across the entire economy, for instance through stronger supply chain links. For instance, replacing coal as the main heating source in steel furnaces with renewable energy would radically shift the centre of gravity of Ukraine’s steel industry from eastern regions towards western and southern regions, and accelerate economic growth.

Steel is a significant component of Ukraine’s economy. Before the war, Ukraine was the 14th largest global steel producer with 21.4 million tonnes of crude steel output in 2021. But its pre-war steel industry was also one of the dirtiest in the world. In 2020, the Ukrainian steel industry was responsible for 48 Mt CO2: 15% of the country’s entire COemissions. If Ukraine were to join the EU, however, it would become subject to ‘The EU Green Deal’ target for near zero-emission steel by 2030.

“Despite the war, Ukraine is forging its path towards recovery and aims to build back stronger and greener,” says Zagoruichyk, a Ukrainian national who completed her Smith School MSc in 2023. 

As researchers, we saw our role in contributing to these efforts by providing policymakers and businesses with viable pathways to decarbonize the steel industry, a cornerstone of Ukraine’s economy. My motivation was to demonstrate to the world the value of investing in Ukraine, offering assurance of its significant potential in producing green steel, while also highlighting the promising prospect of higher returns on investment if choosing green steel over coal-based methods.

In the new study, the researchers note that Ukraine has the clear potential to develop the clean energy infrastructure needed for a full green steel transition– including a robust supply of renewable energy, and green hydrogen produced using renewable energy. Ukraine also sits on vast reserves of iron ore - the main raw material needed to make steel using virgin materials - and is well located for access to European customers.

Anastasiia ZagoruichykBut successfully redeveloping Ukraine’s steel sector will require access to capital, clear climate policies, and strong regional trade links.

The researchers propose that new green steel mills would be situated in close proximity to westward cross-border railway crossings and southbound Black Sea ports, besides optimal solar and wind energy sources. This would significantly increase demand for land and sea transport services, re-routing them towards Western/EU markets, and also create new demand for the production of green hydrogen and green ammonia for fossil-free fuels.

According to the report, a full steel production recovery in Ukraine would require investment of $62 billion over 20 years: $45.9 billion for renewable energy infrastructure, $6.6 billion for energy storage, and $9.5 billion for iron and steelmaking furnaces. However, this investment would have wider effects: in 2021, for every $1 invested in Ukraine’s basic metals industry, an additional $3.28 was generated elsewhere in the economy.

The World Bank estimates that Ukraine’s full post-war recovery and reconstruction needs will require $486 billion. Thus, by comparison, Ukraine’s green steel investment needs amount to 6% of the country’s total post-war reconstruction needs over the first 10-year period.

As a positive step forward, a recent commitment by domestic players (including large Ukrainian steelmakers Metinvest and ArcelorMittal) of $35bn into the medium-term green steel transition strategy until 2035 means the outstanding amount needed would be significantly lower (Metinvest, 2023).

Ultimately, Ukraine could provide an ideal blueprint for an urgently-needed global transition towards low-emission steel production. Globally, steelmaking produces more CO2 than any other manufacturing and construction industry, comprising around 8% of total global emissions – 2.8 Gigatons of CO2 per year. In comparison, international aviation transport accounts for 2.5% of global CO₂ emissions.

Prospective international donors and private investors gathered in Berlin on 11-12 June for the Ukraine Recovery Conference 2024 - a high-level annual political event that aimed to mobilise international support for Ukraine.

“As a result of Russia’s attacks and the destruction of half of Ukraine’s power generation capacities, the Ukrainian government is compelled to prioritize distributed energy resources, such as wind and solar,” says Zagoruichyk. “The recent Ukraine Recovery Conference in Berlin was entirely dedicated to this crucial shift. This strategy marks a significant step in the right direction, which can eventually help accelerate the steel sector’s green transition.”

The study ‘Techno-economic optimisation of steel supply chains in the clean energy transition: A case study of post-war Ukraine’ has been published in the Journal of Cleaner Production.


As the international community gathered this week to discuss Ukraine’s post-war recovery, University of Oxford research co-authored by Smith School MSc alumna Anastasiia Zagoruichyk showed how Green Steel should be on the agenda.