Climate change, deterioration of ecology and depletion of reserves of non-renewable natural resources pose a threat to the world economy, human health and life, and natural ecosystems. The transition to a carbon-neutral economy is primarily aimed at protecting human and animal life by reducing polluting emissions. The road map of the European Green Course contains a set of measures to increase the efficiency of the use of energy resources and reduce emissions. In particular, it is envisaged to introduce restrictions on carbon-intensive products imported to EU countries through the application of the Carbon Border Tax.
There are risks of such a carbon adjustment for Ukrainian exports to the EU in general and the energy industry in particular. In order to assess risks and determine ways to minimise the negative impact on energy in Ukraine, BRDO analysts developed the Green paper “Analysis of the necessary changes in the regulatory field in the electricity industry of Ukraine to meet the goals of the European Green Course“.
The introduction of the European Green Deal is a global process that will have a serious impact on world trade and the provision of international supply chains of goods. Therefore, EU state institutions are in the process of developing, discussing and approving strategic documents, on the basis of which changes will be made to the current Directives and, if necessary, new ones will be adopted. In order to join the EWC and achieve climate neutrality, Ukraine should also work in this direction and develop strategic documents that would define specific goals and ways to achieve them within a certain period.
The accession of Ukraine to the EWC implies new obligations of Ukraine in the transition to a carbon-neutral economy, the implementation of which will lead to the emergence of a number of problems in the energy industry. The reduction of greenhouse gas emissions involves the cessation of coal mining, as well as large-scale changes in the structure of energy-generating capacities and electrical network facilities, which is quite problematic in the conditions of the current economic state of Ukraine. In addition, the oil and gas sector will suffer due to a significant decrease in demand for petroleum products and natural gas as a resource for energy production.
“One of the main tasks of the Government of Ukraine is to transfer the economy to the rails of low-carbon development. To achieve the specified goal, it is necessary to form and ensure the implementation of a new state policy in this area. First of all, develop the Concept of decarbonization of the economy of Ukraine. In addition, it is necessary to take measures to ensure Ukraine’s energy security, in particular, the reliable and continuous operation of the energy system and the possibility of integrating new RES capacities, as well as the modernization of heat and electricity networks to reduce energy losses. In our Green Book, we have developed a roadmap for the actions of the authorities of Ukraine to minimize the negative consequences of the implementation of policies in Ukraine that correspond to the general trends of the European Green Agreement,” said Oleksiy Dorohan, executive director of BRDO.
The Green Book, developed by BRDO, contains an analysis of the EU Legislation on the policy of implementing the European Green Course, a description of the risks of implementing the principles of EPC in the energy industry of Ukraine, as well as determining the actions of the Ukrainian government to achieve the goals of EPC in Ukrainian realities.
The Green paper is available at regulation.gov.ua (in Ukrainian).