EcoPolitic analyzed the commitments made by Ukraine as part of the implementation of the Ukraine Facility Plan and the European Commission's recommendations. To do this, we used a special web portal presented by the government in early June. It contains indicators, the content of the reforms, and the schedule for their implementation.
The Ukraine Facility Plan is one of the 4 documents of the Reform Matrix approved by the government on June 4 this year.
Screenshot from the website reformmatrix.mof.gov.ua.
What is Ukraine Facility
Ukraine Facility is a program of financial support for Ukraine from the European Union. It is designed for the period from 2024 to 2027 and provides for the allocation of €50 billion for state budget financing, investment stimulation, as well as technical support in the implementation of the program.
In order to receive these funds in the form of grants and loans from partners, Ukraine must implement the plan developed by the Cabinet of Ministers in close cooperation with the EU Plan for Ukraine Facility. It provides:
- Implementation of structural reforms in the public sector.
- Implementation of a number of economic reforms that will improve the business climate and promote the development of entrepreneurship.
- Measures for the growth of those sectors that will be able to ensure rapid economic growth.
Financial support will be provided quarterly, subject to the fulfillment of the indicators of the Plan for the Ukraine Facility. August 13 Ukraine received €4.2 billion for the implementation of the indicators of the second quarter of 2024, in particular thanks to the approval of the integrated National Energy and Climate Plan. Among the 9 indicators, the implementation of which is foreseen for the 3rd quarter of this year, there are also those that belong to the competence of the Ministry of Environmental Protection and Natural Resources of Ukraine:
- adoption of the law on prevention, reduction and control of industrial pollution;
- development of a conceptual note that defines the scope of deviations from the rules of OVD and SEO.
The first of these points has already been fulfilled. Law No. 11355 "On Integrated Prevention and Control of Industrial Pollution" was adopted by the Verkhovna Rada of Ukraine on July 16 and signed by the President on August 6.
What reforms are in the Plan for the Ukraine Facility
The plan for the Ukraine Facility provides for 69 reforms. For them, 151 quarterly performance indicators are specified. In addition to quarterly indicators, there are also 16 investment indicators. In order to fulfill them, it is necessary to continue and strengthen programs related to infrastructure development, demining, renewable energy, support of small and medium-sized enterprises, etc.
The reform matrix consists of 6 clusters. For each of them, mandatory recommendations and conditions are indicated, upon fulfillment of which our state will be able to receive macro-financial assistance.
The requirements to be fulfilled by Ukraine for the implementation of the "green transition" are contained in cluster 4 "Green agenda and sustainable connectivity".
Among his tasks:
- to improve the transport and energy infrastructure of Ukraine;
- promote the development of green energy and ensure environmental sustainability.
The main emphases in this cluster are:
- implementation of the national energy and climate plan;
- encouraging investments in renewable energy;
- implementation of market incentives.
Within each cluster there are directions. There are four of them in cluster 4:
- section 14 "Transport";
- section 15 "Energy";
- section 21 "Trans-European networks";
- chapter 27 "Environment and climate change".
On the Reform Matrix website, we can see the following graph with the number of reform measures and indicators implemented by the Ministry of Environment. These are data as of June 30, 2024, that is, the portal does not allow monitoring the implementation of reforms in the country in "real time", as promised by Prime Minister Denys Shmyhal.
Source: reformmatrix.mof.gov.ua.
It corresponds to 18 reform measures and 30 indicators.
Short-term reforms provided for by the Ukraine Facility Plan
For a first introduction to the list of environmental reforms that the EU requires Ukraine to carry out, we recommend readers a concise document "Indicators of the Plan for the Ukraine Facility 2024-2027". It specifies the following European integration reforms from the section "Green transition and environmental protection":
Reform 1. Prevention of industrial pollution, its reduction and control.
Reform 2. Climate policy.
Reform 3. Market mechanisms of carbon pricing.
Reform 4. Restoration and conservation of natural resources.
