(c) David Mark from Pixabay
At the round table on the prospects of the “green” post-war reconstruction of Ukraine organized by the German consultancy Berlin Economics, the issue was discussed in-depth, starting with “green” technology costs, energy costs, Ukraine’s prospects of joining the EU etc. My task was to explain the current state of Ukrainian industry, and the real steps that will be needed to modernize it according to “green” goals.
The war resulted in several important consequences for Ukraine’s industrial sector:
Ukraine has lost up to 50% of the economy, and will recover only in 5 years at the pre-war level. We actually lost the decade. Moreover, we cannot talk anymore in Ukraine about climate goals for 2030. Plans to reduce emissions failed, if we talk about carbon intensity. We need a revision of NDC-2 (Nationally Determined Contribution under the Paris Agreement) targets.
We also expect a support from our partners, primarily the EU, for industrial recovery programs financing after the war, access to green transition financing funds for Ukrainian companies, since the local economy suffered immensely from the war.
The support of the global community in the implementation of recovery programs will allow the best practices to be applied to reduce emissions in industry, including some crucial technologies:
Technologies haven`t changed fundamentally. However, the environment inside Ukraine has changed; the possibilities of using these technologies have changed. Now, without large-scale external financing programs, Ukraine will definitely not be able to cope with the challenges of the green transition.
The problems are the same, and got even worse. The price of a mistake in the implementation of an incorrect policy has increased even more.
Internal capacities to stimulate green transition in Ukraine has declined. Since the economy has fallen, budgetary priorities have changed. These are, first of all, defense programs, social programs, housing and urban infrastructure reconstruction. Earlier we talked about programs to encourage employees to stay in Ukraine. That is enough directions where to spend money. Therefore, I do not believe in the possibility of internal Ukrainian green funds and instruments.
Ukraine needs access to European financing instruments. We take a pragmatic view of the prospects for Ukraine’s European integration. This is not a question of the next 10 years, but we must have a clear plan and clear deadlines. We must have access to green tools today or tomorrow. Our diplomacy should work out what these mechanisms might be.
At the same time, a special approach is needed for Ukraine to meet the requirements for reducing emissions. That is, the climate policy of Ukraine should be as soft and stimulating as possible.
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