Input Paper „Euro­pean Green Deal for Ukraine: current status and future“

Foto: Yannick-Morel­li/

Im Rahmen unseres Pro­jek­tes „Öst­li­che Part­ner­schaft Plus“ ver­öf­fent­li­chen wir eine zweite Reihe von Input Papers zum Thema Per­spek­ti­ven und Prio­ri­tä­ten des  Euro­pean Green Deals (EGD) in der Ukraine, Geor­gien und Moldau. Die Autoren aus der Region (Nata­liya Andru­se­vych, Manana Koch­ladze, Iuliana Can­t­ara­giu) ana­ly­sie­ren die Rolle der Euro­päi­schen Union bei der Unter­stüt­zung der Umset­zung des EGDs und for­mu­lie­ren ihre Hand­lungs­emp­feh­lun­gen an die Ent­schei­dungs­trä­ger in Berlin und Brüssel.

By Nata­liya Andru­se­vych, Chair of the Gover­ning Board, Resource and Ana­ly­sis Center “Society and Environment”

Why is the Euro­pean Green Deal important for Ukraine?

The Euro­pean Green Deal (adopted by the EU in 2019) has a major impact on atti­tu­des towards sus­taina­bi­lity and green trans­for­ma­tion in Ukraine. Climate and envi­ron­men­tal issues are incre­a­singly playing a role in the dis­course of offi­cials and in the busi­ness sector, and are appearing on policy agendas at the highest level. 

For Ukraine, there are several important points asso­cia­ted with joining the EGD processes:

  • Ukraine becomes a part of the pan-Euro­pean process of green transformation;
  • Ukraine obtains new oppor­tu­nities for green funding, envi­ron­men­tal moder­ni­sa­tion, and coope­ra­tion on con­crete green issues with the EU and its member-states;
  • Ukraine recei­ves a new impetus to imple­ment its exis­ting inter­na­tio­nal com­mit­ments (EU-Ukraine Asso­cia­tion Agree­ment, Paris Agree­ment, Con­ven­tion on Bio­lo­gi­cal Diver­sity, Energy Com­mu­nity Treaty).

Ukraine has estab­lis­hed an exten­sive legal and policy basis for sus­tainable deve­lo­p­ment. Natio­nal Sus­tainable Deve­lo­p­ment Goals for 2030 have been estab­lis­hed by pre­si­den­tial decree. These natio­nally adapted SDGs are accom­pa­nied by a frame­work for moni­to­ring pro­gress, with annual reports. The State Envi­ron­men­tal Policy Stra­tegy and the more recent Natio­nal Economy Stra­tegy both iden­tify sus­tainable deve­lo­p­ment as a key goal and principle. There are refe­ren­ces to sus­tainable deve­lo­p­ment in nume­rous other natio­nal sec­to­ral policy documents.

In prac­tice, these and other stra­te­gies have had little effect on deve­lo­p­ment trends. This is due to the overall lack of capa­city for stra­te­gic and policy plan­ning and imple­men­ta­tion in Ukraine. In addi­tion, sus­tainable deve­lo­p­ment is usually per­cei­ved as simply “stable” deve­lo­p­ment, i.e. con­ti­nuous growth. Tra­di­tio­nally, green issues have not been a prio­rity on the poli­ti­cal agenda in Ukraine, and the envi­ron­men­tal com­po­nent of sus­tainable deve­lo­p­ment has recei­ved less atten­tion than any other components.

What are the prio­ri­ties for and forms of cooperation?

Ukraine has expres­sed its support for the EGD as well as an ambi­tion to align its poli­cies with the EGD goals. Ukraine initia­ted the bila­te­ral high-level dialog on EGD and pro­mo­tes coope­ra­tion on con­crete sec­to­ral issues (such as hydro­gen, CBAM, green alli­an­ces). Ukraine out­lined its vision for future coope­ra­tion on the EGD in a posi­tion paper pre­sen­ted to the Euro­pean Com­mis­sion in the summer of 2020. Several poli­cies and stra­te­gies now include refe­ren­ces to the EGD.

The recently adopted “Natio­nal Economy Stra­tegy 2030” intro­du­ced the target of tran­si­tio­ning to a climate-neutral economy by 2060. The key targets envi­sa­ged by the EU policy docu­ments imple­men­ting EGD in most sectors have been fully or at least par­ti­ally incor­po­ra­ted into Ukraine’s stra­te­gic docu­ments (government pro­gram­mes, action plans, stra­te­gies, etc.). However, Ukraine lags behind in many areas: while the EU is impro­ving exis­ting instru­ments, Ukraine plans to intro­duce them (for example, emis­si­ons trading system, che­mi­cals regu­la­tion or waste management).

Several areas are in the focus of policy debate in the context of the EGD, while some other areas are not on the agenda. The top prio­rity areas are energy, climate change, indus­trial policy in the context of CBAM and energy effi­ci­ency. The areas of shared inte­rest within the EGD, as defined at the meeting of the EU-Ukraine Asso­cia­tion Council, include energy effi­ci­ency, hydro­gen, coal regions in tran­si­tion, indus­try alli­an­ces and climate gover­nance archi­tec­ture. The zero pol­lu­tion and bio­di­ver­sity com­pon­ents of the EGD have not yet been the subject of much debate.

Incre­a­sing the energy pro­duc­ti­vity of its economy lies very much in Ukraine’s inte­rest and the country is facing a need to moder­nise its pro­duc­tion base in all sectors. Thus, there are strong drivers for envi­ron­men­tal moder­ni­sa­tion, inclu­ding energy effi­ci­ency. The busi­ness sector is inte­res­ted in obtai­ning state support to help moder­nise pro­duc­tion faci­li­ties and is not pre­pa­red to cover moder­ni­sa­tion costs through private invest­ment alone.

