The government agreed to the proposal of the Ministry of Environment and the Ministry of Digital Transformation regarding the experimental project of issuing a special permit for the use of forest resources (logging ticket) and a certificate of origin of timber and lumber made from it. The project will be implemented for 2 years, starting from June 1, 2023.
BRDO experts worked on the digitisation of these services together with the Ministry of Environment and the State Forestry Agency within the framework of the USAID/UKaid project “Transparency and Accountability in Public Administration and Services/TAPAS”.
Why is this important?
From now on, it is possible to submit an application and obtain the relevant permit documents online on the Ecosystem platform.
The introduction of such services in electronic format will allow to:
What were the previous stages of the forest industry reform?
This innovation is another step in the framework of the comprehensive reform of the forest sector of Ukraine. The goal of the reform is to introduce transparent and effective management mechanisms in this area.
To remind, BRDO has been working on this reform since 2016. In 2017, the Agriculture sector team published a green paper on Timber Market Regulation, which highlighted the key issues facing the industry and how to address them.
Implementation of the proposals outlined in the BRDO Green paper began in 2019. The government introduced electronic logging of timber, which was the first step in preventing illegal logging and illegal timber traffic.
Next, the state introduced the sale of raw wood at electronic auctions, which created a transparent, convenient and affordable mechanism for the circulation of wood on the market.
Digitisation of the issuance of permit documents is the next step in the comprehensive reform of the forest industry, but it is far from the last.
What awaits the forest industry in Ukraine in the future?
The reform in the forest industry continues. The next stage should be the demarcation of management, licensing and economic functions, by carrying out corporate reform and ensuring transparent conditions for the economic activity of SE “Forests of Ukraine”.
BRDO continues joint work on the reform with relevant ministries. We are convinced that the implementation of modern and transparent mechanisms and the use of the best practices of the countries of the European Union in this area will contribute to the future prosperity of forest entrepreneurship.
By 2050, the EU must reduce greenhouse gas emissions to zero. To achieve this indicator, the European Commission adopted the European Green Deal – a comprehensive strategy designed to transform the economy of the European Union into a resource-efficient one, create sustainable industry and transport, and cut pollution.
One of the ways to reduce greenhouse gas emissions is the transition to less harmful fuels in the transport sector, as well as the development of renewable energy. In recent years, the production and sale of electric cars have been growing, and the transition to renewable energy sources requires an increase in the production of energy storage devices – batteries.
Batteries are a strategic part of Europe’s green transition and a key technology for the competitiveness of the automotive and energy sectors. Batteries contribute to the decarbonisation of the transport and energy sectors through electrification and ensure energy conservation, in particular for renewable energy facilities.
Lithium is critical for battery production. This element is included in the EU’s list of critical raw materials. In addition, it also belongs to the list of strategic raw materials, which is critical for ensuring the green and digital transition of the EU.
According to the US Geological Survey, the explored world lithium reserves are estimated at 22 million tons, and the resources are about 89 million tons. Bolivia (21 million tons), Argentina (19 million tons), Chile (9.8 million tons), Australia (7.3 million tons), and China (5.1 million tons) are the leaders in estimated lithium deposits in the world.
The largest lithium production in 2022 is recorded in Australia (about 61 thousand tons), Chile (about 39 thousand tons), and China (about 19 thousand tons). At the same time, production in Portugal, the only country in the EU where this resource is produced, is only 600 tons.
There are several deposits of this most important metal for battery production in Ukraine. In terms of prospective and forecast lithium resources, Ukraine is one of the richest countries in Europe and can not only fully satisfy the needs of domestic production, but also the demand of the European raw materials market.
Lithium reserves in Ukrainian deposits lie at a depth of more than 300 m, therefore ore extraction will be carried out by the mine method. Due to this, the economic indicators of Ukrainian lithium deposits are inferior to those of South America, where mining is conducted in an open-pit way. Still, from an environmental point of view, mining is safer.
Experts of the EU Project “New Code of Ukraine on the Subsoil” are preparing an analytical review of advanced battery technologies in Ukraine, which will also explore the connections and potential value chains between the needs of battery manufacturers in the EU and the corresponding raw materials in Ukraine. To ensure you don’t miss a research publication, follow the information resources of the BRDO or subscribe to the monthly digest.
