Green Deal

For at least the first two decades of the 21st century, the world has been plagued by natural disasters that have claimed thousands of lives and deprived millions of shelter, livelihoods, work and basic comfort. Scientists are unanimous in their conclusion, which has become obvious to modern times: if we do not stop in our thoughtless exploitation of world resources, humanity will face a real threat of defeat. All previous fragmentary measures and initiatives could not and cannot have a lasting effect, as they were aimed at highly segmented changes. There is a need for a comprehensive and global transition strategy that will give the world’s population a chance to preserve both – themselves and the world around them.

Therefore, in December, 2019 the European Commission has announced the launch of an ambitious European Green Deal (EGD). While the name means that the EU is working towards transforming itself into a modern, resource-efficient and competitive economy, positive changes are needed on a global scale. Therefore, the Green Deal marks milestones and priorities for which go well beyond the EU.

The main goal of this largest action programme of the European Union is a sustainable transition to climate neutrality throughout Europe by 2050. To achieve this ambitious goal, a number of fundamental documents are being developed in the following areas: climate, clean and affordable energy, circular economy, sustainable and smart mobility, green agriculture, biodiversity conservation, zero pollution and resource-saving construction. Strategies with a planning horizon until 2030 and 2050 are being drafted and new European legislation is being adopted, including revision of the existing laws and Directives.

Thus, on June 14, 2021, the European Climate Law came into force. Exactly one month later, the European Commission adopted the so-called ‘Fit for 55 Package’ that aims to bring EU climate, energy, transport, land use and taxation policies in line with the requirements of the Climate Law, with the overarching goal to achieve a 55% reduction in greenhouse gas emissions by 2030 (compared to 1990 level). In addition, in less than two years since the start of the EGD, the EU Biodiversity Strategy till 2030, the EU Forest Strategy, the EU New Strategy on Climate Change Adaptation, the Soil, Plastics, Chemicals Strategies, the Zero Pollution, the Circular Economy and Organic Production Action Plans were developed and/or adopted. In addition, the EU system for emissions trading in energy, aviation, ships and land transport, the Carbon Border Adjustment Mechanism and the Climate Social Fund have been established.

The implementation ​​of synchronized movement towards the goals of the EGD of all European countries without exception (“leave no one behind” principle) is designed to financially support a specifically created Just Transition Fund and an improved mechanism of the Eastern Partnership. The European Union invests heavily in research and development of innovative solutions in all areas that shape the integrity of the Green Deal. It is important to note that the EGD itself is extremely dynamic and flexible in the context of its internal architecture, so the above mentioned areas are not an exhaustive and definitive list, new ones may be added soon that have not been included so far.

Declaring itself a global leader in the move towards climate neutrality, the EU is making every effort to spread the EGD agenda and mechanisms for its implementation to the world level. To this end, the European Union proposes to use new instruments of “Green Deal Diplomacy”, trade policy and development support policy.

Despite a significant lag in the context of combating the energy intensity of GDP and a significant percentage of greenhouse gas emissions compared to even its European neighbours, Ukraine is aware of the need for radical changes in approaches to climate and energy. Guided by this reason and by the relevant provisions of the Association Agreement with the EU, shortly after the proclamation of the EGD, the National Concept “The Green Transition until 2050” was developed and submitted for consideration, which is very close in structure and spirit to the Green Deal. However, this document has not yet entered into force, but work on its improvement continues. In addition, prior to the recent United Nations Climate Change Conference COP26 in Glasgow, the Government of Ukraine approved an updated National Determined Contribution (NDC) under the Paris Agreement, which commits to reducing greenhouse gas emissions increased to 65% by 2030, comparing  to the level of 1990 (previous commitment was 40%).

Officially, Ukraine has not yet joined the EGD, but has announced its intention to participate in its implementation since its proclamation. The country is gradually bringing its own legal framework in line with EU norms and is constantly consulting with its EU partners on full integration into the implementation of the Green Deal. The high-level dialogue on this issue was launched in February 2021 during the meeting of the Prime Minister of Ukraine Denis Shmygal and the Executive Vice President of the European Commission Franz Timmermans in Brussels. During the next meeting in May they discussed, in particular, the long-term strategy on climate neutrality of Ukraine, climate management architecture, renewal of the NDC, financing the “green transition”, the Carbon Border Adjustment Mechanism, the work of the Energy Efficiency Fund, hydrogen technologies, the “fair transition” for coal regions, European Industrial Alliances and the Ukrainian Forestry Strategy.

On 24 March 2021, the Government of Ukraine approved a resolution “On the establishment of a working group to agree on an approach to the application of the Carbon Border Adjustment Mechanism (CBAM) in Ukraine for consultations with the European Commission”. Based on the results of the working group’s activity, it is expected to develop a consolidated position of the Ukrainian side on the approach to the application of the CBAM.

In September 2021, the second working meeting on Ukraine’s prospects in the EGD was held in Kyiv, co-chaired by Olga Stefanishyna, Vice Prime Minister of Ukraine for European and Euro-Atlantic Integration, and DG NEAR Deputy Director General and Head of the Support Group of Ukraine (SGUA) Katarína Mathernová. The parties discussed a wide range of issues related to improving the donor support system for the “green transition” in Ukraine, expanding the range of issues to be addressed in the field of environmental protection in the context of effective response to the “triple planetary crises” (climate change, pollution and nature loss), the urgent need for a number of laws (on Waste Management, Industrial Emissions, Environmental Control, Emerald Network) and the National Forest Management Strategy. These steps will provide a solid basement for moving towards emissions and pollution reduction, a circular economy and biodiversity conservation.

