Ukraine plans to introduce a market-based emissions reduction system — Ministry of Economy

The Ministry of Economy of Ukraine has released a draft law on the creation of a national greenhouse gas emissions trading system for public comment.

The document defines the legal and organizational framework for the system’s operation and provides for the gradual alignment of Ukrainian climate legislation with European Union standards.

This was reported by the press service of the Ministry of Economy.

Benefits of implementing a national system 

The introduction of a market-based mechanism for reducing greenhouse gas emissions entails:

• fulfillment of European integration obligations under Cluster 4, Section 27 "Environment and Climate Change" and harmonization with EU law;
• the possibility of deferring the financial burden within the EU Emissions Trading System (EU ETS);
• protection of Ukrainian exporters from the impact of the EU CBAM mechanism by directing carbon adjustment payments toward decarbonization projects in Ukraine;
• the possibility of covering up to 90% of obligations for quota repayment;
• the creation of domestic funding sources for industrial modernization and support for nationally determined contribution (NDC) targets through the Ukraine Modernization Fund. 

Revenues from the system’s operation can be directed toward investments in decarbonization, improving energy efficiency, and introducing new technologies.

The Ministry of Economy noted that the draft law does not provide for a sharp increase in the burden on businesses—on the contrary, it provides for the phased implementation of the system over several stages. Operators of facilities within the NSTV will be exempt from double taxation.