State Aid for the Development of Green Metallurgy: EU Principles and Experience for Ukraine
Shlykova V. O., Poliakova O. Y., Kotliarov Y. I.

Shlykova, Viktoriia O., Poliakova, Olha Yu., and Kotliarov, Yevhen I. (2026) “State Aid for the Development of Green Metallurgy: EU Principles and Experience for Ukraine.” The Problems of Economy 1:122–131.
https://doi.org/10.32983/2222-0712-2026-1-122-131

Section: Economics and national economy management

UDC 338.242.4:669.013:502.131.1

Abstract:
The aim of the article is to analyze European practices for promoting the development of technologies related to green metallurgy, in a broad sense, and to identify opportunities for application in Ukraine. The necessity of restoring and modernizing the metallurgical industry based on modern decarbonization technologies is substantiated. The challenges of implementing the Carbon Border Adjustment Mechanism (CBAM) for the Ukrainian economy are considered. Based on existing scientific publications, approaches to defining the concept of «green metallurgy» are examined, and the absence of a single universal interpretation is identified. Analysis of abstracts and open-access texts using the VOSviewer tool allowed the construction of a concept network related to the development of green metallurgy and led to the conclusion that green metallurgy is a green technology in terms of sustainable development, and direct iron reduction technologies, including the use of hydrogen as a reducer, are widespread worldwide. At the same time, Ukrainian legislation uses a narrow concept of green metallurgy, which does not correspond to global trends in scientific and technological development and limits the potential for industry modernization, and therefore requires clarification and expansion. Considering the need for substantial investments to expand green metallurgy in Ukraine, which require State support, the existing experience of the EU in this area was examined. In particular, an analysis of trends in State support during the period 2014–2024 was conducted, namely the dynamics of its total volumes, its share of GDP, priority areas in which it was provided, and the instruments for its implementation. Thus, the main priority of EU State aid policy is the protection of the environment, including energy conservation. Throughout the period 2014–2024, the most common aid instruments were direct grants, direct grants / interest rate subsidies, and tax incentives. One of the results of the study is the systematization of technologies that can be used in green metallurgy in Ukraine and are supported in the EU Member States, carried out based on the analysis of the State Aid Framework accompanying the Clean Industry Agreement. The list of main, supplementary technologies and final products eligible for State aid and defined as those that can be used in green metallurgy can serve as a basis and reference for developing support instruments for the industry in Ukraine. Several specific examples of approved State aid schemes in the EU Member States, which demonstrate active use of support for green metallurgy, have been considered. It has been defined that to accelerate the recovery of metallurgy on new technological principles and its development, it is necessary to harmonize domestic legislation with European legislation without losing the main focus on reducing environmental impact, while ensuring prospects for industry growth.

Keywords: decarbonization, low-carbon iron metallurgy, green technologies, State aid.

Fig.: 5. Tabl.: 1. Bibl.: 20.

Shlykova Viktoriia O. – Candidate of Sciences (Economics), Senior Research Fellow, Senior Research Fellow, Sector of Macroeconomic Analysis and Forecasting of the Department of Macroeconomic Policy and Regional Development, Research Centre for Industrial Problems of Development of NAS of Ukraine (2 floor 1-a Inzhenernyi Ln., Kharkіv, 61166, Ukraine)
Email: v.shlykova@ukr.net
Poliakova Olha Yu. – Candidate of Sciences (Economics), Associate Professor, Head of, Department of Macroeconomic Policy and Regional Development, Research Centre for Industrial Problems of Development of NAS of Ukraine (2 floor 1-a Inzhenernyi Ln., Kharkіv, 61166, Ukraine)
Email: polya_o@ukr.net
Kotliarov Yevhen I. – Candidate of Sciences (Economics), Associate Professor, Head of, Sector of Energy Security and Energy Saving of the Department of Industrial Policy and Energy Security, Research Centre for Industrial Problems of Development of NAS of Ukraine (2 floor 1-a Inzhenernyi Ln., Kharkіv, 61166, Ukraine)
Email: ekotlarov@i.ua

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