Ukraine’s law on industrial pollution puts additional pressure on enterprises during the war – Fastmarkets

The new law “On Integrated Prevention and Control of Industrial Pollution”, signed by the President of Ukraine in August, puts additional pressure on Ukrainian enterprises, as it provides for a very short period of time to switch to the new requirements.

This is stated in an article by Fastmarkets. The publication notes that the law may help attract foreign investment in the restoration of iron and steel companies, but it has now become another test along with a number of other wartime challenges.

According to the law, within four years of the law’s entry into force, companies must obtain a comprehensive environmental permit that will set specific emission and waste standards for enterprises.

ArcelorMittal Kryvyi Rih noted that by October 2028, the company is required to take many preparatory measures and have an investment plan, as well as potential sources of funding to be used to modernize equipment in accordance with BAT. However, in the context of martial law and economic instability, meeting the requirements of the new law will be extremely difficult.

According to a Metinvest Group spokesperson, Ukraine is seeking to simplify its accession to the EU, so the company will need to switch to the new standards faster than expected. He noted that the new law raises concerns about the time allotted for modernization and the economic pressure it will put on the group.

«The conditions under which best available technology (BAT) must be implemented and obsolete equipment must be decommissioned can be a problem in wartime,» the group’s representative noted.

Metinvest notes that the law can help find financing for the company’s environmental initiatives, but it is extremely difficult to attract foreign funds for enterprises that are subject to rockets flying over them every day.

The EU remains a key market for the industry even after August 2023, when the Ukrainian «sea corridor» became operational, so it is also extremely important for the country to align its decarbonization policy with the bloc. According to market sources, more than 80% of finished metal products and 50% of iron ore are exported to the European Union from Ukraine.

Key players in the Ukrainian steel industry, Metinvest and ArcelorMittal Kryvyi Rih, are considering the possibility of switching to steel production using electric arc furnaces or other technologies that will help reduce emissions. But this will probably become possible only after the end of hostilities.

Metinvest explains that improving the quality of iron ore by direct iron reduction technology is important for the production of low-carbon steel. For example, Central Mining can already produce 2.3 million tons of high-quality pellets per year. The company plans to design facilities for the production of direct reduction iron and hot briquetted iron in Kryvyi Rih.

In 2022, the company’s carbon emissions amounted to 2.45 t per ton of steel, in 2021 these indicators were lower – 2.17 t. The results before the full-scale invasion included the Mariupol Ilyich Iron and Steel Works and Azovstal, now destroyed by the war. Before the Great War, Metinvest focused its environmental initiatives on these assets.

At the same time, ArcelorMittal Kryvyi Rih is currently implementing legislation on monitoring greenhouse gas emissions for large industrial equipment and is undergoing verification of the monitoring report by an independent accredited organization. For the post-war period, all technologically possible options for reducing CO2 emissions are considered here, in particular, the construction of an electric arc furnace, the installation of solar power plants, etc.

As GMK Center reported earlier, Metinvest strives to provide Europe with green iron ore raw materials. The company has all the prerequisites for investments in capacity and is already implementing a number of modernization projects