In addition, next week, on May 15-17, the Raw Materials Summit, Europe’s leading raw materials conference, will take place in Brussels. The annual event attracts more than 80 speakers and hundreds of attendees from the raw materials sector and beyond, plus for the first time, an Innovation Village showcasing 20 booths featuring breakthrough technology and big thinking from the most exciting entrepreneurs and start-ups. One of the discussions will focus on the European supply chains of lithium – and how exactly this critical material can be used in innovation. Learn more: https://www.eitrmsummit.com/copy-of-main-stage
The project is financed by the European Union and implemented by the Consortium consisting of experts from Projekt-Consult (Germany), MinPol (Austria) and the Better Regulation Delivery Office (Ukraine). This publication reflects the position of the Project and does not necessarily coincide with the position of the European Commission.
Ministry for Communities, Territories and Infrastructure Development of Ukraine (Ministry for Restoration), together with the RISE Ukraine Coalition, presented the communication platform of the unified electronic restoration management ecosystem DREAM (Digital Restoration Ecosystem for Accountable Management).
The communication platform is available via the link https://dream.gov.ua/ and contains information about the tasks, structure, and principles of the DREAM ecosystem, as well as a step-by-step plan for its implementation in 2023.
What is DREAM?
DREAM is a state digital ecosystem that will provide a single digital route for all reconstruction projects. It will collect all project data online, display it in the form of convenient tables, graphs, and charts, and ensure open data publication by the global Open Contracting Data Standard.
The ecosystem will allow monitoring of every stage of the project’s life cycle — from the registration of damage and destruction to financing, conducting procurement, and construction work, and putting the facilities into operation.
The public part of DREAM — with data on the first projects submitted by communities, regions, spheres — will be presented during the URC, which will take place on June 21-22 in London. It is planned that international financial organisations will be able to participate in the financing of these projects, and their implementation will start already this year. In addition, the Sectoral Project Management System is already operational, in which communities and the State Agency for Reconstruction and Development of Infrastructure of Ukraine manage their reconstruction projects.
How is DREAM structured?
The DREAM ecosystem has two levels. The first is the already existing state registers, systems, and services that create a single route for the development of the project: Register of Damaged and Destroyed Property, Geoinformation System (GIS), Sectoral Infrastructure Reconstruction Management System, Diia, United State Register, Unified State Electronic System in the field of construction, Prozorro, Spending.gov.ua. The second level is the “umbrella” system, as it collects data from all first-level systems at each stage of the project and provides open access to them and management and control tools.
Because all project ideas in DREAM fall on a single «bank of projects», each community can present its project to potential investors directly. At the same time, the sources of financing can be diverse: the state or regional budget, funds from foreign governments and organizations, private investors, or combined, within the framework of a public-private partnership.
Why DREAM needs a communication platform?
The task of the communication platform is to provide basic information about the DREAM ecosystem and explain its work’s main principles, in particular, to its key users. The platform also offers detailed clarifications on regulatory support for recovery processes, key tools, and procedures. In addition, the platform https://dream.gov.ua/ will become the primary source of information about the development of the system, tracking of key stages of its implementation according to the timeline, etc.
How was it possible to implement?
The development of the system was initiated by the Coalition of NGOs RISE Ukraine in the summer of 2022 and is carried out with the support of member organisations of the Coalition, particularly the Better Regulation Delivery Office (BRDO) and Transparency International Ukraine. Development financing is provided within the framework of Open Contracting Partnership projects with the support of the British Government.
The principles of the system’s operation, such as transactional, ecosystemic, open by design, were defined in discussions with the public sector and state authorities. To do this, in particular, in October, RISE together with the Kyiv School of Economics (KSE) and the state system of electronic auctions Prozorro.Sales organised the conference “Digital tools for the recovery of Ukraine”. During the event, the concept of an electronic reconstruction management system developed by the BRDO team was presented to foreign partners for the first time.
After that, the system was discussed in Washington last December as part of the international anti-corruption conference and discussion “The role of digital management systems in the reconstruction of Ukraine”, organised by the “Prosperity and Development Project” of the Center for Strategic and International Studies (CSIS).
