Ukraine's post-war recovery should be driven by green steel

The researchers believe green steel, the production of steel using environmentally friendly and sustainable methods, could boost Ukraine once the war is over.

Lead author Dr Alli Devlin from the university's Department of Engineering Science, said: "The vast destruction of Ukraine's iron and steelmaking assets represents a stark opportunity to rebuild a thriving industrial sector which is independent of fossil fuels.

Ukraine is well positioned to benefit from European customers (Image: Peter Byrne/PA)

"Ukraine is well positioned to supply European green steel markets, which will provide employment throughout the value chain, and deliver returns to the economy well beyond the original investments."

The researchers found rebuilding the country's steel sector to have near zero emissions could generate $164 billion more in Gross Value Added compared to a traditional coal-based steelmaking route.

Replacing coal as the main heating source in steel furnaces with renewable energy would also shift Ukraine’s steel industry from eastern regions towards western and southern regions, and accelerate economic growth.

Ukraine was the world's 14th largest steel producer before the war, with 21.4 million tonnes of crude steel output in 2021.

However, its pre-war steel industry was also one of the most polluting, accounting for 15 per cent of Ukraine’s total carbon emissions in 2020.

In the new study, the researchers note Ukraine has the potential to develop the clean energy infrastructure needed for a full green steel transition - including a 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.

The researchers propose that new green steel mills would be situated close to westward cross-border railway crossings and southbound Black Sea ports, besides optimal solar and wind energy sources.

According to the report, a full steel production recovery in Ukraine would require investment of $62 billion over 20 years.

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

Dr Vlad Mykhnenko, who co-authored the study, said: "Green steel would become a sustainable growth promotion machine for Ukraine’s post-war development, and would generate almost twice as much economic growth than the traditional coal-based steel.

"This means more income and higher living standards for all Ukrainians. The capital needed will repay itself many times over, so private investors will benefit, too."