Ukraine has made signi­fi­cant pro­gress in reforming its energy sector since 2014. There is a need for further incen­ti­ves for reform in other areas: agri­cul­ture, trans­port, envi­ron­ment, climate change, che­mi­cals, industry.

Most of the reforms have been driven by the EU-Ukraine Asso­cia­tion Agree­ment with the help of inter­na­tio­nal tech­ni­cal assi­s­tance. For example, Ukraine has made pro­gress in libe­ra­li­sing its energy markets. The share in electri­city pro­du­ced from rene­wa­bles incre­a­sed from 6.2% in 2016 to 12.4% in 2020. The EGD may promote these and other reforms and the decar­bo­ni­sa­tion of the natio­nal economy, in par­ti­cu­lar by gree­ning foreign invest­ment by inter­na­tio­nal finan­cial institutions.

Ukraine has made insti­tu­tio­nal arran­ge­ments spe­ci­fic to the EGD in reac­tion to the oppor­tu­nities and threats emer­ging for Ukraine. In 2020, the Government of Ukraine set up a coor­di­na­tion body spe­ci­fi­cally to address climate change within the EGD initia­tive. In 2021, a special working group was estab­lis­hed to deal with CBAM and ensure dia­lo­gue with the Euro­pean Com­mis­sion regar­ding the draft regulation.

Further libe­ra­li­sa­tion of energy markets, as well as signi­fi­cant pro­gress in other sec­to­ral reforms, must be coupled with main­strea­ming decar­bo­ni­sa­tion throughout all sectors. All reforms in the EGD-related sectors will require sys­te­ma­tic revi­sion of the rele­vant natio­nal legis­la­tion, capa­city buil­ding and invest­ment in infra­st­ruc­ture in order to fully imple­ment EU acquis.

In principle, macro-eco­no­mic aid and other assi­s­tance are con­di­tio­ned on car­ry­ing through key reforms. Imple­men­ta­tion the EU-Ukraine Asso­cia­tion Agree­ment is subject to con­ti­nuous moni­to­ring and the results are publicly avail­able. Macro-eco­no­mic and tech­ni­cal assi­s­tance are usually subject to spe­ci­fic con­di­ti­ons related to spe­ci­fic reforms, such as anti-cor­rup­tion reforms.

What is the per­spec­tive for the future?

All fields encom­pas­sed by the EGD are covered by the pro­vi­si­ons of the EU-Ukraine Asso­cia­tion Agree­ment, which means that suc­cess­ful imple­men­ta­tion of the Asso­cia­tion Agree­ment will enhance Ukraine’s pro­spects in the EGD context. The upco­m­ing revi­sion (update) of the Asso­cia­tion Agree­ment will streng­t­hen Ukraine’s pro­gress towards the EGD objec­ti­ves, as well as  improve the pro­spects for a greater invol­ve­ment of the country in the EGD pro­ces­ses in the EU.

The EGD creates a wide scope for mutually bene­fi­cial align­ment of Ukraine’s policy and legis­la­tion with rele­vant EU poli­cies and legis­la­tion, as well as coope­ra­tion between Ukraine and the EU in key areas of the EGD. The EGD com­mu­ni­ca­tion itself and other imple­men­ting policy docu­ments contain spe­ci­fic refe­ren­ces to prio­rity coope­ra­tion coun­tries, and to Ukraine in par­ti­cu­lar. For example, the EU Hydro­gen Stra­tegy men­ti­ons Ukraine as a key part­ners. Ukraine already par­ti­ci­pa­tes in a number of green alli­an­ces (Euro­pean Raw Mate­ri­als Alli­ance, Euro­pean Clean Hydro­gen Alliance).

The EU has a general new pro­po­sal for its Neigh­bour­hood Policy, while Ukraine and other asso­cia­tion coun­tries express the need for special “trio” approach, inclu­ding with regard to to the EGD. It is very important to engage the EaP coun­tries into dis­cus­sions on the EGD in the EU to build the co-owners­hip of the process, inclu­ding by taking into account spe­ci­fic cir­cum­s­tan­ces in each country.

Ukraine is willing to agree on an EGD roadmap with the EU, as are the Balkan coun­tries. The deve­lo­p­ment and imple­men­ta­tion of such a roadmap could provide new impetus for a green trans­for­ma­tion of Ukraine and support the EU’s own green tran­si­tion. The EU and Ukraine should launch flagship initia­ti­ves – mutually bene­fi­cial stra­te­gic part­ners­hips or pro­jects on spe­ci­fic issues, inclu­ding climate gover­nance archi­tec­ture, energy poverty era­di­ca­tion, climate-ori­en­ted agri­cul­ture, hydro­gen, Ukraine’s par­ti­ci­pa­tion in green alli­an­ces, deve­lo­p­ment of a Natura 2000+ cluster to support bio­di­ver­sity pro­tec­tion in Europe. The EU and its member-states should support Ukraine’s inte­gra­tion into new green pro­duc­tion chains through indus­trial dia­lo­gue, infor­ma­tion exchange, support for invest­ments in green inno­va­tion and infra­st­ruc­ture. This will promote the inte­gra­tion of Ukraine’s busi­nes­ses into the new green system of the EU. Sepa­rate flagship initia­ti­ves could target green cities, green com­mu­nities, and more gene­rally citi­zens of Ukraine (e.g. Euro­pean Climate Pact and New Euro­pean Bauhaus).

Nata­liya Andrusevych,
Chair of the Gover­ning Board, Resource and Ana­ly­sis Center “Society and Environment”

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