With this monitoring, the DiXi Group think tank aims to record the main events and trends in three areas that are key to the decarbonization of Ukraine’s economy. The Decarbonization Monitoring analyzes the current state and effectiveness of measures regulating the use of renewable energy sources (RES) and energy efficiency, climate change mitigation and environmental improvement, and the rational use of natural resources. In addition, the document contains an analysis of the best international practices that may be relevant and applicable in Ukraine in the relevant areas to provide a basis for the development and improvement of national strategies and legislation in the field of energy policy, environmental protection and sustainable development of Ukraine.

RES AND ENERGY EFFICIENCY

Ukraine has stepped up efforts to develop the RES sector on a competitive basis and in line with national goals. The Parliament passed a law on stabilizing payments in the electricity market, in particular aimed at supporting RES producers. The draft Hydrogen Energy Development Strategy until 2050 was presented, a resolution on the introduction of guarantees for the origin of electricity from RES was approved, and the auction model of support was improved, simplifying conditions for investors in RES projects.

Over the past few months, the government and parliament have adopted a number of important legislative and regulatory initiatives on energy efficiency, including the Strategy for Thermal Modernization of Buildings until 2050, the Concept of the Program to Support Thermal Modernization of Buildings until 2030, and the corresponding action plan. Substantive work on the development of local energy plans (LEPs) has begun.

CLIMATE AND ENVIRONMENT

The development and improvement of the regulatory framework in the field of environmental protection concerned emissions monitoring, waste accounting, the activities of the State Environmental Inspectorate, etc. In particular, draft regulatory acts were developed that define: new standards for monitoring, quantification, and reporting of greenhouse gas emissions; requirements for labeling ozone-depleting substances and fluorinated greenhouse gases; the procedure for the functioning of the state environmental monitoring system and its subsystems; the procedure for developing waste management plans for enterprises, institutions, and organizations; identification and accounting of waste whose owner is not identified; the draft Strategy for Reforming the System of State Supervision (Control) in the Field of Environmental Protection.

Amendments to the Guidelines for Assessing Greenhouse Gas Emissions by Type of Facility, the Guidelines for Post-Project Monitoring, and the Guidelines for Developing Local Waste Management Plans were also approved. There were also new legislative initiatives: on the environmental tax for waste disposal and mining waste disposal, and on liability for non-compliance with the requirements of the Law on Strategic Environmental Assessment.

Significant progress has been made in the development of state climate policy, which has so far been fragmented and often seen as a component of environmental policy alone. The absence of a systematic approach to building a climate governance architecture complicates management decision-making to ensure climate change mitigation and adaptation across the economy.

In early 2024, the Ministry of Environmental Protection and Natural Resources and the Ministry of Economy finalized and published the draft law «On the Basic Principles of State Climate Policy» (climate framework law), the draft National Energy and Climate Plan (NECP), and the draft Strategy for the Formation and Implementation of State Policy in the Field of Climate Change for the Period up to 2035, which should form the basis for a systematic approach to the implementation of state climate policy.

The Government of Ukraine has also approved two strategic planning documents that include, among other things, climate reforms: an action plan to implement the recommendations of the European Commission presented in the report on Ukraine’s progress under the 2023 Enlargement Package and the Ukraine Facility Plan.

SUBSOIL USE

In the reporting period, a number of regulations were adopted and published for discussion, including those aimed at reducing and preventing the environmental impact of the extractive industry. In particular, the government amended the Regulation on the Procedure for Granting Mining Allotments, the Ministry of Environmental Protection and Natural Resources of Ukraine approved the procedure and terms of risk insurance for commercial development of oil and gas fields, and approved a number of model agreements on subsoil use.

The document was prepared with the support of the International Renaissance Foundation within the framework of the project «Supporting the Decarbonization of Ukraine’s Economy through the Development of New Debt Financing Models. Stage 4».

The contents of this document are the sole responsibility of DIXI GROUP and can under no circumstances be taken to reflect the views of the International Renaissance Foundation.