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

Foto: Yannick-Morelli/ shutterstock.com

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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