Also, at the international level, the institutional architecture of the management of funds for the reconstruction of Ukraine was discussed in Brussels at the conference “Ensuring the Integrity of Funding for the Reconstruction of Ukraine” co-organised by us.
As a result of many months of preparation, today we have a clear plan for the implementation of a project of unprecedented scale and complexity – the recovery of Ukraine.
More details about the launch of the DREAM system: https://mtu.gov.ua/news/34267.html
The Cabinet of Ministers of Ukraine approved the State Strategy for the Development of the Fisheries Sector until 2030 by its Order No. 402 of May 2, 2023. The Government also approved the operational plan of measures for its implementation in 2023-2025.
The document was developed by specialists of the Ministry of Agrarian Policy and Food of Ukraine and the State Agency of Reclamation and Fisheries of Ukraine together with the Office of Effective Regulation of BRDO, as well as representatives of scientific circles and public organisations.
Why does Ukraine need this document?
The purpose of developing the Strategy is to ensure the sustainable development of the fishing industry of Ukraine.
The document takes into account climate change and the focus on the European Green Deal, the preservation of natural reserves of aquatic biological resources, reducing the industry’s import dependence, increasing its competitive potential and creating conditions for investment development, as well as increasing the production of aquatic biological resources and products made from them by improving the ecological condition of fishery aquatic areas. entities (their parts) and balance of economic and social interests.
The strategy will ensure a change in state policy in the industry so that Ukraine can fulfill its international obligations. Also, the implementation of the Strategy will guarantee the food security of our country.
During the implementation of the Strategy, it is envisaged to expand regional cooperation within the framework of the Joint Maritime Agenda for the Black Sea, which defines an agreed structure of priorities and actions both at the regional and national levels, in particular in the fisheries and aquaculture sectors, to ensure a sustainable economy aimed at preventing negative climatic changes, preservation of marine space and employment of the population in the region.
What results are expected from the implementation of the Strategy?
In order to implement the Strategy, an operational plan of measures is approved, which contains clear and consistent steps.
The result of achieving the goals of the Strategy is:
We thank the Government for the adoption of an unprecedented document for the Ukrainian fishery industry and look forward to its successful implementation.
Deregulation is the reduction of state regulation in a certain industry. Ukraine is currently undergoing an unprecedented deregulation of the economy: the government is reducing its control over business activities.
Why does Ukraine need deregulation of the economy?
At the beginning of 2023, more than 1,000 instruments were operating in the sphere of state regulation of economic activities. Ukrainian entrepreneurs are obliged to constantly obtain or submit a bunch of licenses, permits, reports, declarations, and approvals.
Not all of these regulatory instruments still make any sense. Many of them duplicate each other, do not perform the functions they should have, and become a source of corruption. Businesses are forced to spend time and money to comply with these regulations purely for the sake of compliance.
In the conditions of war, it is more important than ever to give business the opportunity to “breathe freely” and develop. By deregulating the economy, the government aims to create a new business climate in Ukraine. After the completion of deregulation, the costs of permit documentation will be significantly reduced, which will contribute to the development of business and replenishment of the state budget.
Who implements deregulation?
In January 2023, an Interdepartmental Working Group on Issues of Accelerated Review of State Regulation of Economic Activity – Working Group on Deregulation was established.
The IWG is headed by First Deputy Prime Minister – Minister of Economy of Ukraine Yuliia Svyrydenko and Deputy Prime Minister – Minister of Digital Transformation Mykhailo Fedorov. The meetings are also attended by representatives of the ministries of economy, digital transformation, protection of the environment and natural resources, justice, finance, regulatory service, analytical centers (BRDO, Center for Economic Recovery, Center for Economic Strategy).
How does deregulation happen?
The IWG holds meetings at least twice a month. In the course of them, regulatory instruments are analysed and a decision is made: which of them should be abolished, which should be modernised or digitised, and which should be left unchanged.
After each meeting, relevant projects of acts are developed, which undergo a general approval procedure. After that, the Cabinet of Ministers approves these decisions.
What is BRDO for?
