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Official name of scheme

Ukraine

ETS Status

under development

Jurisdictions

Ukraine

General Information

Ukraine plans to establish a national ETS in line with its obligations under the “Ukraine-EU Association Agreement”, which entered into force in September 2017. Issues related to climate change are addressed in Article 365 (c) Title V and in Annex XXX to the agreement, which outlines steps for the implementation of a national ETS, including:

adopting national legislation and designating a competent authority or authorities;
establishing a system for identifying relevant installations and GHGs;
developing a national allocation plan to distribute allowances;
establishing a system to issue allowances to be traded domestically among installations in Ukraine; and
establishing MRV and enforcement systems, as well as public consultations procedures.

The country has since established a national MRV system, with its scope partially covering activities similar to the EU ETS, to provide a solid basis for the upcoming ETS. Since 2021, the MRV procedures have been applied by regulated installations. From 2022, due to the Russian war of aggression against the country, the MRV system was implemented on a voluntary basis. In January 2025, the Ukrainian Parliament reintroduced mandatory reporting under the MRV system. Covered installations will have to report their 2024 emissions. For those located in areas where military operations are taking place or in the temporarily occupied territory, some flexibility applies.

In October 2024, the Ukrainian Parliament approved the Law on the Basic Principles of State Climate Policy, mandating the establishment of an ETS. According to the law, the Ukrainian ETS will have an absolute cap on emissions for covered sectors and will be established by governmental decree.

From 2023, work on the “Roadmap on the Introduction of a GHG ETS” has been ongoing. In November 2024, a draft governmental decree “On approval of an action plan for the national GHG ETS development”, produced as part of this process, was published for a one-month stakeholder consultation. The action plan stipulates that the pilot stage of the ETS will commence from 2028, with full functioning of the system starting “not earlier than in three years after martial law will be halted or cancelled”.

Emissions & Targets

238.3 MtCO₂e (2022)

By 2030: Economy-wide net domestic reduction of 65% in GHG emissions compared to 1990 (updated NDC)

By 2050: Climate neutrality (Law on the Basic Principles of State Climate Policy)

Carbon tax: CO₂ tax

Compliance

MONITORING: Monitoring is required annually for CO₂ emissions from the following activities:

fuel combustion in installations over 20 MW;
oil refining;
the production of coke, metal ores, pig iron, steel, ferrous alloys including ferroalloys (if the total nominal thermal capacity of combustion units exceeds 20 MW), cement clinker, lime or the calcination of dolomite or magnesite (with a production capacity exceeding 50 tonnes per day), nitric acid, ammonia, and glass production (with a production capacity exceeding 20 tonnes per day);
N₂O emissions from the production of nitric acid.

Monitoring takes place according to Monitoring Plans, approved by the Ministry of Environmental Protection and Natural Resources (MEPNR).

REPORTING: Covered entities are obliged to submit a verified annual report on GHG emissions to the MEPNR by the end of March of the following year.

VERIFICATION: Emissions data reports and their underlying data require third-party verification by an accredited auditor.

FRAMEWORK: Law on the principles of monitoring, reporting, and verification of GHG emissions. Order of the Cabinet of Ministers on approval of the procedure for monitoring and reporting on GHG emissions. Order of the Cabinet of Ministers on verification of operators reports.