The Ukrainian side reaffirmed its intention to take all appropriate steps to fully join the EGD. On behalf of the EU, Ms. Maternova assured the readiness of the European Union to provide adequate financial and organizational assistance to Ukraine to fulfil its voluntary commitments, in particular, to establish a national Climate Fund that meets international standards.

An essential feature of EU assistance to Ukraine in the part of the movement towards accession to the EGD and its further implementation is that this assistance did not start from scratch. The long-lasting experience of cooperation and implementation of hundreds of projects under the Eastern Partnership Programme has created capacity at the national, regional and local levels and laid a solid platform for a qualitatively new level of tasks set by the Green Deal. An analysis of almost three dozen large-scale programmes and projects funded by the EU and currently implemented in Ukraine with the direct participation of its structures and experts shows that their goals and results (obtained or expected) largely meet the needs of EGD progress in all areas. For example, the names of the programs themselves – EU4Environment, EU4Climate, EU4Digital, EU4PAR (EU for Public Administration Reform), Association4U (assistance in implementing the Association Agreement with the EU), Energy Efficiency Support Programme for Ukraine (EE4U) clearly indicate their contribution to the relevant areas of the Green Deal.

Specifically through the EE4U Programme (EE4U, EUR 104 mn), the EU has been supporting the establishment and activities of the Energy Efficiency Fund. The Fund was launched by a joint initiative of the EU, Germany and the Ukrainian government.  It is the main technical and financial mechanism supporting energy efficiency in housing The residential sector in Ukraine remain highly energy intensive and account for around 40% of the whole energy use in the country. The EEF issues grants to homeowners associations for energy efficiency measures in multi-family buildings with the purpose to reduce energy consumption, decrease energy bills and improve living conditions of Ukrainian residents.

The Eastern Europe Energy Efficiency and Environment Partnership (E5P Fund) works to deliver green infrastructure municipal projects in the Eastern Partnership region, to boost energy efficiency and improve the environment, whilst promoting reforms and policy dialogue. So far, in Ukraine E5P has supported implementation of 25 projects in the fields of district heating, energy efficiency in public buildings, green public transport, solid waste and wastewater treatment. The future pipeline of E5P in Ukraine includes 17 new potential projects with the total investment cost of 1.6 billion euro thus boosting economic recovery, promoting green policy and climate change mitigation measures.

Upon implementation of these projects, the total expected reduction of the CO2 in Ukraine shall make almost 800,000 tonnes per annum, which is equivalent of the total greenhouse gas emissions produced by the city of Lutsk (752,409 t p/a) with population of 212,000 persons. In general, E5P projects in Ukraine serve to deliver benefits to 9.5 million of Ukrainian citizens annually.

More specialised EU projects are aimed at decarbonising public transport (including railway) building the financial capacity of cities, developing socially and environmentally responsible small and medium-sized businesses, supporting educational programmes and innovations, and monitoring water and air quality. Moreover, the implementation of some projects and programmes (e.g., “Covenant of Mayors East”, “Covenant of Mayors – Demonstration Projects”, Apena II, APENA III, InnoFin) takes place simultaneously in several areas of the EGD.

Last year alone, the European Investment Bank (EIB) invested more than EUR 1 billion in improving, Ukrainian infrastructure including its “green” segment, and its total investment in Ukraine reached EUR7.5 billion. As part of the EBRD’s activities, 6 Ukrainian cities (Lviv, Kyiv, Mariupol, Khmelnytsky, Kryvyi Rih and Dnipro) have joined the large-scale Green Cities program, the Bank’s flagship initiative aimed at achieving sustainable energy and climate goals with a common budget more than €3 billion. NEFCO and KfW are investing in improvement of water supply and waste water treatment infrastructure in different Ukrainian cities.

The FINNTEC programme provides technical assistance and incentive grants to introduce innovative climate technologies with low market penetration and to foster transition to more sustainable business models, in the context of an EBRD direct investment in private sector companies.

It is important to note that in the context of all competitions for European technical assistance projects), starting in 2020, there is a mandatory requirement that the expected results of implementation are in line with the strategic objectives of the EGD and form synergies of the new projects with existing ones. Moreover, President of the European Commission Ursula von der Leyen stressed that in order to achieve this goal – climate neutrality of Europe by 2050 – the institutional, organisational and financial efforts of the European Union and all projects and programmes funded from outside the EU but with identical objectives should be combined and synchronized. She especially focused on the European Energy Award – the Swiss voluntary system of certification and quality management in municipalities that involved more than 1500 European communities (including 12 Ukrainian). It was stressed in particular, that the EU “new Mission for 100 сlimate-neutral cities by 2030 and the European Energy Award are natural interlocutors”.*

Taking into account the desire declared by the Government of Ukraine to join the EGD and the steps already taken in this direction, as well as the importance of public awareness of its goals, structure and tools for progress towards climate neutrality, the Delegation of the European Union to Ukraine has launched a broad information and communication a campaign aimed at bringing relevant, objective and complete information about the European Green Deal to Ukrainians.