Ukraine’s law for a green transformation has the potential to truly reshape the country’s energy sector and create numerous opportunities for its industry and economy, writes Andrii Zhupanyn.
Andrii Zhupanyn is an elected deputy in the Ukrainian Parliament and Chairman of the ‘United for Recovery’ inter-factional parliamentary association.
The Ukrainian Parliament on June 30 has adopted the law designed to enable restoration and green transformation of Ukraine’s energy system.
This is a big step towards achieving the energy and climate goals of the state, which will help to rebuild the Ukrainian energy system on a new sustainable basis, making it more resilient and protected. Ultimately, it aims to boost Ukraine’s energy transition for achieving energy security and decarbonisation goals.
This landmark piece of legislation is truly revolutionary in some of its provisions. It provides for certification of origin for green electricity and biomethane, net billing for prosumers, contracts for difference and better wholesale market integration for utility-scale renewables, as well as conditions for holding auctions for the allocation of quotas to support projects for the construction of new capacities.
Thanks to these changes, Ukraine creates conditions for both public and private investments in renewable energy and overall decentralisation and modernisation of the energy system. New legal provisions also include improving conditions for connecting to grids of the transmission system operator and distribution system operators for decentralised generation and energy storage facilities.
Ukraine has the potential to produce 30% of Europe’s biomethane and possesses favourable conditions for the development of solar power plants. It also boasts one of the highest wind generation potentials, including offshore resources, which amount to 251 GW according to the World Bank estimate. Having the goal to increase the share of renewable energy in its overall energy mix to one third by 2030 and facing multiple challenges to restore the war-damaged energy sector and improve its resilience, Ukraine will need to mobilise billions in investments into clean decentralised energy.
Certificates of origin for Ukraine’s renewable energy
The law provides for the establishment of guarantees of the origin – one of the key tools to accelerate uptake of renewable energy by consumers. Importantly, it will allow Ukrainian businesses and industries to use clean power for decarbonising their production chains and operations, getting better access for exports of more sustainable products to the countries of the European Union.
The possibility of switching to clean energy is vital for Ukrainian exporters in view of the need to reduce the carbon footprint of their products in view of the planned introduction of the carbon border adjustment mechanism by the EU.
Ukrainian export-oriented industries can get better access to EU markets by switching to renewable energy procurement for their own needs and will be able to supply goods to EU member states without excessive taxation from Carbon Border Adjustment Mechanism (CBAM).
Guarantees of origin will boost incentives to use clean energy with certification of electricity produced from renewable sources, such as solar, wind, biomass, biogas and hydroelectric power plants. This is an effective tool that will avoid additional taxation of Ukrainian goods when imported into EU countries from 2026.
The introduction of EU-aligned renewable energy certification at national and regional levels will also allow for exports and imports of green electricity and biomethane, creating conditions for better integration of Ukraine into EU energy markets.
By introducing certification of biomethane we also deliver for the EU-Ukraine strategic partnership memorandum on renewable gases, signed in February 2023. Its further implementation will strengthen energy security, support the fight against climate change and have a positive impact on the economic recovery of Ukraine.
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