Last year, the industry’s companies spent 28% of their total budget on environmental protection

Environmental costs and investments by iron and steel companies are an important component of overall production costs. They are particularly significant in the context of decarbonization policies and green steel production.

Despite the war, rocket attacks on infrastructure, and significant logistical difficulties, Ukrainian steel companies continue to implement their plans for decarbonization and improving the environmental friendliness of their production. GMK Center had a closer look at this issue.

The iron and steel sector generates 28% of environmental costs in Ukraine

The iron and steel complex is one of the leaders in terms of environmental costs. In 2024, environmental protection costs in the field of steel ore mining accounted for 19% of the total in Ukraine. The share of steel industry was 8.6%. This means that 27.6% of all environmental protection costs in Ukraine last year were attributable to the iron and steel complex.

Environmental protection costs for steel ore mining companies in 2024 increased by 12% compared to 2022, reaching $202 million. The corresponding figure in steel industry decreased from $130 million in 2022 to $90 million in 2024, primarily due to the loss of assets as a result of the war and a decline in economic activity. Total capital investment in environmental protection in 2024 in the steel ore mining and steel sectors amounted to $38.2 million and $42.2 million, respectively.

Current expenditures by type of environmental protection measures in steel ore mining and steel industry in 2024 amounted to:

air protection, climate change prevention, and ozone layer protection – UAH 137 million and UAH 1.25 billion, respectively;

wastewater collection and treatment – UAH 1.2 billion and UAH 376 million;

waste management – UAH 4.6 billion and UAH 257 million;

protection and restoration of soil, groundwater, and surface water – UAH 522 million and UAH 45 million.

Capital investments by type of activity in steel ore mining and steel industry in 2024 amounted to:

air protection, climate change prevention, and ozone layer protection – UAH 121 million and UAH 221 million, respectively;

wastewater collection and treatment – UAH 6 million and UAH 16 million;

waste management – UAH 750 million and UAH 1.4 billion;

protection and restoration of soil, groundwater, and surface water – UAH 732 million and UAH 16 million.

Situation at enterprises

In 2024, Ukrainian industrial companies continued to implement large-scale environmental programs aimed at reducing their negative impact on the environment, improving energy efficiency, and decarbonizing production. The total environmental expenditure of the country’s largest steel enterprises amounted to billions of hryvnias and tens of millions of dollars.

Environmental protection and energy efficiency projects

In 2024, Metinvest Group allocated $170 million to environmental protection, which is 2% more than in the previous year. Of this amount, 77% was spent on operating expenses and 23% on capital investments. The company allocated $17 million separately for energy efficiency projects, which is more than 50% more than last year.

In 2024, Zaporizhstal Iron and Steel Works spent UAH 938 million on capacity maintenance. In particular, blast furnaces Nos. 2, 3, and 4 were repaired with a total investment of over UAH 230 million, and two sintering machines were overhauled, including an inspection of environmental protection equipment.

ArcelorMittal Kryvyi Rih spent UAH 2.3 billion on environmental protection measures. Among the largest projects are the construction of new tailings ponds: “The third map” (UAH 1.25 billion), “Central” (UAH 153.8 million), and the reconstruction of the “The fourth map” (UAH 12.2 million) and “Myroliubivka” (UAH 6.5 million) tailings ponds.

“Despite the difficult conditions caused by the introduction of martial law in Ukraine, PJSC “AMKR” continues to implement environmental protection measures. Every year, dust suppression measures are carried out, namely measures to reduce emissions during mass explosions, carding technology is implemented, dusty surfaces are fixed with binding agents at tailings ponds and dumps, quarries, and a set of measures is carried out to suppress dust on roads and and streets in the area of influence of its activities,» ArcelorMittal Kryvyi Rih told GMK Center in a comment.

According to the corporate report, Ferrexpo invested $24 million in a new press filtration complex last year, $18 million in enrichment plant and granulator projects as part of its production expansion program, and $1 million in a hydrolysis plant to test the use of hydrogen as fuel in the granulator.

Ferrexpo became the only Ukrainian company to be included in the Financial Times and Statista’s Europe’s Climate Leaders 2025 list. This is the third consecutive time the company has been recognized among the continent’s climate transformation leaders.

Priority — reducing the environmental impact

Increased production at enterprises led to an increase in environmental impact. At Ferrexpo, where pellet production rose by 58% to 6.1 million tons, dust emissions increased by 39%. At Metinvest’s enterprises, steel production increased by 5% and iron ore concentrate production by 42%, which led to a 5% increase in atmospheric emissions and a 6% increase in water consumption. Waste volumes also increased by 10% at Northern Mining.