BRDO prepares analytics on the expediency of maintaining or canceling regulations, the priority of digitisation of state regulatory tools, participates in meetings and helps to implement the decisions of the IWG, in particular, to develop normative legal acts.
Read more about the results of the first 4 months of work of the IWG in the column of Oleksiy Sobolev, Deputy Minister of Economy.
Today, the Interdepartmental Working Group on Deregulation reviewed state regulatory instruments related to land issues.
Some of them are recommended to be canceled, the rest to be optimised.
The IWG plans to get rid of 17% of such instruments that belong to the sphere of competence of the Ministry of Agrarian Policy and Food, and 25% of the instruments that are taken care of by the State Property Fund. These are, in particular:
62% of the tools in the areas of competence of the Ministry of Justice and 75% of the tools of the FSMU will be optimised.
The IWG on deregulation was created in January 2023 and is headed by First Deputy Prime Minister – Minister of Economy of Ukraine Yuliia Svyrydenko and Deputy Prime Minister – Minister of Digital Transformation Mykhailo Fedorov. The meetings are also attended by representatives of leading analytical centres, in particular the BRDO.
Temporary structures – for example, kiosks, pavilions – are one of the most common objects for conducting trade in Ukraine. Unfortunately, the procedure for their placement is currently onerous for entrepreneurs and contains a number of corruption risks.
The Parliament registered draft law No. 9233, developed with the participation of the BRDO team. The document comprehensively revises the algorithm for placing the aforementioned temporary structures, namely:
Also, draft law No. 9233 proposes to introduce similar electronic auctions to determine the operators of parking lots. The situation with the legal relations that regulate the arrangement of these sites is currently in a different state. In this market, there is no competition at all, which, in turn, affects the low quality of service provision.
As an alternative, the operator, which is a state or communal enterprise, institution or organization, can be determined by a decision of village, settlement and city councils without holding an electronic auction.
If, in the future, the operator identified in this way wants to hand over one or more of these parking lots to another legal entity or private entrepreneur, it will again need to conduct an electronic auction.
DBN is a regulatory document that defines the requirements for the construction of all possible options for facilities. 97 digitized DBN and changes to them were uploaded to the Single State Electronic System in the Field of Construction.
This is about 8 thousand pages of text, which are now available in digital format.
Why is this important?
For a long time, DBN were not available in electronic format, which created a number of inconveniences and problems for developers of project documentation, expert organizations, construction customers and, in general, for most representatives of the urban planning industry.
For example, it was impossible to search documents and copy text from them because computer systems could not read it. It was very difficult to track changes, so developers of project documentation often made mistakes because they did not know whether they were using the latest version of the document.
With the creation of the Single E-system in Construction, the process of digitizing state building regulations and uploading them to the E-system portal began. The main sets were already available for work in a convenient format, and now all DBNs are posted on the portal https://e-construction.gov.ua/ in the “Registers” / “Legislative and regulatory acts” section.
The portal stores information both about the current document and about the changes that were approved to it, which makes it easy to see what exactly has changed in the new edition.
The team of the Ministry of Communities, Territorial Development, and Infrastructure of Ukraine will continue its work on improving the display of information about DBNs on the E-system portal for the maximum convenience of users.
Digitization of all state building regulations was carried out in cooperation with the Integrated Urban Development in Ukraine II project, which is implemented by the German government company Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and is financed by the Governments of Germany and Switzerland.
The Single State Electronic System in the Field of Construction was developed by the Ministry of Communities and Territorial Development in cooperation with the Ministry of Digital Transformation with the support of the USAID/UK aid project “Transparency and Accountability in Public Administration and Services/TAPAS”. The team of the BRDO participated in the development of the legislative acts on the implementation of the E-system of construction.
The last meeting of the IWG was devoted to the deregulation of the Ukrainian communications sector. The adopted decision is to cancel and moderniіe numerous permits and licenses from the sphere of competence of the National Commission in the fields of electronic communication, radio frequency spectrum and postal communication and State Special Communications.
Some current industry tools are not provided for by the current Law “On Electronic Communications” or any other law and are not used in practice. Among them are all the tools prescribed in the “Regulations on the procedure for the formation of the space of object identification codes of the Ukrainian segment of the world space of object identifiers” (object identifier, OI – a unique number of network equipment or resource/site addresses in the network, for example, url).
