The metallurgical industry will play a key role in achieving Ukraine’s carbon neutrality, according to representatives of the largest Ukrainian metallurgical companies speaking during the international forum “Decarbonization of the Steel Industry: a Challenge for Ukraine” taking place in Kyiv.
According to a press release from GMK Center, the ambitious plans of the EU and the United States to achieve carbon neutrality by 2050 are putting pressure on Ukrainian metallurgical companies. To compete successfully on foreign markets, Ukrainian producers also need to have CO2 reduction targets and decarbonization strategies.
“Now Metinvest is developing a detailed roadmap to reduce CO2 emissions. We are very careful in working out each step that will eventually lead our production to carbon neutrality, because such a large-scale transformation should not harm the sustainability of our business. We hope to conclude partnerships today, which will allow us to follow the path of decarbonization,” CEO of Metinvest Group Yuriy Ryzhenkov said during the event.
During the forum, Metinvest signed two memorandums of cooperation for the implementation of joint projects to reduce greenhouse gas emissions. One of them was signed with Primetals Technologies – an international company providing a full range of technologies, products and services for the metallurgical industry, the other – with K1-MET – a leading Austrian research center in metallurgy.
The press release notes that Ukraine actively declares its intention to follow the direction of decarbonization. In January 2020, the country presented the Green Energy Transition Concept, which sets a goal to achieve a carbon neutral economy by 2070.
In April 2021, the government presented the draft of the second Nationally Determined Contribution to the Paris agreement. It assumes that Ukraine by 2030 will reduce CO2 emissions by 65% compared to 1990, in particular industrial enterprises – by 61%.
For its development, the Mining and Metallurgical Complex (MMC) of Ukraine requires an increase in annual investments to $2.3-2.4 billion by 2030 from $1.8 billion in 2019, CEO of GMK Center Stanislav Zinchenko said, presenting the study entitled “Metallurgy of Ukraine: Vision 2030” in Kyiv on Friday.
According to him, the country’s mining and metallurgical complex is currently a low-cost exporter of raw materials and semi-finished products, and by 2030 it should become a stable supplier of quality products, maintaining the position of the basic industry in the “new” economy.
He said that among the global trends is weak demand for steel in the coming decades – growth of less than 1% per year; excess steelmaking capacity and the development of protectionism, which leads to high competition in the markets; volatility in steel prices, it is also decarbonization, digitalization, possible changes in supply chains, an increase in the need for capital investments. In general, the situation is characterized by weak market conditions and low financial performance.
In the domestic mining and metallurgical complex, the strong side is vertical integration, the weak side is underinvestment, a high need for investments, large emissions of harmful substances into the environment, insufficient quality of finished products, dependence on exports, low consumption in the domestic market.
In turn, Chief Analyst at GMK Center Andriy Tarasenko identified five strategic areas for the mining and metallurgical complex: cost leadership, increased unit efficiency, environmental friendliness, strengthening the benefits of vertical integration, and diversification by product and market.
To implement these areas, it is necessary to reduce the cost of steel production, increase the share of output with high added value, boost steel consumption from 108 kg per person to 160 kg per person, which will ensure the growth of products with high added value by 38%. It is also required to improve environmental friendliness, reducing CO2 emissions by 20%, dust – by 50%. To increase the production of premium pellets with a high iron content and direct-reduced grade (DR) pellets by 10 million tonnes.
As part of the diversification of product markets it is necessary to expand the geography of sales and reduce dependence on countries with a high level of risk (trade, environmental, military).
Ukraine should pursue a policy of stimulating investment, developing the internal market, countering protectionism and implementing environmental programs, including by joining the European Green Deal.
According to the experts, in the case of such activities, the MMC of Ukraine by 2030 will increase steel production by 14.4% compared with 2019, to 23.8 million tonnes, and will increase foreign exchange earnings from exports by $600 million per year. At the same time, GDP will be additionally generated in the amount of $1.75 billion, tax revenues to the budget will increase by $400 million annually, and capital investments will increase by $1.3 billion.
Metinvest B.V. (the Netherlands), the parent company of the international vertically integrated mining and metallurgical group Metinvest, has become a member of the Dutch Association of Metallurgical Industry (VNMI). According to a press release from the company, the trade association of Dutch producers of raw materials, semi-finished goods and finished steel products VNMI was established in 2000, uniting more than 80% of the players in the steel industry in the Netherlands.
The association represents Dutch steelworkers in European business associations in The Hague and Brussels. VNMI focuses on four areas: health and safety, energy and climate, sustainability and corporate social responsibility, trade and innovation.
It is noted that Metinvest Group has been developing these areas since its creation. The company supports global initiatives and participates in international environmental projects. In 2010, Metinvest joined the UN Global Compact.
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