On May 27, the Ministry of Environmental Protection and Natural Resources of Ukraine held an event “Climate Policy of Ukraine: NDC in the context of modern challenges”. Representatives of all stakeholders were invited to join the discussion of scenarios for a new Nationally Determined Contribution (NDC) to the Paris Agreement, which are being prepared by the Ministry.
EcoPolitic listened carefully to representatives of ministries, specialized experts, public figures, industrialists, and international partners. Here are the main conclusions from this six-hour event.
There are forecasts, but no proposals
During the first panel discussion, representatives of the Institute for Economics and Forecasting of the National Academy of Sciences of Ukraine presented scenarios for reducing greenhouse gas emissions to Ukraine's NDC2 by 2035. They have a lot of uncertainties related to the war and occupation of certain territories, and, accordingly, a large number of assumptions, including the restoration of Ukraine's territorial integrity by 2030 and the gradual reintegration of Zaporizhzhia NPP into our country's energy system starting in 2028.
The researchers also calculated the capital investments required to decarbonize each of the emission-producing sectors, taking into account existing measures and with the involvement of additional measures. Under the first scenario, Ukraine needs €31.3 billion, and under the second – €59 billion.
Neither scientists nor ministry representatives presented any concrete steps on how these investments will be attracted. They simply promised to continue analyzing the NDC2 scenarios and to hold sectoral discussions on the modeling results.
Position of industrialists
During the second panel discussion, the floor was given to business representatives.
Pavlo Zhyla, Chairman of the Committee on Ecology and Green Economy Development of the Federation of Employers of Ukraine (FEU), reminded that in 2021, the NDC was adopted without any public discussion, which provided for a 65% reduction in CO2 emissions. The industrialists were simply confronted with the fact. He expressed hope that this time it will be different: the adopted NDC2 will be the result of discussions and deliberations of all stakeholders.
“[I hope] that a comprehensive assessment will be conducted and that this decision will in fact be not solely political, but balanced and correct,” said the committee chairman.
Pavlo Zhyla also voiced the following position of the business: it is premature to make any decisions now during the war and in a period of complete uncertainty. According to the FEU representative, it is necessary to “look for an opportunity to wait until the war is over, to understand at what stage and in what format the country will be, and then to declare some ambitions, goals and talk about something similar.”
The expert thanked the authors of the forecasts, but noted that the worst thing that is missing is “certainty and understanding of what will happen tomorrow.”
“It is possible to declare ambitions in our situation, but it is difficult. The position of business is to postpone this period,” said Pavlo Zhyla.
He emphasized that “business is conscious, business understands, but the decision is probably premature.”
Olga Semkiv, Director of the Sustainable Development Department at ArcelorMittal Kryvyi Rih, emphasized that, unfortunately, in Ukraine, a change in the technological path – significant investments, such as the construction of new electric arc furnaces instead of blast furnace production – is not possible in the short term (2 to 5 years). That is why it is not possible to reduce embedded emissions at the rate required to meet EU requirements under the CBAM.
“We have all the plans [for decarbonization – ed.]. It is clear how we have to pay for emissions, what measures we have to implement – it is all obvious. But there is one caveat – financing and, in principle, the feasibility of these investments, because the main technologies are abroad, and there are certain reservations for their implementation in Ukraine – it is not easy to bring contractors to Ukraine. And the second is the security issue,” said the director.
She reminded that construction on the territory close to the frontline raises certain questions.
Olga Semkiv is confident that despite the many problems and nuances, business and the government need to find common solutions. In her opinion, it is worth considering a more rational use of eco-tax revenues so that not only small issuers but also those companies that actually pay it benefit from it.
“Despite the fact that our emissions have dropped recently, we still pay a significant amount of this tax. Yes, let's be honest, it will not help much in the implementation of such large-scale projects as the construction of an electric arc furnace. But, nevertheless, it will allow us to do engineering, develop project documentation, and prepare the site,” the executive said.
She emphasized that any tools and any financial assistance from the state will be important for every company now. And the company hopes that the government will meet with it and continue to look for solutions together with business.
Victoria Karpets, Manager of the EBA's Industrial Ecology and Sustainable Development Committee, assured that businesses are making every effort to achieve climate goals even despite the current very difficult times in Ukraine. She is convinced that our country has set an ambitious target for the NDCs despite the fact that it is difficult to achieve in wartime.
Karpets emphasized that modernization for decarbonization is a process that requires significant investment, and without direct funding from the EU and other international partners, it is very difficult for companies now, as their main goal is to survive. Therefore, the EBA believes that when defining NDC2, Ukraine needs to set realistic goals that can be achieved in the conditions of war and the post-war period.
What was the result of the discussions?
At the very beginning of the event, Olga Yukhymchuk, Deputy Minister of Environmental Protection and Natural Resources of Ukraine for European Integration, said that “the Nationally Determined Contribution is not so much about numbers as it is about actions and measures that need to be implemented by the entire government. This is exactly what we did not see. The government representatives did not make any concrete proposals on how the state is ready to help companies in the process of “green transition”.
The maximum the government has done is to develop a platform that will contain a list of possible foreign sources of decarbonization financing and options for reducing greenhouse gas emissions that remain financially feasible under current conditions.
Violena Silvestro von Kameke, a representative of the European Investment Bank (EIB), spoke mainly about the assistance her institution provides to rebuild schools, hospitals, and other social infrastructure in Ukraine, and advised that industrial enterprises should contact another EIB specialist through her. It is unclear why he was not invited to the event.
So, once again, we have seen that the Ministry of Environment has demonstrated its ability to organize beautiful public events, set goals and write strategies. But we have not seen any concrete actions and measures to promote the decarbonization of the domestic industry, which is suffering in the war. Therefore, a reasonable question arises: is there any point in holding such demonstrative meetings?