It is recommended to cancel:
At the same time, the IWG proposes to work out the issue of registration of international OIs in the Ukrainian segment, in accordance with the ITU Recommendations.
It is necessary to modernise a number of other tools of the field. In particular, licenses for conducting business activities:
The IWG on deregulation is headed by First Deputy Prime Minister – Minister of Economy of Ukraine Yuliia Svyrydenko and Deputy Prime Minister – Minister of Digital Transformation Mykhailo Fedorov. The meetings are also attended by representatives of leading analytical centres, in particular the BRDO.
Ukraine’s digital transformation continues despite the war. In order for the information structure of our state to meet the requirements of global technological progress and for the country to successfully integrate into the international information space, Ukraine needs a single and effective platform of registers that will allow to quickly and efficiently create public electronic registers and information and communication systems.
A clear procedure for its functioning, as well as the procedure for using its software, was adopted by the Government today. Specialists of the BRDO participated in the development of the relevant resolution within the framework of the EU4DigitalUA project, financed by the EU and implemented by FIIAPP.
What was the problem?
State electronic registers were created and functioned in Ukraine not as a single system, but separately from each other. This was due to the fact that each state authority created registers according to its vision, taking into account its own specific functions. Simultaneously with the technological development of registers, the legislation regulating their use also developed in a decentralised manner.
As a result, Ukraine currently has:
How does the Registry Platform solve the problem?
The registry platform will be used to create, develop, test, administer, deploy, and maintain public electronic registries and information and communication systems.
The Platform will operate through a unified, automated and standardised process. Cyber protection of public electronic registers and the creation of their backup copies will also be ensured.
The Government Resolution approves:
The first procedure, adopted today by the Resolution, establishes a clear mechanism for the functioning of the Platform, the technical administrator of which is the SE “Ukrainian Special Systems”, the procedure and requirements for the creation or ordering of the creation, administration and maintenance of public electronic registers or information and communication systems. Thus, the holder of a public electronic register or the owner of an information and communication system can apply to the SE for quick, high-quality and standardised construction of the register/ICS, by concluding a payment contract for joining the Platform.
The second procedure, adopted today by the Resolution, establishes the mechanism for using the Platform software for the creation by state authorities, state enterprises, institutions, and organisations of their own register platforms, which in turn will allow the creation, administration and management of public electronic registers and information and communication systems, based on a free and open-ended contract for the use of the software concluded with the State Enterprise “USS” in agreement with the State Special Communications Administration.
Critical raw materials are minerals that are strategically important for the functioning of the EU economy, but their deposits on the territory of the EU are not sufficient to meet the EU’s needs. As a result, the EU has to import most of them, and this includes certain risks, such as the unreliability of suppliers, on which the economic security of the entire European region depends.
Critical raw materials are used in virtually all sectors of the economy related to electronics, health care, and green energy. Moreover, minerals belonging to the list of critical raw materials are found in things without which we cannot imagine our lives.
For example, lithium is the most common element in smartphone batteries. The main deposits of lithium are located in the territories of Chile, Australia, and Argentina. Or titanium – a metal as strong as steel but almost twice as light and very resistant to corrosion. It is used in the aerospace and medical (implants and prostheses) industries, as well as in cosmetics – titanium dioxide is a common ingredient in decorative cosmetics and sunscreens with natural components. Titanium is the fourth in the list of rare-earth elements on our planet, and its largest deposits are located in China, Japan, the Russian Federation, Kazakhstan, and the USA. Interestingly, Ukraine is among the top 10 countries with the largest deposits of this critical raw material.
In order to reduce the risks associated with the import of critical raw materials and to ensure the stability and continuity of the functioning of the EU economy, the European Commission approved the European Critical Raw Materials Act. This Regulation proposes a list of actions that will allow the EU to guarantee access to those minerals that are critical for the development of the European Union’s economy.
Among them, in particular, is the development of strategic partnerships.
On July 13, 2021, Ukraine and the EU signed a Memorandum on strategic partnership in the raw materials industry and a corresponding roadmap of measures. The memorandum envisages joint efforts of both parties to develop a green economy, create new business opportunities and jobs, increase Ukrainian production of “minerals of the future” and fuel and energy minerals, increase exports, and reduce imports of mineral raw materials.
