How can the hydrogen transition save ukrainian metallurgy?

Over the past decade, Ukrainian metallurgy has experienced a significant decline. The loss of industrial capacities—particularly major plants like "Azovstal" and the Illich Iron and Steel Works—alongside raw material deposits lost following the occupation of parts of Donbas and Crimea, has led to a more than fourfold decrease in steel production. Despite these challenges, Ukraine still has substantial potential to revive its metallurgical industry, thanks to its rich iron ore deposits and opportunities for technological modernization.

Why does Ukrainian metallurgy have potential?

Ukraine possesses some of the world’s largest iron ore reserves—ranking fifth globally and first in Europe. This positions the country to build a competitive, next-generation metallurgical industry once the war ends and logistics routes are restored.

Current global trends in metallurgy focus on reducing CO₂ emissions, increasing energy efficiency, and improving environmental safety. The European Union has imposed strict environmental requirements, notably through the Green Deal initiative, which aims to reduce CO₂ emissions in steel production to 0.25 tons per ton of steel by 2050. Starting in 2026, a carbon tax will also be imposed on imported goods, making traditional steel production much more expensive.

To remain competitive in the international market, Ukraine must transition to “green” metallurgy—steel production with minimal CO₂ emissions—by leveraging hydrogen and electrometallurgy.

How will “Green” metallurgy work?

While there is no single definition for “green steel,” it generally refers to steel production with drastically reduced greenhouse gas emissions. Two main decarbonization pathways are emerging for the steel industry:

Hydrogen transition – replacing traditional coke with hydrogen in the steelmaking process, significantly reducing or even eliminating CO₂ emissions.
Electrometallurgy – using electric arc furnaces powered by renewable energy sources and scrap metal to minimize carbon emissions.

However, the hydrogen transition is not yet economically viable. Producing “green” hydrogen requires substantial investments in renewable energy and supporting infrastructure.

Projects to develop “green” metallurgy are already underway in developed countries. For example, Sweden’s HYBRIT initiative aims to produce steel with zero CO₂ emissions. Similar projects are being explored in Germany, France, and the United States.

Challenges for Ukraine’s Ecological Modernization of Metallurgy

Ukraine faces several obstacles on the path to green steel production:

Lack of stable investments due to the ongoing war and associated business risks.
Limited infrastructure to support hydrogen-based steelmaking.
Dependence on raw material exports—without processing iron ore into high-tech products, Ukrainian metallurgy will not be competitive.

Positive Factors Supporting the Transition

Despite these challenges, several factors favor Ukraine’s transition to green steel:

Large iron ore reserves that enable the establishment of new production capacities.
High demand for “green” steel in Europe, which prioritizes low-carbon products.
Access to affordable “green” electricity as Ukraine further develops its renewable energy sector.

Metallurgy remains strategically important for Ukraine’s economy, and its future depends on transitioning to green steel production and adopting hydrogen-based processes. While this transition requires significant investment and modernization, it will ultimately ensure Ukraine’s competitiveness in the international market.