Emissions Trading System in Ukraine

Abstract

The article highlights the conceptual foundations for the introduction of an emissions trading system in Ukraine from a practical perspective. It is found that after signing the EU-Ukraine Association Agreement in June 2014, Ukraine pledged to implement a number of EU environmental directives, including Directive 2003/87/EU establishing a system for trading in greenhouse gas emission allowances. It is established that in order to improve the level of environmental safety in Ukraine and reduce the impact and consequences of climate change, the Government of Ukraine approved the Strategy for Environmental Safety and Climate Change Adaptation until 2030 in 2021. It is revealed that since the beginning of 2022, Ukraine has fulfilled its obligations under international treaties, and it is found that most companies comply with the requirements of Ukrainian legislation and support the country's decision to introduce an emission allowances trading system in Ukraine. The Verkhovna Rada of Ukraine adopted the Law of Ukraine “On the Principles of Monitoring, Reporting, and Verification of Greenhouse Gas Emissions”, according to which, starting from January 1, 2021, Ukraine will monitor, report and verify greenhouse gas emissions at the level of individual facilities, which enables Ukraine to ensure the trading of greenhouse gas emission allowances. It is established that Ukraine’s domestic and foreign policy prioritize the prevention of climate change through a substantial reduction in greenhouse gas emissions, particularly in wartime. Starting in 2025, Ukraine will introduce a greenhouse gas emissions trading system as part of its efforts to reduce emissions and achieve carbon neutrality. We find that clear rules must be established to ensure effective operation, supervision, and control of the emissions trading system in Ukraine. This includes identifying specific bodies responsible for regulating, implementing, and monitoring the system’s proper implementation in Ukraine, while also defining and delegating their respective roles and rights in regulating, implementing, and controlling the emissions trading system.