Key Documents & Presentations
|Ukraine: PMR Project Implementation Status Report 2017||English||October 2017|
|Ukraine: PMR Project Implementation Status Report||English||October 2016|
|Ukraine: Final MRP||English||August 2014|
|Ukraine: Final MRP Presentation||English||August 2014|
Ukraine plans an MRV system with focus on electricity and industry because they:
- have easily identifiable, large point sources which make up most of the emissions in the sector;
- release a significant portion of GHG emissions (17%, 25% respectively);
- provide a numerous reduction opportunities which are largely profitable;
- have ambitious targets for decreasing dependency to exported fuels and increasing competitiveness, respectively; and
- are subject to many regulations and reporting requirements, so this will not create significant incremental burden.
Draft MRV Law provides authority to mandate MRV for GHG emissions. While this law is under review and the consultation process on this law is starting, secondary and complementary legislation is necessary with regard to:
- Procedure for realization of MRV of GHG emissions (monitoring, reporting, verification);
- Procedure for accreditation of independent expert organizations that carry out verification of GHG emission monitoring reports;
- Procedure for state registration of installations carrying out GHG emissions; and
- Procedure for state control over MRV of GHG emissions.
Ukraine’s activities with the PMR will be focused on the two areas in support of the Ukraine’s Energy and Low Carbon Policies:
- Development of a GHG emissions monitoring, reporting, and verification system in Ukraine as a first step towards the ETS; and
- Development of assessments to support an informed decision making process on the use of market based instruments for Ukraine.
The PMR will support Ukraine to:
- Design an installation-level energy sector MRV; and
- Lay out a road map toward implementation of an ETS.
In November 2010, a draft of the Ukrainian Law “On the energy efficiency regulation” passed the first reading in Verkhovna Rada (Ukrainian Parliament), which included the proposal for a cap-and-trade system. The three fundamental building blocks to be defined for UkrETS are
- Definition of basic policy decisions;
- Infrastructure; and
- Governance & Regulation.
Scope and Coverage
- Imposing restrictions on CO2 emissions for entities of the power industry and metallurgy. Further the number of participants will gradually expand (chemical industry, cement industry, pulp and paper industry etc.);
- An individual installation will be a subject to regulation. The enterprise may consolidate its several installations for allocation of carbon units and monitoring of emissions;
- Within the PMR project it is necessary:
- to determine the capacity and value (plus costs) of emission reductions;
- to explore the readiness of the sectors to participate in the carbon market;
- to assess the possible consequences (economic, environmental, social) from participation of these sectors in emission trading; and
- to determine main barriers in the way of implementing these initiatives.
Setting a Cap
- Absolute cap on the quantity of emissions in sectors;
- Historical emissions in a certain base period to be used as basis for determining total cap
- Approach of cap determining – bottom-up;
- Sectoral cap adjustment taking into account sector specifics and national plans for improving energy efficiency.
- Within the PMR project it is necessary:
- to evaluate various approaches/principles/methods to set limits for target industry sectors; and
- to analyze correlation between ‘rigidity’ of the cap and economic consequences for sectors.
Allocation of Allowances
- Free allocation on the ground of historical emissions in the base period (grandfathering);
- gradual transition to auctions and allocation based on specific industry factors (benchmarks) are foreseen in the future;
- establishment of the database of the best available technologies for a gradual transition to the auctions and benchmarking;
- Within the preparatory stage of the PMR project it is necessary:
- to analyze alternative approaches and methods of allowance allocation, as well as possibilities, feasibility and timing of transition to the auctions and benchmarking; and
- to determine optimal mechanisms of allowances allocation among the new participants, take into account early activity and avoid double counting.
Other Activities to Support the Development of Market-based Mechanisms
Ukraine will conduct analysis to support development of carbon pricing instruments will be focused on:
- The cap and trade options, and other existing direct carbon pricing mechanisms;
- ETS vs. Carbon tax;
- The transition from one instrument to another; and
- The key challenges of introducing ETS as opposed to other policy instruments
Ukraine ratified the UNFCCC and the Kyoto Protocol in 1997 and 2004 respectively and the country’s commitments under the Kyoto Protocol are not to exceed the emission level of 1990. By 2020, it aims to reduce GHG emissions by 20% than the base year, and by 50% by 2050.
Energy sector remains the main source of GHG emissions – it accounts for 70% of emissions, but its share in the aggregated emission structure is gradually decreasing: In 1990, the energy sector accounted for almost 74% of total emissions but in 2009 decreased to 69.7%. The share of agricultural sector decreased from 11.3% in 1990 to 9.3 % in 2009. On the contrary, the share of industry has grown from 13.9% in 1990 to 18.5% in 2009. The share of the waste sector also increased by almost 3 times during this period but still remains low (2.6% in 2009).