Reform 5. Development of circular economy.
Reform 6. Environmental Impact Assessment (EIA) and Strategic Environmental Assessment (SEA).
Please note that not only the Ministry of Environmental Protection and Natural Resources, but also the Ministry of Economy of Ukraine is responsible for reform #4, which is logical.
Maria Belkina, deputy director of the NGO "Ekodiya", notes that not all environmental reforms are included in the indicators. That is why lawmakers are in no hurry to implement reforms related to eco-control and the territories of the Emerald Network. At the same time, the draft law on the basic principles of the state climate policy is currently in the final discussions, the expert reminded.
"In general, in the field of environmental protection, many issues relate to the climate, so we expect that they will continue to be developed and effectively implemented. But at the same time, we should not forget about other important reforms, which, unfortunately, do not seem to be priorities right now – these are the protection of valuable nature conservation areas, water management (in particular, the approval of River Basin Management Plans), the reform of environmental control," said a member of the NGO "Ekodia".
A list of reform measures for environmental protection within the framework of the EU Program
More detailed information on the implementation of environmental reforms can be found in section 27 of the Plan within the EU Ukraine Facility Program. It envisages 20 reform measures, the implementation of which is assessed according to 38 indicators. 17 of these 20 measures fall under the competence of the Ministry of Environment.
Direction "Environment and climate change"
In the "Indicators" section, we find a table with the terms of implementation of reform measures.
Indicators that record the implementation of reform measures
You can see specific indicators and their status in the table below.
According to Maria Belkina, in general, the obligations stipulated in the Ukraine Facility Plan are fulfilled quite consistently and in advance.
"We can partially monitor this according to the indicators that were recorded directly in the Plan, as well as the list of reforms to which the receipt of tranches is tied," she says.
As examples of fulfilling Ukraine's obligations in the field of environmental reforms, the expert cited the adoption of the National Energy and Climate Plan and Law of Ukraine No. 11355 "On Integrated Prevention and Control of Industrial Pollution." She noted that the draft law on prevention, reduction and control of industrial pollution could not be adopted by the deputies for a very long time and failed due to lack of political will. And the fact that the draft law appeared in the Ukraine Facility Plan as an indicator contributed to its adoption.
Separately, Maria Belkina drew attention to the issues of the OVD and SEO procedures, which are in the list of indicators to be implemented in 2024. The expert reminded that for the 3rd quarter of this year, the development of a conceptual note defining the scope of deviations from the rules of the OVD and SEO is planned. She said that the relevant note was developed by the Ministry of Environment and was subject to public discussion. But at the same time, public organizations have critical remarks about this document. In particular, there are no clearly defined projects, as well as explanations or criteria why ATS may not be carried out, the duration of deviations from ATS rules is not clear.
"Therefore, the NGO "Ekoklub" together with other public organizations that supported it, prepared a position that the Concept Note in the presented version does not fully meet the established requirements, which are prescribed in the Ukraine Facility Plan."
Activists believe that the adoption of the memo in this version may unreasonably cancel the OVD and SEO for many reconstruction projects, plans and programs. They expressed hope that the Concept Note in its current version will not be accepted, because it carries great threats, and its content will be refined in accordance with the requirements of Reform 6 "Environmental Impact Assessment (EIA) and Strategic Environmental Assessment (SEA)".
According to Maria Belkina, at the moment it seems that most of the planned reforms related to environmental protection will be implemented in time.
"In particular, over the last quarters, it can be seen that the adoption of draft laws has accelerated: for example, a draft law on the prevention of industrial pollution or on the basic principles of climate policy (which usually can take longer, especially regarding the environment). At the same time, many tasks are also assigned directly to ministries and the government. And there are questions about what the final options will be for adoption," she says.
Despite the fact that public discussions are taking place, this is not a guarantee that public comments and remarks will be taken into account when preparing the final document, noted the member of the NGO "Ekodiya".
