The Committee on Environmental Policy and Nature Management has recommended that the Verkhovna Rada of Ukraine adopt as a basis the government's draft law No. 12180 “On Mining Waste Management”.
This was announced by the government's representative in the parliament, Taras Melnychuk.
This draft law establishes legal, economic and organizational principles for the effective management of extractive industry waste to reduce the negative impact on the environment and ensure the health and safety of citizens.
Draft Law No. 12180: what it provides
- Contains definitions of terms in the field of extractive industry waste management.
- Establishes the responsibilities of entities in the field of extractive industry waste management.
- Regulates the activities of a business entity in the field of extractive industry during the management of extractive industry waste, operation of facilities for the management of extractive industry waste, closure and implementation of post-operational measures for such facilities.
- It establishes a number of norms on planning activities for the management of extractive industry waste and prevention of accidents, regulation of the issue of man-made deposits and abandoned facilities.
- Defines the requirements for the provision of administrative services, including obtaining permits in the field of waste management, as well as for state supervision (control).
- Establishes requirements for financial security for an operator that intends to operate or operates a facility for extractive industry waste.
- Provides for liability for violation of legislation in the field of extractive industry waste management.
What are the experts' comments on the document?
Experts who analyzed the version of draft law No. 12188 submitted to the committee stated that the lawmakers did not take into account the amendments of MPs, specialized associations and specialists. They promised to take them into account when preparing the document for the second reading.
Among the drawbacks, experts say that the fiscal burden on the same object of taxation will increase. They say that if the draft law is adopted in its current wording, in early 2025, after 6 years (i.e., by 2031), business entities will pay the waste disposal tax for all volumes of waste from the extractive industry and at the same time pay financial security for facilities for such waste.
Experts noted that the text of the draft law published for public discussion contained a provision stating that the relevant provisions would come into force after amendments to the Tax Code of Ukraine were made to abolish the tax on waste disposal. This approach was supported by the business community “as a positive signal for a balanced and thoughtful policy of supporting national producers.”
Another drawback, experts said, is that the proposed version of the draft law does not fully take into account the specifics of waste management in oil and gas production, as it does not disclose or ambiguously interprets the concepts of “sludge pit” and “neutralization,” which automatically leads to the use of a single pitless drilling method by oil and gas producers. Therefore, according to experts, the adoption of the draft law in the specified wording without taking into account the specifics of waste management in oil and gas production may increase the economic cost of their production.
We will remind, the Ministry of Environmental Protection and Natural Resources of Ukraine in February made public draft Law No. 12180 "On waste management of the extractive industry", and in April conducted meeting of the working group to discuss the financial guarantees provided for in this document.
