The Ukrainian oil industry has fallen into a legislative trap that is blocking the development of the energy sector. In order to enhance environmental safety, producers must undergo an environmental impact assessment and obtain a permit to process waste for work not related to hazardous substances. What's more, drilling a well always ends with the reclamation of the territory and its return to the owner.
The PAEW Association of Environmental Professionals has appealed to the Ukrainian government to resolve this conflict.
"Drilling waste and sludge pits are effectively tied to a permitting procedure that is longer than the process itself and, in the real configuration of work, is often simply impossible to complete: the permit requires an EIA and a data package that neither the subsoil user nor the contractor has at the start. As a result, the system does not create manageability—it creates a pause, shadow decisions, and regulatory risk where the country needs speed, predictability, and energy stability," says Lyudmila Tsyganok, president of the association.
A legal loophole that blocks an entire industry
The principles for reducing the volume of waste and preventing its generation are regulated by the Law of Ukraine No. 2320-IX "On Waste Management". It also outlines the rules for waste management in the extractive industry in the absence of a dedicated sectoral law. This concerns wastes resulting from exploration, extraction, processing, and storage of minerals.
The Draft Law on the Management of Extractive Industry Waste No. 12180 was never adopted – the parliamentary session failed to pass it in June 2025. Therefore, for miners, Law No. 2320-IX remains decisive.
In 2023, the Cabinet of Ministers, in implementation of Article 42 of this law, adopted Resolution No. 1328. It set forth the Procedure for Issuing, Refusing, and Terminating Permits for Waste Processing Operations. It does not apply to facilities operating on the basis of an integrated environmental permit (IEP).
However, waste from oil and gas well drilling is too minor to fall under the Law "On Integrated Prevention and Control of Industrial Pollution." Therefore, such waste remains within the scope of Resolution No. 1328, which was amended by Government Resolution No. 1626 on December 10.
As a result, for the management of drilling waste, enterprises in the oil and gas sector are required to obtain permits for waste processing operations.
A senseless waste of time
Drilling a well is a relatively short process. Depending on the technical details of the project, the work can take up to a year. The company returns the land to the owner in less than a year if drilling is completed during the warm season, and in less than two years if the work is completed in winter.
Before that, the extractor recultivates the area occupied by slurry pits. This is usually an area of up to 3 hectares. The oil extraction site itself is reduced to 0.5 hectares.
The recultivated land continues to be used by the previous owner without changing its intended purpose, most often for agriculture.
If the business needs to obtain an environmental permit, the work is delayed. The procedure itself actually takes up to 200 days, and sometimes even longer than the drilling process itself. Obtaining a permit for waste operations delays the start of work by another 30 days.
Procedures do not consider technology
The applicant, in order to obtain a permit, is required to provide information that they often do not possess. For example, they must submit details about the equipment to be used for drilling, down to the technical passports.
However, there is a nuance – drilling is usually performed by a contractor. At the planning stage, the customer does not know exactly which equipment the contractor will use.
In turn, the contractor is not entitled to obtain the permit. They are not the land user, do not provide land reclamation in the area beneath the slurry pits, and overall are not defined as a business entity under the provisions of the Law “On Environmental Impact Assessment.”
“Despite the increase in the number of wells drilled during 2025 – early 2026, both by Naftogaz Group entities and private companies, there are no permits for drilling waste management operations in slurry pits listed in the Waste Management Operations Permit Register. This further demonstrates the inadequacy of regulation on this issue, especially under wartime conditions and the total destruction of gas production,” – PAEW writes.
As a solution, the organisation proposes supplementing the Procedure established in Cabinet of Ministers Resolution No. 1328 by adding the words “and extractive industry waste” after “except for installations operated on the basis of an integrated environmental permit.”
EcoPolitic previously reported that the European Business Association raised a similar issue with the authorities.