The European Commission mentioned that Ukraine is a significant global supplier of titanium and can become a potential supplier of more than 20 elements from the list of critical raw materials to the EU. Accordingly, among the planned measures of the EU in the field of trade, support for investments in the mining and processing industries of Ukraine, which work with rare-earth elements, is mentioned.
In order to create the best regulatory conditions for Ukraine’s cooperation with the EU, the team of the EU Project “New Subsoil Code of Ukraine” is working. Among its tasks are the analysis and determination of the obligations of Ukraine as a candidate country for joining the EU in the field of subsoil use and critical raw materials, analysis of the Act on European raw materials until 2030, development of criteria for critical raw materials based on the EU practice, and more.
In order not to miss updates from the Project, follow the information resources of the BRDO or subscribe to the monthly digest.
The project is financed by the European Union and implemented by the Consortium consisting of experts from Projekt-Consult (Germany), MinPol (Austria) and the Better Regulation Delivery Office (Ukraine). This publication reflects the position of the Project and does not necessarily coincide with the position of the European Commission.
Last year, due to a full-scale intrusion, the publication of open data in the field of construction, which were posted on the public portal of the Single State Electronic System in the Field of Construction, as well as on the open data portal data.gov.ua, was suspended.
The e-system in construction worked, but only for authorised users (these are architects, engineers, employees of control bodies, etc.). The information was not publicly available to the general public.
From April 10, 2023, the publication of open data on construction was resumed.
Based on the results of consultations with law enforcement agencies, a list of information was determined, the disclosure of which does not pose a threat to national security and defence. But it is important that information about critical infrastructure facilities remains closed for reasons of national security.
What information can be viewed on the EDESSB portal?
How does open data help in the field of construction?
The Single State Electronic System in the Field of Construction was created in cooperation with the Ministry of Community Development, Territories and Infrastructure and the Ministry of Digital Transformation with the support of the USAID / UK aid project “Transparency and Accountability in Public Administration and Services / TAPAS”. The team of the BRDO participated in the development of the draft legislative acts on the implementation of the E-system of construction.
This year, the cost of the Easter basket is UAH 797, which is 29.5% more than last year.
“Eggs have increased in price the most, their cost has more than doubled. This trend has been going on since last year and is associated with the reduction of livestock, the increase in the price of fodder and complicated logistics. At the same time, flour — one of the key ingredients of paska (Easter cake), which is included in its cost — has become cheaper by 12%,” explains Nataliia Gerasymenko, “Agriculture” sector expert of the BRDO.
Eggs rose in price by as much as 134.7%, followed by meat (+29.86%), paska (+26.08%) and alcohol (+4.27%).
Procedures for connecting to electricity and gas networks in Ukraine have a strong impact on the ease of doing business and the investment climate in the country. In the latest World Bank Doing Business report for 2020, the procedures for connecting to electricity networks were the very factors that significantly lowered Ukraine’s rating. In particular, the duration of this process in our country is currently three times longer than in the OECD countries.
The problem in this procedure is the allocation of land plots by local self-government bodies for the needs of connecting to engineering networks. Based on the results of the discussion at the IWG meeting, it was decided to conduct an additional study of issues related to accession procedures at the expert level and to prepare proposals for a comprehensive solution to the problem. The projected and short terms of accession will positively affect the investment climate of Ukraine, contribute to the creation of new jobs, increase in the production of goods and services, and additional revenues to the state budget.
To remind, BRDO specialists have been working on simplifying the procedure for joining engineering networks in Ukraine for several years. Analysis and proposals for the regulation of this issue can be found in the Green Paper “Regulation of connection to utility networks”.
In general, during the work of the IWG, almost 40 instruments of state regulation were analysed in the sphere of competence of the Ministry of Energy of Ukraine and the National Commission in Energy and Communal Services – it is recommended to cancel the certificate of state registration of production sharing agreements – by creating a register of production sharing agreements and getting rid of the rudiment of a paper certificate.
The rest of the tools are recommended to be optimised and modernised, for example, the conclusion based on the results of the state examination of investment projects in the field of gas and energy, which should be obtained in the process of interdepartmental interaction of authorities without the involvement of business.
