FEU put forward proposals for effective implementation of the ETS in Ukraine

The Federation of Employers of Ukraine (FEU), together with representatives of the government and business, discussed the Strategy for the Implementation of the Greenhouse Gas Emissions Trading System in Ukraine until 2033 (ETS) and put forward proposals for its effective functioning. This is stated in the FEU press release.

For the favorable work of Ukrainian business, it is necessary, in particular, to accelerate the creation of an information base in Ukraine with indicators (coefficients) of CO2 emissions per 1 kW of consumed power, and to develop a concept for creating an ETS for imports of goods to Ukraine by 2025.

The second step is to extend the timeframe for the implementation of the ETS in Ukraine, and thus the Strategy, namely: the preparatory phase in 2024-2025, pilot implementation of the ETS in 2026-2031, start the full functioning of the ETS in Ukraine in 2032-2038, while adapting greenhouse gas emission prices in Ukraine to the level similar to the EU, and complete the integration of Ukraine’s ETS into the EU ETS in 2038.

Third. The strategy provides for education and training on the functioning of the ETS for representatives of the authorities, supervisors or plant operators. According to preliminary estimates by the FEU, only 6 sectors subject to the ETS are represented by more than 2700 companies in Ukraine, and the ETS will cover a larger number of Ukrainian companies. This will actually lead to the emergence of a new market, so it is proposed to supplement the operational plan with the item «Creating conditions for increasing the number of verification bodies in Ukraine».

Fourth. It is worth paying attention to the existing legal framework to prevent double payment for CO2 emissions. In addition, it is necessary to create fair conditions for domestic producers who export their products to countries with lower CO2 taxes. One of the mechanisms is to reimburse the cost of greenhouse gas emissions for the corresponding exports.

Fifth. Determine an approach to the temporary free allocation of quotas for electricity generating facilities in order to modernize, diversify and sustainably transform the energy sector.

Sixth. During 2024-2026, to introduce reliable tools for monitoring, reporting and verification of greenhouse gases, including training and the search for financial instruments (attracting donors, grants, etc.).

The discussion also drew attention to the fact that in the European Union, nuclear power and partially gas-fired power generation have received a green label. If the same generation in Ukraine does not yet have a similar status, it is proposed to include this issue in the negotiations on Ukraine’s membership in the EU.

The Federation prepared and sent a letter of appeal to the Ministry of Environmental Protection and Natural Resources of Ukraine.

Earlier, during the discussion of the draft Strategy for the Implementation of the Greenhouse Gas Emissions Trading System in Ukraine until 2033 and its Operational Plan, Ukrainian business identified 4 key conditions for effective climate policy.