Context
Climate change poses major challenges for governments worldwide. Emissions trading systems (ETS) can help to avert the climate catastrophe. Under an ETS, countries set upper limits (caps) on their emissions and issue emission certificates to companies, which can be used to offset a company’s own emissions or can be sold. The total number of certificates is continuously reduced to gradually lower emissions.
Ukraine’s economy has been traditionally dominated by heavy industry. In terms of economic output, the country’s carbon dioxide emissions are 2,4 times the EU average.
The introduction of an ETS is foreseen under the Association Agreement with the European Union (EU) and is a criterion for EU accession. The Ministry of Economy, Environment and Agriculture of Ukraine is to implement this.
Goal
Ukraine introduces an emissions trading system to help mitigate climate change.
Approach
On behalf of the German Federal Ministry for the Environment, Climate Action, Nature Conservation and Nuclear SafetyFederal Ministry for Economic Affairs and Climate Action (BMUKNWK), the project is supporting the Ministry of Economy, Environment and Agriculture of Ukraine in establishing a national ETS.
The project is advising the Ministry on modernising the legislation and establishing a data management system. This will provide the basis for a reliable emissions database that will measure companies’ emissions.
Furthermore, the project has assisted the Ministry in revising the law introducing the new monitoring, reporting and verification (MRV) system, which had to be adapted given the consequences of Russia’s war of aggression. In addition, it is advising the Ministry on setting the caps for emissions and on how a gradual lowering of the caps will affect Ukraine’s economy.
The project is also supporting the establishment of an authority to implement the ETS and is training its employees.