Introducing an emissions trading scheme (ETS) in Ukraine

Context

Climate change is having a noticeable impact all over the world and poses major challenges for national governments. Emissions trading schemes are intended to make a significant contribution to combating climate change. Under these schemes, governments set upper limits or ‘caps’ for greenhouse gas emissions in their countries. Companies then receive ‘emission allowances’, permitting them to emit defined quantities of greenhouse gases.

Ukraine’s economy is traditionally dominated by heavy industry. In terms of economic output, the country’s carbon dioxide emissions are three times the EU average. This is one of the main reasons why Ukraine has made a commitment to adapt its climate policy. One of the commitments under the Association Agreement between the European Union and Ukraine is the introduction of an emissions trading scheme (ETS).

Objective

Ukraine establishes an emissions trading scheme to help mitigate climate change.

Approach

The project is supporting the Ministry of Environmental Protection and Natural Resources of Ukraine in establishing an emissions trading scheme (ETS). It is working closely with the Ministry to set up the fundamental component of the ETS: the monitoring, reporting and verification (MRV) system.

Furthermore, the project is assisting the Ministry in making the necessary changes to its legislation and establishing a data management system. With all of this in place, the country will be able to create a reliable and precise emissions database – the fundamental requirement for an ETS, which successfully determines and records companies’ greenhouse gas emissions. German experts advise the Ministry’s employees on calculating the cap for greenhouse gas emissions and the impacts this will have for Ukraine’s economic development. In order to ensure that an established ETS is effective and enjoy a high level of public support, all key stakeholders are involved in this process.

Last update: July 2023