Restructuring the economy under the low carbon growth scenario is one of Ukraine’s top priorities as energy efficiency in Ukraine is 2.1 times lower than in the world’s average and 4 times lower compared to developed countries. Ukraine is also one of the leaders in terms of the amount of investments under the flexible mechanisms of joint implementation and emissions trading.
In collaboration with the PMR, Ukraine plans to focus on two target sectors: electric power and metallurgy having the highest economic, technological and institutional capacity of emission reduction. These two sectors were chosen based on three criteria: sector share in the total GHG emissions, size of the sector companies and potential emission reduction.
The State Environmental Investment Agency (SEIA), formerly National Environmental Investment Agency of Ukraine (NEIA), was established by the regulation #977 of June 30, 2007 as the central executive body guided and coordinated by the Minister of Environmental Protection of Ukraine.
Flagship climate change legislation is National Action Plan on Implementation of the Kyoto Protocol that was enacted in 2005. The main tasks under this plan are to:
- Improve the national GHG emission and absorption inventory system;
- Create favourable conditions to implement the "flexible mechanisms" of the Kyoto Protocol in Ukraine;
- Prepare and publish national reports on climate change issues;
- Develop National plans on adaptation and climate change impact mitigation;
- Evaluate GHG emission reduction potential to 2020, strategic forecast and the assessment of climate change impact on various economy sectors, on the population and ecosystems;
- Create a data bank on ecologically safe technologies that allow reducing emission volumes and increasing GHG absorption volumes; and
- Implement measures on training and qualification improvement within the scope of UNFCCC and its Kyoto Protocol, for State employees, preparing personnel, and informing the public on climate change issues.
Flagship energy legislation is Ukraine’s Energy Strategy to 2030 targeting:
- Reducing energy intensity of GDP by 50%;
- Increasing the share of renewable energy from 3% to 19%;
- Reducing electricity consumption in transportation through power grids from 14.7% in 2005 to 8.2% in 2030; and
- Reducing energy intensity of steel industry by 30% in 2017 compared to 2007.
Besides, in the November 2010 draft of the Ukrainian Law “On the energy efficiency regulation" passed the first reading in Verkhovna Rada (Ukrainian Parliament), which included the proposal for a cap-and-trade system.
Currently, the legislative process initiated by the SEIA with draft MRV law which was submitted to the Ministry of Environment and Natural Resources is still under review and the consultation process on this law is starting. This law was planned to be reviewed and submitted to other governmental bodies for review and submission to the Parliament later this autumn.
The State Environmental Investment Agency (SEIA), as the central executive body, has the following main responsibilities:
- to participate in establishing and providing for the execution of the state national investment policy in the environmental protection sector area as well as and the state policy in the field of regulation of anthropogenic adverse negative impact on climate change;
- to execute the provisions set in the United Nations Framework Convention on Climate Change and implement the mechanisms of the Kyoto Protocol including implementation of greenhouse gases (GHG) mitigation projects, attracting investments to environmental protection; and
- to establish and ensure the operation of the national system for the assessment of the GHG emissions and absorption.
Other relevant government bodies are Cabinet of Ministers of Ukraine, Ministry of ecology and natural resources, Ministry of fuel and coal, Ministry of economy, Ministry of industrial policy, and NAER.
- A high-level Ukraine-EU dialogue on the issues of Ecology and Climate Change was launched during the working visit of Mr. Eduard Stavytskyi, Minister of Ecology and Natural Resources of Ukraine, to Brussels. (July 20, 2012)
More news from the State Environmental Investment Agency of Ukraine is available here.
All Documents & Presentations
|Ukraine: Status of MRP||English||October 2013|
|Ukraine: Update on MRP Progress||English||October 2012|
|Ukraine: Organizing Framework||English||October 2011|
|Ukraine: Country Update (May 2011)||English||May 2011|
|Ukraine: Expression of Interest Letter||English||February 2011|
|Ukraine: Expression of Interest (EoI)||English||February 2011|
|Ukraine: Status and Challenges to Monitoring National GHG Emissions||English||September 2014|
|Resolution PA/IP/2014-2 Allocation of Implementation Phase Funding to Ukraine||English||September 2014|
|Resolution ORG-3: Implementing Country Participants' Participation||English||April 2011|
|Ukraine: Country Program Updates||English||November 2018|
|Ukraine: PMR Project Implementation Status Report 2018||English||October 2018|
- Ukraine is engaged in the following initiatives:
- UNDP, Germany and Eastern European Partnership: low carbon strategies
- UNDP: “Capacity Building for Low Carbon Growth in Ukraine”
- EU: legislative system adaptation
- EBRD: “Preparedness for Emissions Trading in the EBRD Region (PETER)”
- USAID: “MRV for Enterprise-Level GHG Emissions in energy sector in Ukraine”
Source: Status of MRP (October 2013)