Previously, the IWG analysed and recommended the cancellation or optimisation of instruments from the sphere of competence of 8 central executive bodies. In particular, the ministries of economy, healthcare, protection of the environment and natural resources, education and science, culture and state information policy, infrastructure, etc. In general, according to the results of previous meetings, the IWG recommended canceling about 30% of tools, optimising 70%.
The IWG on deregulation is headed by First Deputy Prime Minister – Minister of Economy of Ukraine Yuliia Svyrydenko and Deputy Prime Minister – Minister of Digital Transformation Mykhailo Fedorov. The meetings are also attended by representatives of leading analytical centers, in particular the BRDO.
On March 16, the European Commission approved the European Critical Raw Materials Act – a proposal for a regulation on ensuring the sustainable supply of critical raw materials to the European Union. This Regulation proposes a list of actions that will allow the EU to guarantee access to those minerals that are critical for the development of the European Union’s economy.
A critical raw material is a useful mineral of various levels of processing that is used both for the manufacture of everyday goods (such as mobile phones) and for strategic components (such as wind turbines), i.e. it is critically important for strategic sectors of the economy. The EU imports 90% of critical raw materials from non-European countries. For example, wind and other green energy, telecom, hydrogen technologies, pharmacology, and the military-industrial complex – all these areas depend on supplies of critical materials from countries outside the EU. At present, the continuity of the import of critical raw materials is under threat because China and the Russian Federation are, in particular, among the countries supplying such minerals.
The Regulation establishes a regulatory framework for supporting the development of internal potential and strengthening the sustainability and circularity of the most important raw material supply chains in the EU. It is aimed at reducing the risks of supplying critical raw materials, especially in such industries as defence, digital, and aerospace, as well as at creating conditions for the development of environmentally friendly production. According to it, compared to a similar list from 2020, the list of critical raw materials expanded by seven positions (three were removed), and a separate list of strategic raw materials critical for ensuring the green and digital transition of the EU was created.
The Regulation sets clear indicators for increasing internal supply chains of critical raw materials and their diversification:
It is important that from now on, the import of any type of critical raw materials from a single third country, at any relevant stage of processing, cannot exceed 65% of the EU’s annual consumption.
How will the Regulation be implemented?
The European Commission has published a list of steps that will help ensure the sustainable supply of critical raw materials to the EU, as well as the implementation of the Regulation:
It is important that among the mentioned trade activities of the EU is the support of investments in the extraction and processing of rare-earth elements in Ukraine. For example, they are needed for the operation of wind turbines, and, according to the forecast, the need for such elements will increase 5.5 times by 2050.
In addition, on July 13, 2021, Ukraine and the EU signed a Memorandum on strategic partnership in the raw materials sector and a corresponding roadmap of measures. The memorandum envisages the joint efforts of both parties to develop a green economy, create new business opportunities and jobs, increase Ukrainian production of “minerals of the future” and fuel and energy minerals, increase exports, and reduce imports of mineral raw materials.
How does Ukraine join the process?
Back in 2019, the EU Project “New Subsoil Code of Ukraine” was launched, within which experts provided support to the Ukrainian government in creating a new Subsoil Code as part of the process of deepening the Ukraine-EU partnership.
It is planned to continue work in this direction in 2023. Among the main tasks:
The Project experts also plan to update the research on investment barriers and risks for European investors in the Ukrainian subsoil sector, prepared by the Project in 2022, to develop criteria for determining critical raw materials based on EU practice, to develop drafts of standard production sharing agreements (PSAs) for the exploration and production of solid minerals and hydrocarbons, to explore the market of advanced battery technologies in Ukraine and relevant players in science and industry to ensure sustainable energy supply in the conditions of martial law and post-war reconstruction.
In order not to miss updates from the Project, follow the information resources of the BRDO or subscribe to the monthly digest.
The project is financed by the European Union and implemented by the Consortium consisting of experts from Projekt-Consult (Germany), MinPol (Austria) and the Better Regulation Delivery Office (Ukraine). This publication reflects the position of the Project and does not necessarily coincide with the position of the European Commission.