On 31 May 2024, the Ukrainian government submitted a draft law to Parliament detailing the principles of its climate policy, which includes the establishment of a national ETS. In parallel, the government launched a public consultation to approve a draft strategy that includes further details on the timeline and roadmap towards the adoption of the Ukrainian ETS.
The proposed “Draft Law on the Basic Principles of Climate Policy", mandates the establishment of an ETS as one instrument to reach the nation’s climate policy objectives. The law reiterates the goal of 65% GHG emission reductions by 2030 as compared to 1990 level. The system is expected to have an absolute cap on emissions for covered sectors and should be established by a separate legislative act.
In parallel, on 5 June 2024, the Ministry of Environmental Protection and Natural Resources of Ukraine (MEPNR) launched a one-month long public consultation on the “Draft Strategy for the Implementation of a GHG ETS in Ukraine until 2033”. This strategy, which requires governmental approval at a later stage, outlines a three-stage process for preparing and launching the ETS:
- 2024-2025 – Preparation stage: This includes the adoption of the ETS law and necessary secondary legislation; improving MRV infrastructure and building capacity of the institutions and stakeholders to be involved in the ETS implementation.
- 2026-2028 – ETS pilot phase: This phase aims to test the readiness of the system, identify potential issues and correct any problems in the system’s functioning.
- 2029-2033 – Full functioning and further development: This stage involves the full operation of the ETS, potential sectoral expansion, and preparation to link with the EU ETS.
According to the Ministry’s Draft Strategy, one of Ukraine's strategic goals is to ensure the effective functioning of its ETS, which should account for national circumstances while aligning with the European Union ETS. In recent years, Ukraine has made significant preparatory efforts toward establishing this system. The introduction of an ETS is one of the commitments under the 2014 Association Agreement between Ukraine and the EU, and an important element of the EU-Ukraine integration process.
