Techno-economic optimisation of steel supply chains in the clean energy transition: A case study of post-war Ukraine

Abstract

The steel industry's clean energy transition can enable new market creation and economic growth stimulation. Yet, the most efficient and feasible pathway to decouple the sector from fossil fuels remains unclear, particularly within developing nations and unstable socio-political contexts. Here, a blueprint for reconfiguring plant locations and reallocating resources is developed through a Ukrainian case study under two scenarios, which capture potential post-war conditions. Framed by regrowth of Ukraine's export-oriented steel industry and prospective European Union accession, green iron and steel trade strategies are devised. A steel supply chain optimisation model underpins the techno-economic, spatially granular analysis of energy and material flows, which utilises the inputs from a separate cost-minimised renewable energy, green hydrogen, and green ammonia production model. Results show that optimal supply chain configurations rely on mixed emissions-free energy profiles, the emergence of new steelmaking sites nearby high-quality renewables, regional alliances for green iron and steel market creation, and multi-billion-dollar investment. Mature nuclear and hydro power critically reduce costs in the near-term, whilst the rapid expansion of solar and wind energy infrastructure underpins production system scale-up. To simultaneously rebuild the 22 million-tonnes-a-year Ukrainian steel industry and transition to near-zero emissions by 2050, infrastructure investment surmounts to $62 billion, given full liberation of Ukrainian territory. Near-term investment is necessary to ease the pace of change, and although mobilising capital of this magnitude will be challenging, convincing carbon prices favour decarbonisation efforts.