MONITORING OF UKRAINE’S NATIONAL ENERGY AND CLIMATE PLAN (NECP) Q1 2025

In the first quarter of 2025 (covers the period from January 1 to March 20, 2025), the implementation of NECP showed moderate progress, although the integral score decreased slightly. This was primarily due to the assessment of three indicators that were previously not taken into account due to a later deadline or sequence of implementation, and of another 8 indicators, for which such an assessment became possible (data was previously unavailable).

Key decisions and events:

• Law No. 4187-IX was adopted, aiming to restore mandatory monitoring, reporting and verification (MRV) of greenhouse gas emissions to create the emissions trading system (ETS);
• The Cabinet of Ministers approved a three-stage plan of 15 tasks for the launch of the ETS;
• The Ministry for Development of Communities and Territories published a draft State TargetedProgram for Just Transition of Coal Regions of Ukraine by 2030 for public consultations;
• The Energy Efficiency Fund approved changes to grant support under the GreenDIM program, yet acceptance of new applications was suspended due to the lack of funding;
• The Ministry for Development of Communities and Territories introduced requirements for nearly- zero energy buildings (NZEB), which are not yet mandatory, for new and renovated buildings;
• Law No. 4213-IX was adopted, introducing a capacity reservation mechanism and the possibility of purchasing electricity generated at third-party facilities connected to prosumer networks;
• Ukraine made the first biomethane pipeline exports to the EU;
• The first contract was concluded under the Contracts-for-Difference (CfD) mechanism between aRES producer and an industrial enterprise, which indicates the prospects of corporate PPAs;
• The NEURC increased the electricity transmission tariff by 29.8%, which allowed to improve settlements with producers of electricity from renewable sources;
• Ukraine did not reach the intermediary milestone of gas storage filling target as of February 1, and the subsequent decline to a historic low (1 bcm) created risks to energy security;
• The formation of minimum stocks of crude oil and/or petroleum products started with the registration and entry of data into the electronic reporting system of the Market Operator;
• Despite the expansion of the Fund for Decarbonization and Energy Efficient Transformation tools, only 5 projects received support, compared to 16 in the previous quarter.

The full-scale Russian invasion has significantly affected the NECP implementation due to limited access to financing, difficulties in data collection and logistical disruptions, although some policies are being adapted and partially implemented, especially in regions less affected by the war. The issues of energy security, ensuring the adequacy of generating capacity and increasing the energy system resilience through the development of distributed generation have come to the forefront. For an overview of the NECP policies and measures feasibility in the context of challenges caused by the war, see the “Special Topic” section.

Monitoring is performed on the basis of public sources of information, but may also include requests for information, consultations or other methods (as noted separately). The assessment of the NECP implementation is carried out on the basis of qualitative and quantitative indicators for all 144 policies and measures. All indicators are assessed in two aspects – the status of implementation and the status of progress (for policies and measures in the process of implementation). A detailed description of the scale, as well as the assessments by indicators with relevant comments, can be viewed in the assessment table for Q1 2025. In addition to assessing the indicators, the experts also take into account decisions and events that directly relate to the NECP and/or may have a significant impact on its implementation.