Water management remains a priority: Metinvest recycles and reuses about 92% of water, while Ferrexpo recycles 98%. ArcelorMittal Kryvyi Rih conducts ongoing environmental monitoring, including monitoring of atmospheric air, water bodies, and soil.

Technical solutions to reduce environmental impact

The companies implement technical solutions to reduce their environmental impact. For example, Metinvest keeps dust and gas emissions below permissible levels through repair campaigns and process improvements. In 2024, sludge compaction projects were also implemented at the Northern Mining to reduce the load on tailings ponds.

ArcelorMittal Kryvyi Rih continues to implement dust suppression systems for mass explosions, dust fixation on dumps, quarries, and roads, as well as greening and landscaping of the company’s impact areas. One of the important projects is the modernization of automated air monitoring stations with the installation of dust meters for PM2.5 and PM10.

Reducing CO2 emissions and energy independence

Ferrexpo is actively implementing technologies to reduce CO2 emissions. The company has signed a memorandum with Salzgitter Flachstahl for the supply of direct reduced iron pellets, which reduce emissions by 37%. Biofuel is used – sunflower husks (20-25% of energy consumption), the purchase of electricity from renewable sources has been increased, and a 5 MW solar power plant is in operation. In addition, Ferrexpo is actively implementing a partial transition of dump trucks to mains power supply, as well as to battery-powered platforms and electric excavators.

Metinvest is also taking steps towards energy independence: Kametstal has launched the group’s first 10 MW gas piston power plant, with the company’s total demand at 150 MW.

Investments in improving the environment

In 2025, Metinvest has planned two major environmental investment projects. In particular, the combined mining and processing plant will invest UAH 5.7 billion in development and will also launch a large-scale waste thickening and enrichment project worth UAH 9 billion. In particular, this year saw the launch of a project to build a tailings pulp thickening plant at the Northern Mining and Processing Plant, which is a preparatory stage for the introduction of flotation technology. UAH 1.5 billion is planned to be spent on this.

In addition, in 2025, the company will invest more than UAH 2.5 billion in the modernization of Kametstal, with a third of these funds going toward the overhaul of blast furnace No. 9, which will bring the unit up to modern standards. The plans for the steelworks also include the start of construction of the first start-up complex of the new blast furnace gas collector and the modernization of the drive control system of continuous casting machine No. 1. In addition, Zaporizhstal has planned capital investments of UAH 1.1 billion in 2025. In particular, the plant will carry out major repairs of blast furnace No. 3, two sintering machines, etc.

This year, the company will also invest UAH 1.4 billion in gas and solar power plants. In general, Metinvest plans to launch gas piston stations at its mining and processing plants, and the next stage will be the construction of nearly 40 MW of solar power generation. By 2030, the company wants to meet up to half of its needs with its own generation.

The planned level of expenditure on environmental protection measures at ArcelorMittal Kryvyi Rih in 2025 is UAH 1.9 billion, including UAH 269.1 million for the implementation of measures under the City Program for Solving Environmental Problems in Kryvbas and Improving the Environment for 2016-2025.

Among the measures planned for the current year are the following:

construction and reconstruction of tailings ponds;

fixing dusty surfaces with binding agents;

dust suppression on highways and 28 city streets;

localization and elimination of quarantine plants, etc.

For its part, Ferrexpo plans to invest $3.3 billion to achieve zero CO2 emissions. Priority decarbonization measures include switching to biofuel for pelletizing, abandoning fossil fuels, and electrifying mining vehicles.

European climate benchmarks and support

In the process of European integration and implementation of the climate targets of the European Green Deal, the Ukrainian iron and steel complex faces serious challenges. To achieve a reduction in greenhouse gas emissions, the industry needs profound technological modernization. According to preliminary estimates, the implementation of already announced projects will require investments of approximately $11 billion.

However, in the context of war and limited access to Western capital, it is practically impossible to carry out such transformations solely with internal resources. A realistic scenario would involve giving Ukrainian steel companies access to European financial instruments aimed at supporting green transformations.

As Ukraine has EU candidate status, it should have equal rights with European companies to receive such support. This will not only allow the industry to recover after the war, but also effectively integrate modernized environmental capacities into the common European steel market, which is beneficial for both sides.